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Insolvency and Bankruptcy - Case Laws
Showing 181 to 188 of 188 Records
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2020 (9) TMI 51 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Replacement of IRP with a new IRP - removal of IRP on the ground that the Appellant had been in gainful employment of the ‘Financial Creditor’/’Union Bank of India’ for 34 years and had been dealing with the accounts of the ‘Corporate Debtor’ which facts were unknown to the ‘Corporate Debtor’ previously - impugned order is assailed on the ground that the removal of the ‘Interim Resolution Professional’ who had been appointed and confirmed can be carried out only with concurrence of ‘Committee of Creditors’ - HELD THAT:- Admittedly the Appellant had been in gainful employment of the ‘Financial Creditor’ for 34 years and had been dealing with the accounts of the ‘Corporate Debtor’ – a fact which the ‘Corporate Debtor’ claims not to be in know-of previously. The Appellant may not be currently in employment of the ‘Financial Creditor’ or drawing salary under it but the fact remains that on account of services rendered in past an element of loyalty is there which cannot be ignored. In view of this fact appreciation on the part of the ‘Corporate Debtor’ that the Appellant would not be fair in his working as ‘Resolution Professional’ cannot be dismissed off-hand more so when an instance of deviation was pointed out which the Appellant, when confronted, admitted as a mistake. This factual position emanates from the impugned order. This is independent of any prejudice caused actually and factually as the bias has to be viewed from the perspective of the ‘Corporate Debtor’ on the mere basis of apprehension on account of past services rendered by the Appellant with the ‘Financial Creditor’. In such circumstances, no exception can be taken to the powers of the Adjudicating Authority acting independent of the opinion of the ‘Committee of Creditors’ in this regard.
Appeal dismissed.
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2020 (9) TMI 50 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Various illegal acts committed by Corporate Debtor in collective connivance to strip the SPV Company - HELD THAT:- It is clear that at present, the Corporate Debtor is in Liquidation and the Liquidation Proceedings which are time bound proceedings are pending. In Liquidation Proceedings of the Corporate Debtor investigations with regard to the transactions relating to some other entity referred as SPV cannot be said to be relevant.
The Adjudicating Authority has already observed that the Applicant/Appellant can initiate appropriate criminal/civil proceedings, if any, before the Appropriate Authority and Forum. If the Appellant has any grievances against the acts committed by the Corporate Debtor with regard to the SPV Company, the appropriate legal recourse would always be open. In Liquidation proceedings of the Corporate Debtor it is not necessary to decide the issue as filed by the Appellant. Proceedings under Insolvency and Bankruptcy Code are basically summary in nature and it is not possible to decide what the Learned Sr. Counsel is claiming to be fraud.
The proceedings of IBC cannot be so conducted, so as to make IBC unworkable.
The Appeal is dismissed at the stage of Admission.
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2020 (9) TMI 44 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Implementation of approved Resolution Plan - Section 31 of I&B Code - Appellant contends that the Adjudicating Authority vide the impugned order has failed to grant certain reliefs and concessions as provided in the approved Resolution Plan which is permissible - HELD THAT:- The Resolution Plan can only be challenged before the Appellant Tribunal on very limited groundswhich is specified in sub Clause (3) of Section 61 of the I&B Code. In this case, the Successful Resolution Applicant has challenged the approved Resolution Plan on the ground of the observations made in para 23, 24 and 25 of the impugned order, whereby the Adjudicating Authority hasdeclined to allow reliefs and concessions prayed by the Resolution Applicant. The said grounds of challenge of the approved Resolution Plan under this Appealare beyond the limited scope of Appealas prescribed under sub-Section (3) of Section 61 of the I&B Code, 2016.
It has been emphasised by the Adjudicating Authority that the Resolution Applicant has to ensure compliance under all applicable laws for the time being in force. This does not mean that the Adjudicating Authority has changed the terms of the Resolution Plan. It is pertinent to mention that after approval of the Resolution Plan, in every case, the Successful Resolution Applicant has to ensure compliance under applicable laws.
Thus, it is clear that successful resolution applicant cannot suddenly be faced with “undecided” claims after the resolution plan submitted by him has been accepted. All claims must be submitted to and decided by the resolution professional, so that a prospective Resolution Applicant knows exactly, what has to be paid, in order that it may then take over and run the business of the Corporate Debtor - The Adjudicating Authority has neither varied the terms of the approved Resolution Plan, nor denied any concession. In fact, the Adjudicating Authority has not allowed general waiver from the statutory liabilities and has specified that the Resolution Applicant may apply for such reliefs and concessions to the relevant Authorities who may consider the same as per applicable laws.
Instant Appeal against the Approved Resolution Plan is not maintainable under Sec 61(3) of the I&B Code 2016 - Appeal dismissed.
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2020 (9) TMI 15 - NATIONAL COMPANY LAW TRIBUNAL , AHMEDABAD
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and default - Time Limitation - HELD THAT:- As per the record, the date of default date of (declaration) of NPA, i.e. 30.11.2013. Hence, the limitation in the present matter would start from as per the Article 137 of the Limitation Act from the date of default, i.e. the date of declaring NPA viz. 30.11.2013, while the present I.B. Petition was filed on 15.12.2017 before this court. Hence, it is filed beyond the limitation.
The Hon'ble Supreme Court further in the matter of Vashdeo R. Bhojwani Vs. Abhyudaya Co-operative Bank Ltd. & Ors. [2019 (9) TMI 711 - SUPREME COURT] has pleased to hold that the limitation/cause of action starts from the date of default by declaring NPA and not from the date of issue of a recovery certificate if issued by the DRT and in such case, only Article 137 would apply. Thus, the Hon'ble Supreme Court pleased to dismiss the I.B. Petition being time barred.
This Adjudicating Authority need not to examine merits or to go into the controversy in the present I.B. Petition -The matter can be simply disposed of on the ground of the limitation.
As the present I.B. Petition is found to be filed beyond Limitation i.e., three years from the date of default, i.e. date of declaration of NPA and date of recalling of notice, i.e. 14.02.2014. Hence, it is held that it is hit by limitation and cannot be entertained - Petition dismissed.
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2020 (9) TMI 13 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD
Liquidation of Corporate Debtor - section 33(1)(a) of the IB Code - difference of opinion - Hon'ble Member (Judicial), Mr. Harihar Prakash Chaturvedi passed order allowing the application filed by the RP under section 33(1)(a) with a specific observation that the RP shall continue as liquidator and shall take steps as provided in the provision of the Code. However, the Hon'ble Member (Technical), Mr. Prasanta Kumar Mohanty has not agreed with the order so passed by the Hon'ble Member (Judicial) and accordingly he has given his different observation/opinion with regard to the admission of the application filed under section 9 of the IB Code.
HELD THAT:- The instant application i.e. IA 793/2019 deserves to be allowed in view of the decision passed by the Hon'ble Supreme Court in the matter of K. Sasidharan Vs. Indian Overseas Bank & Ors. [2019 (2) TMI 1043 - SUPREME COURT] where it was held that the commercial wisdom has been exercised by the COC after taking into count all the factors leading to maximisation of asset value of the Corporate Debtor, but the ultimate discretion of what to pay and how to pay each class or sub-class of creditors lies with the COC - The said decision is also relied upon by the Hon'ble Member (Judicial), Mr. Harihar Prakash Chaturvedi, while passing the order.
I concur with the order so passed by the Hon'ble Member (Judicial) and accordingly the application so filed by the RP is allowed.
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2020 (9) TMI 12 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of default and debt - time limitation - HELD THAT:- The application of Article 137 of the Limitation Act, 1963 for moving application under Sections 7 or 9 of the I&B Code, fell for consideration before the Hon’ble Supreme Court and this Appellate Tribunal in number of cases. In B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES [2018 (10) TMI 777 - SUPREME COURT], the Hon’ble Supreme Court held that the Limitation Act, 1963 has in fact been applied from the inception of the Code.
Similar issue fell for consideration before the Hon’ble Supreme Court in GAURAV HARGOVINDBHAI DAVE VERSUS ASSET RECONSTRUCTION COMPANY (INDIA) LTD. AND ANR. [2019 (9) TMI 1019 - SUPREME COURT]. In the said case, the Hon’ble Supreme Court has noticed that the Respondent was declared NPA on 21st July, 2011. The Bank had filed two OAs before the Debts Recovery Tribunal in 2012 to recover the total debt. Taking into consideration the facts, the Supreme Court held that the default having taken place and as the account was declared NPA on 21st July, 2011, the application under Section 7 was barred by limitation.
As, the ‘Corporate Debtor’ having committed default prior to 9th September, 2014, i.e. much before the assignment of debt to Phoenix ARC Private Limited, we hold that the Application under Section 7 of the I&B Code was barred prior to 9th September, 2017 - The Application under Section 7 of the I&B Code was filed on 29th September, 2017, i.e., much after three years of the cut-off period of default, which was prior to 9th September, 2017.
Section 22 of the Limitation Act, 1963 relates to ‘breaches and torts’, for the purpose of counting the fresh period of limitation. The said Section 22 of the Limitation Act, 1963 may be applicable to find out whether the claim is barred by limitation or not, but cannot be made applicable for counting the period of limitation for Application under Section 7 of the I&B Code, which is to be counted from the date of default/ NPA as held by the Hon’ble Supreme Court in terms of Section 7(5) of the I&B Code - The ‘Corporate Debtor’ is released from all the rigors of ‘Corporate Insolvency Resolution Process’. The ‘Interim Resolution Professional’ will handover the assets and records of the ‘Corporate Debtor’ to the Promoters/ Board of Directors immediately. The case is remitted to the Adjudicating Authority (National Company Law Tribunal) for determination of fee and Corporate Insolvency Resolution cost payable to ‘Interim Resolution Professional’/ ‘Resolution Professional’, which will be borne by Phoenix ARC Private Limited.
Appeal allowed.
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2020 (9) TMI 11 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Debt or not - HELD THAT:- By looking at the agreement entered into between the parties, this money has been shown as money paid towards fully and compulsorily convertible debentures for the value mentioned therein, it is not the case of the Corporate Debtor that this money has not come into the account, indeed it is the case of the Corporate Debtor until before this case is filed that this is a long term borrowings as per the balance sheet of the Company and it is also the case of the Corporate Debtor that TDS has been deducted on the interest accrued against the compulsorily convertible debentures held by the applicant - When a party admits a factual aspect stating that applicant is a creditor, debentures are lying in its name and the debt is shown as long term borrowing, then such party cannot take out diametrically opposite stand stating that the debt being shown as capital under FEMA or under some other Regulations, therefore it is not a debt.
It is true that in the agreement, that after 15 years, these debentures would become equity, but until such time the Corporate Debtor shall pay fixed returns to this applicant. The RP merely by showing this, the RP Counsel cannot come with an argument to say that this is to be treated as equity for redemption of debentures has not been envisaged in the agreement. At the time of winding up or admission of a case under IBC, if the debentures are not matured and not convertible for the period for redemption is not complete, they shall be treated as debentures and the consequence is, it will remain as debt - Same is the case here, debentures are not matured for conversion, interest shall be paid through coupons periodically. That has also not complied with.
This application is hereby allowed directing the Resolution Professional to admit the claim as Financial Debt as envisaged under Section 5(8) (c) of the Insolvency and Bankruptcy Code, 2016.
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2020 (9) TMI 10 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD
Exclusion of certain period from Corporate Insolvency Resolution Process - Section 12 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- On perusal of the record it is found that CP (IB) 594 of 2018 was admitted by this Adjudicating Authority on 26.04.2019 and further, 90 days beyond 180 days was extended on 22.10.2019. The RP has moved this application for seeking exclusion for certain days as there is high probability of approval and/or acceptance of proposed Resolution Plan and thereby, the Corporate Debtor can be saved as a going concern.
Looking to the very object of IB Code, CoC desires to get exclusion of certain period from the CIRP as there is every likelihood that some Resolution Plan will be accepted and/or approved by the CoC. In that event, a Corporate Debtor will be saved from Liquidation and more so, livelihood of number of employees' dependent on the Corporate Debtor will also be saved.
A similar view is reiterated by the Hon'ble Supreme Court in Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and Ors. [2019 (11) TMI 731 - SUPREME COURT] observed that even an extension beyond 330 days' timeline as specified in the IB Code can be granted by the Adjudicating Authority under exceptional circumstances.
Under the given facts and circumstances as stated, if the time is extended within the outer limit of 330 days, there is every likelihood that some Resolution Applicant may succeed for its acceptance and approval - the application so filed by RP is allowed by excluding 41 i.e. 10 days from the date of admission of the Petition till the order being served upon the IRP, 17 days from stay on conducting CoC meeting and 15 days from the filing of the instant application till its pronouncement.
Application allowed.
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