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Insolvency and Bankruptcy - Case Laws
Showing 21 to 40 of 68 Records
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2020 (4) TMI 642 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed in making repayment of the Cash Credit, Term Loan, BP, Devolved LC facility availed from the Bank - existence of debt and dispute or not - HELD THAT:- The CD has defaulted in making repayment of credit facilities to the Petitioner Bank and the date of default is 28-8-2014. The Statement of accounts submitted by the applicant confirms the default committed by the Corporate Debtor - The Petitioner Bank has filed the petition within the period of limitation, as the date of payment of INR. 3,75,00,000.00 as on 25-1-2018 whereas this petition has been filed by the Financial Creditor on 1-7-2019 - The present I.B. Petition is filed by the duly authorised official of the Financial Creditor in a prescribed format under section 7 of the I.B. Code annexing copies of loan documents confirming the existence of debt due and defaulted and proposed a name of Resolution Professional to act as an Interim Resolution Professional (IRP).
This Adjudicating Authority is satisfied that:
(a) The Corporate Debtor availed the credit facilities from the Financial Creditor;
(b) Existence of debt is above Rs. One Lakh;
(c) Debt is due;
(d) Default has occurred on 28-8-2014;
(e) Petition has been filed within the limitation period as the Corporate Debtor has paid INR. 4,73,50,000.00 on various dates between 4-11-2016 to 25-1-2018 wherein this petition has been filed on 1-7-2019.
(f) Copy of the Application filed before the Tribunal has been sent to the Corporate Debtor and the application filed by the Financial Creditor under section 7 of IBC is found to be complete for the purpose of initiation of Corporate Insolvency Resolution Process in respect of the Corporate Debtor.
Petition is admitted - moratorium declared.
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2020 (4) TMI 641 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- In the present case, there is no such dispute as pre-existing, the dispute which was being claimed to be pre-existing by the corporate debtor did not survive - also, the applicant has attached the copy of Bank statements in compliance of the requirement of Section 9(3)(c) of the I&BC 2016.
The present application is complete and the Operational Creditor is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfilment of requirements under section 9(5) of the Code. Hence, the present application is admitted - Application admitted - moratorium declared.
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2020 (4) TMI 605 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Appellant has assailed the impugned order mainly on the ground that the impugned order is an ex parte order and was communicated to the Appellant on 09th January 2020 by the Insolvency Resolution Professional - HELD THAT:- The Corporate Debtor failed to make the payment despite service of the demand notice issued under Form 3 of the Insolvency and Bankruptcy (Application to Adjudicating Authority Rules, 2016). The Corporate Debtor neither made the payment nor sent any notice of dispute and the alleged outstanding amount of more than ₹1,00,000/-. There is sufficient evidence on record to prove the amount due and payable against the Corporate Debtor in the circumstances - the service of the demand notice on the corporate debtor was proper.
Despite service of notice under Section 8(1) of the I & B Code, 2016 the Corporate Debtor neither made the payment not raised any dispute of the outstanding amount. The Appellant has admitted that the Court notice was received by its employee Ashish Gupta on 17th August 2019, but he left the organisation on 03rd October 2019. Since the said employee was in active employment of the Appellant/Corporate Debtor when he received the notice, thus it is clear that the order to proceed the case ex-parte is fully justified - The Appellant has also admitted that he has defaulted in payment of the outstanding amount due to cash crunch and was willing to pay the same. The Appellant has also not disputed the completion certificate dated 05th January 2018, which clearly shows that the work was completed to its satisfaction.
Appeal dismissed - decided against appellant.
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2020 (4) TMI 604 - NATIONAL COMPANY LAW TRIBUNAL, HYDERABAD BENCH
Admissibility of petition - initiation of CIRP - time limitation - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - whether the petition filed by the financial creditor is within the period of limitation under Article 137 of the Limitation Act? - HELD THAT:- There is no impediment for the petitioner/financial creditor to initiate proceedings under the Insolvency and Bankruptcy Code, 2016 simultaneously, along with initiation of proceedings before the Debt Recovery Tribunal. The question of exclusion of time on the ground that proceedings are pending before the Debt Recovery Tribunal, for computation of limitation under Article 137 of the Limitation Act does not arise, for the reason that the Debt Recovery Tribunal proceedings are still pending and the petitioner/financial creditor moved the present application under section 7 of the Insolvency and Bankruptcy Code, 2016 simultaneously.
There is no question of any exclusion of time under section 14 of the Limitation Act for initiation of proceedings under section 7 of the Insolvency and Bankruptcy Code, 2016 by the petitioner/financial creditor against the corporate debtor - In the present case the account was declared as NPA on 30-4-2013, whereas the present petition under section 7 of the I&B Code was filed on 12-9-2018, which was filed beyond three years. As such the present application is liable to be rejected.
Petition dismissed.
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2020 (4) TMI 553 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- The claim as made by the Operational Creditor is within the prescribed period of limitation of 3 years. The claim amount as made in the Application is also in excess of ₹ 1,00,000/- being the statutory minimum amount fixed under section 4 of the I&B Code, 2016 for approaching this Tribunal by the creditors, in the instant case by Operational Creditor and further in relation to the Corporate Debtor the registered office of which is situated within the State of Tamilnadu, amenable to its territorial jurisdiction, this Authority deem it fit to admit the instant Application and to initiate the Corporate Insolvency Resolution Process (CIRP) as against the Corporate Debtor.
The Application as filed by the Operational Creditor is required to be admitted under section 9(5) of the IBC, 2016 - application admitted - moratorium declared.
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2020 (4) TMI 516 - SUPREME COURT
Initiation of CIRP - Section 65 of the IBC - NCLAT dismissed the appeal on the ground that an objection for admitting application should be raised before NCLT first - It was submitted by the learned counsel appearing for Respondent No.2 that allegation of collusion is unfounded and has no merit - HELD THAT:- Considering the provision of Section 65 of the IBC, it is necessary for the Adjudicating Authority in case such an allegation is raised to go into the same. In case, such an objection is raised or application is filed before the Adjudicating Authority, obviously, it has to be dealt with in accordance with law. The plea of collusion could not have been raised for the first time in the appeal before the NCLAT or before this Court in this appeal - we relegate the appellant to the remedy before the Adjudicating Authority.
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2020 (4) TMI 515 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment of its debt - existence of debt and dispute or not - time limitation - HELD THAT:- In the present case, there is no acknowledge issued by Appellant/Corporate Debtor prior to expiry of 3 years or from the date of default. Therefore, the Application filed by the 1st Respondent before the Adjudicating Authority on 30.08.2018 is beyond the period of limitation.
The Corporate Debtor is released from the rigor of Corporate Insolvency Resolution Process and action taken by IRP/RP and Committee of Creditor, if any, in view of the impugned order set aside - matter is remitted back to Adjudicating Authority to decide the fee and costs of “Corporate Insolvency Resolution process” payable to IRP/RP which shall be borne by the Bank of India - Appeal allowed.
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2020 (4) TMI 514 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Recovery of monies due to the corporate debtor under liquidation - amount due and payable - interpretation of section 60(6) of IBC, 2016 - HELD THAT:- After liquidation of the Corporate Debtor, the liquidator steps into the shoes of the Corporate Debtor and as per Regulation 39 of the IBBI (Liquidation Process) Regulation 2016, the liquidator is empowered to proceed to recover and realize the dues to the Corporate Debtor for maximization of value to the stakeholders, can initiate action for recovery of dues - Further, the maxim 'reddendo singula singulis', or for that case any interpretation should be given to a sentence, only if the said sentence is vague and ambiguous and when the section is lucid and unambiguous then there is no need for any interpretation. Further, even for the sake of argument, if the interpretation of 'reddendo singula singulis' is applied to section 60(6) of the IBC, 2016, it should be noted that the said interpretation should be confined only with the object and words contained in section 60(6) of IBC, 2016 and should not be referred or read in consonance with section 14 of IBC, 2016.
It can safely be concluded that an amount of ₹ 24,36,00,048/- is due and payable by Respondent to the Corporate Debtor - Application allowed.
Respondent is directed to make the payment of the said amount o within six weeks from the date of the pronouncement of this order, failing which 12% interest per annum shall be charged from the Respondent on delayed payments till the realization of the whole of amount.
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2020 (4) TMI 513 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Approval of Resolution Plan - the contention of the Appellant is that the Resolution Plan approved is not in compliance with the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC); that the provision of paying NIL amount to the Operational Creditors is not as per provisions of IBC and also that the Operational Creditors deserved a similar treatment as Financial Creditors; that it is wrong on the part of Committee of Creditors (COC) to approve a Resolution Plan which provided for payment only to members of the Committee and no other stakeholders.
HELD THAT:- We have already reproduced portion from Part B - Financial Proposal with regard to what the approved Resolution Plan states regarding dues to the Operational Creditors. The proposal is based on the assessment that there is no liquidation value due to Operational Creditors. Although it is not stated but there is reason to doubt that the Resolution Applicants were aware of the liquidation value. There is no dispute that so many of the Operational Creditors have been left high and dry giving them nil amount which Hon'ble Supreme Court has observed that giving NIL to Operational Creditors "would certainly not balance the interest of all stakeholders or maximise the value of assets of the Corporate Debtor if it becomes impossible to continue running its business as a going concern."
The Impugned Order accepting the Resolution Plan cannot be upheld. The Resolution Plan does not appear to have taken care of interest of all stakeholders including Operational Creditors and the decision of the COC also does not reflect that it has taken into account the fact that the Corporate Debtor needs to be kept as a going concern and that there is need to maximise the value of the assets and that the interest of all the stakeholders including Operational Creditor has to be taken care of - matter remitted back to the Adjudicating Authority with a direction to send back the Resolution Plan to the Committee of Creditors to resubmit the Plan - appeal disposed off.
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2020 (4) TMI 512 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- Considering the nature of business, the petitioner cannot be considered as operational creditor. As defined under sub-section (20) of section 5 of the I & B Code an "operational creditor" means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred." In the instant case there is no operational debt owed by the respondent, rather the applicant procures raw diamond and supplies it to the respondent for finishing/polishing and after polishing the same is sent back to the applicant - On a mere perusal of the definition of operational creditor and operational debt it is found that, in the instant case, there is no such relation of operational creditor and corporate debtor between the two parties as the applicant never provided any goods and services to the respondent.
The application so filed is not maintainable and hence stands dismissed.
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2020 (4) TMI 511 - NATIONAL COMPANY LAW TRIBUNAL, HYDERABAD
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- It is always open to the 'Corporate Debtor' to point out existence of dispute, if any or to show that claimed amount has been paid already and there is no debt due and payable. However, such existence of dispute should be that of a period prior to the issuance of the demand notice under section 8(1) of the Code.
In Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. [2017 (9) TMI 1270 - SUPREME COURT], the Hon'ble Supreme Court held that the existence of the dispute and/or the suit or arbitration proceeding must be pre-existing - i.e. it must exist before the receipt of the demand notice or invoice, as the case maybe.
It is clear that the existence of dispute must be pre-existing i.e. it must exist prior to issuance of the demand notice or invoice. If it comes to the notice of the Adjudicating Authority that the 'operational debt' is exceeding ₹ 1 lakh and the application shows that the aforesaid debt is due and payable and has not been paid, in such case, in absence of existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid 'operational debt', the application under section 9 cannot be rejected and is required to be admitted.
Merely because the 'Corporate Debtor' has disputed the claim by showing that there is certain counter claim, it cannot be held that there is pre-existence of dispute - when the facts of the instant case are considered, it is observed that having received the statutory notice u/s 8 from the Operational Creditor, the Corporate Debtor had sent a reply within 10 days of receipt of the notice.
This Adjudicating Authority is satisfied that the Operational Creditor has proved its case by placing evidence that default has occurred for which the Corporate Debtor was liable to pay - Petition admitted - moratorium declared.
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2020 (4) TMI 510 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Maintainability of petition - initiation of CIRP - Financial debt - existence of debt and dispute or not - HELD THAT:- The constitution of Financial Creditor as an NBFC is evidenced by the certificate of registration issued by the RBI. The grant of financial assistance is evidenced by the banking transactions. The accepted liability to pay interest thereon finds corroboration by tender of interest and deduction of TDS duly deposited with the Income-tax Authority and substantiated by Form 26AS of the Financial Creditor. The resistance raised by the Corporate Debtor that the same was not a loan, finds no merit with this Bench.
This Bench has taken note of the fact that a record of disbursal of the amount by the petitioner, a Non-Banking Financial Company, to the Corporate Debtor is vide a Banking transactions. The Corporate Debtor therefore cannot dispute the same. It has also not been repudiated that the debt has not been repaid - the insistence of the Corporate Debtor that the transaction is not a financial debt is inexplicable. The Act does require that a financial obligation shall only arise upon the terms being reduced into writing. Ld. PCS has cogently explained that the transaction does not get vitiated for want of an agreement in terms of section 186(11) of the Companies Act, 2013.
The resistance of the prayer by the Corporate Debtor has no legs to stand upon. The defence is frivolous raised in a desperate attempt to resist initiation of the CIR process. This Bench is therefore of the opinion that Operational Creditor is entitled to seek initiation of the CIR process of the Corporate Debtor for its inability to liquidate its dues. Accordingly, this petition is Admitted.
Petition admitted - moratorium declared - Report be filed before this Bench on 11th March, 2020.
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2020 (4) TMI 509 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- There are several disputed question of facts, which cannot be looked into in a proceedings initiated under the provisions of Code, which is admittedly summary in nature, wherein prima facie debt and default in question should not be in dispute, in an Application/Petition filed under provisions of section 9 of Code. The Adjudicating Authority, even cannot go simply go by debt and default, it should also see the object of Code, before initiating CIRP against the Corporate Debtor, which would have serious civil consequences, and would result in devastating effect on various stakeholders of Corporate Debtor.
It is settled position of law that the provisions of Code cannot be invoked for recovery of outstanding alleged amount(s) - The Hon'ble Supreme Court in the case of Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. [2017 (9) TMI 1270 - SUPREME COURT ] has inter alia, held that IBC, 2016 is not intended to be substitute to a recovery forum.
The Petitioner failed to point out the claim in question is un-disputed and it filed with an intention to recover the alleged dues rather to justify to initiate CIRP in respect of Corporate Debtor - Petition dismissed.
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2020 (4) TMI 508 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- This Adjudicating Authority is satisfied that,
(a) Existence of debt is above Rs. One Lac;
(b) Debt is due;
(c) Default has occurred on 08/06/2017;
(d) Petition has been filed within the limitation period as the date of default is 08/06/2017 and the petition has been filed on 20/07/2018.
(e) Inspite of giving Demand Notice in Form No. 3 as required by Section 8 of the IB Code read with Rule 5 of the IB Rules and Publication of notice in the newspaper Respondent did not choose to give any reply.
(f) Copy of the Application filed before the Adjudicating Authority has been sent to the Corporate Debtor, Paper publication was done and the application filed by the Petitioner under section 9 of IBC is found to be complete for the purpose of initiation of Corporate Insolvency Resolution Process against the Corporate Debtor.
Petition admitted.
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2020 (4) TMI 507 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- There is no pre-existing dispute regarding the unpaid operational debt, being the principal amount of ₹ 6,10,42,439.00. The invoices for the period of 2-11-2015 to 25-6-2018 were raised upon the Corporate Debtor on a running account basis, but the outstanding dues were not paid. Thus, the existence of debt and default is established.
The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition - Petition admitted - moratorium declared.
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2020 (4) TMI 506 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of dispute or not - HELD THAT:- This is an Application filed under section 7 of the Code by Punjab National Bank for initiating the CIRP process as against the Corporate Debtor alleging default in repayment of loan availed by the Corporate Debtor. The availing of loan and executing the documents as referred to in the Application is not at all under challenge - the ld. Counsel, appearing for the corporate Debtor, has attempted to establish that the demand for repayment of ₹ 15 crore along with interest is actually not due and payable by the Corporate Debtor. What is demanded by the Financial Creditor, here in the case in hand, is the sum of ₹ 22,65,61,156.57, which includes interest @ 16% per annum and the demand was on the basis of terms and conditions in the sanction letter dated 30-07-2012.
Admittedly, the Corporate Debtor has committed default. According to the Financial Creditor, the account maintained in the name of the Corporate Debtor has been classified as non-performing asset as on 28-01-2016 and produced record of default (copy of CIBIL Report- Annexure -1 at Page 222) to prove the default - Application admitted - moratorium declared.
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2020 (4) TMI 505 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- The debt and default in question having no dispute and having no objections filed by the Respondent. The Adjudicating Authority has granted sufficient time to explore the possibility of settlement of the issue in question. Therefore, there is no option left for the Adjudicating Authority except to admit the case by initiating CIRP in respect of the Corporate Debtor, appointing IRP and imposing moratorium, etc.
Application admitted - moratorium declared.
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2020 (4) TMI 504 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - operational debt exceeding ₹ 1 Lakh or not - existence of debt and dispute or not - HELD THAT:- The existence of a dispute between the parties or a record of pendency of a suit or arbitration should be filed before the receipt of the Demand notice of the unpaid Operational Debt. Admittedly, in this case, the Demand notice was issued to the Corporate Debtor on 1-5-2019 to which the Corporate Debtor has admitted his liability and has also stated that they have not filed any appeal against the award of the Arbitrator.
It is an admitted fact that only after filing of the petition, the Corporate Debtor has filed the O.P. No. 549 of 2019 challenging the arbitral award which cannot be considered as a "pre-existing dispute" as contended by the Ld. Counsel for the Corporate Debtor in view of the above stated facts. Hence, there are no merit in the submissions made by the Ld. Counsel for the Corporate Debtor and therefore the application filed by the Corporate Debtor stands dismissed.
From the documents produced on record, it is evident that the claim falls within the period of limitation of 3 years and is not barred by limitation. The claim amount as made in the petition is also in excess of ₹ 1,00,000/- being the statutory minimum amount fixed under section 4 of the IBC, 2016 for approaching this Tribunal by the creditors, in the instant case by an Operational Creditor - the Application as has been filed by the Operational Creditor is admitted and consequently Corporate Insolvency Resolution Process is initiated - petition admitted - moratorium declared.
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2020 (4) TMI 503 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Approval of Resolution Plan - CIRP - whether by virtue of approval of the resolution plan for Adhunik Alloys and Power Limited -(the Principal Debtor of State Bank of India) and State Bank of India has consented for approval of that plan, right to file this proceeding against Corporate Debtor who is the guarantor of Adhunik Alloys and Power Limited for any default? - HELD THAT:- If we peruse the relevant portion of the resolution plan for Adhunik Alloys and Power Limited, approved by this Adjudicating Authority, we certainly come to know that the guarantor is not exonerated or discharged from its liability of paying balance outstanding though SBI - one of the members of the CoC in that proceeding gave consent for the approval of the plan.
Under the I & B Code, 2016, the debtor is discharged on approval and implementation of the resolution plan. The resolution plan is approved when the Adjudicating Authority is satisfied that the resolution plan is approved by CoC and its contents are in accordance with the law. Therefore, the principal debtor discharged under I & B Code, 2016 not on the instance of a creditor but due to operation of law that is approval of the resolution plan. Hence, the Guarantor is not discharged of its liability towards the creditor on discharge of principal debtors liability under the I & B Code, 2016.
The application filed by the Financial Creditor under section 7 of the Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, M/s Sungrowth Share & Stocks Ltd., is hereby admitted - Application admitted - moratorium declared.
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2020 (4) TMI 472 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Extension of time in the ‘Corporate Insolvency Resolution Process’ - third proviso of Section 12 inserted vide Gazette Notification dated 6th August, 2019 - HELD THAT:- Section 12 has been amended which described time limit for completion of ‘Corporate Insolvency Resolution Process’ which has been amended by addition of two more proviso to sub-section (3) of Section 12 which can be stated to be second and third proviso. This has come into force w.e.f. 16th August, 2019 vide SO No. 2953E - In terms of third proviso of sub-section (3) of Section 12, as we find that the ‘Corporate Insolvency Resolution Process’ of the ‘Corporate Debtor’ is pending and has not been completed within the period referred to in the second proviso, we hold that the ‘Corporate Insolvency Resolution Process’ is to be completed within another period of 90 days from the date of commencement of Insolvency & Bankruptcy Code (Amendment Act, 2019) i.e. w.e.f. 16th August, 2019.
In view of the fact that the period has been extended for another 90 days in the present case in view of third proviso to sub-section (3) of Section 12, the impugned order is set aside and the ‘Resolution Applicant is allowed to move before the ‘Committee of Creditors’ and ‘Resolution Professional and direct completing of the process within 90 days from the date of commencement of Insolvency & Bankruptcy Code (Amendment Act, 2019) i.e. w.e.f. 16th August, 2019 - Appeal allowed.
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