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Insolvency and Bankruptcy - Case Laws
Showing 61 to 80 of 188 Records
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2020 (9) TMI 997 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment of its debt - Financial Debt or not - existence of debt and dispute or not - HELD THAT:- It is evident that Petitioner had granted Financial assistance to the Corporate Debtor, the same was disbursed to the Corporate Debtor and there was a default in repayment of the said dues - The nature of debt is a “Financial Debt” as defined under section 5 (8) of the Code. It has also been established that admittedly there is a “Default” as defined under section 3 (12) of the Code on the part of the Corporate Debtor.
This Bench having been satisfied with the petition filed by the Petitioner which is in compliance of provisions of Section 7 of the Code, admits this Petition declaring moratorium - petition admitted.
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2020 (9) TMI 996 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI BENCH
Maintainability of application - initiation of CIRP - alleged default on the part of the corporate debtor in settling an amount towards the assured returns as promised by the corporate debtor - existence of debt becoming due or not - major point raised by the corporate debtor is that the debt has not yet become due as per the conditions of MOU executed between the parties - HELD THAT:- A perusal of the clause of MOU signed between the parties on 1st February, 2014 reveals that the assured return shall be payable only upon execution of the Unit Buyer's Agreement on the Company's standard format. The financial creditors have not shown any proof to establish the fact that they have got the Unit Buyer's Agreement duly executed by both the parties. As a result of failure to produce the duly signed Unit Buyer's Agreement, it is considered that the debt has not yet become due.
Petition dismissed.
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2020 (9) TMI 995 - NATIONAL COMPANY LAW TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Liquidation of the Corporate Debtor - Section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In the factual background and in the absence of any approved resolution plan and for want of time beyond statutory CIRP period; there is no other alternative left but to order in conformity with the decision of the Committee of Creditors, for liquidation of the corporate debtor under Section 33 of the Code.
The application is allowed by ordering liquidation of the corporate debtor, namely M/s. Beta Infratech Private Limited in the manner laid down in the Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016.
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2020 (9) TMI 994 - NATIONAL COMPANY LAW TRIBUNAL CHENNAI BENCH
Approval of resolution passed by the Committee of Creditors for initiation of Liquidation process - appointment of Liquidator for initiation of liquidation process for the Corporate Debtor - section 33(2) of the IBC, 2016 - HELD THAT:- This Tribunal is of the view that, since the Corporate Debtor is an MSME, even if the promoters- directors have been declared as 'wilful defaulters', they can apply under the provisions of Section 230 of the Companies Act, 2013 as they are exempted from Section 29A of IBC, 2016. Even after the declaration of initiation of liquidation proceedings, the promoters- directors still have a chance to tender definite plan for taking over the company as a going concern or under the provisions of Section 230 of the Companies Act, 2013. The Regulation 2B of the IBBI (Liquidation Process) Regulations, 2016 contemplates that a period of 90 days has to be provided for completion of a Scheme of compromise or arrangement from the date of the order of liquidation, during which period the prospective Resolution Applicant can very well submit his Scheme under Section 230 of the Companies Act, 2013 - In terms of Section 240-A(l) "notwithstanding anything to the contrary contained in this Code, the provisions of Clause (c) and (h) of Section 240-A shall not apply to the Resolution Applicant in respect of CIRP of any Micro, Small and Medium Enterprises (MSME)". It is seen that in the Review Committee for "wilful defaulters" held on 12.03.2018, the sole member of CoC (Financial Creditor - Indian Overseas Bank) has declared the promoter-director as 'wilful defaulter'.
This Tribunal is of the opinion that there is no need to interfere with the decision of the CoC as communicated by the Resolution Professional and hence proceeds to consider the application made under Section 33 for liquidation of the Corporate Debtor. Therefore, application filed by the Promoter-Director is liable to be "dismissed".
Application filed by the Promoter Director stands dismissed - application filed for initiation of Liquidation process of the Corporate Debtor is hereby allowed.
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2020 (9) TMI 993 - NATIONAL COMPANY LAW TRIBUNAL HYDERABAD BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Time Limitation - also allegation that application filed without proper authorization - debt as well as quality of service under dispute.
Time Limitation - HELD THAT:- It is observed that the Operational Creditor has approached this Adjudicating Authority pursuant to orders of the then Hon'ble High Court of Andhra Pradesh wherein it was directed to transfer the winding up proceedings vide I.A. No. 5/2018 in C.P. No. 34/2011 dated 18.07.2018 to the NCLT Hyderabad Bench and that pursuant to the said order, the Operational Creditor has approached this Adjudicating Authority by issuing Demand Notice U/s. 8 of IBC. The series of events being continuous in nature and approach of the Applicant before this Adjudicating Authority by virtue of the order of Hon'ble High Court of Andhra Pradesh covers the plea of Limitation and therefore the Application is within Limitation.
Pre-existing dispute or not - HELD THAT:- The Applicant had preferred a Civil Suit bearing O.S. No. 778 of 2013 before the City Civil Court, Hyderabad against the Corporate Debtor wherein the Corporate Debtor herein has raised certain disputes by way of filing a counter-affidavit. However, the said matter was dismissed for default due to non-prosecution by the applicant herein - It is observed that though the Civil Suit bearing O.S. No. 778 of 2013 before the City Civil Court, Hyderabad was dismissed for default but there were many disputes raised by the Corporate Debtor therein and a counter claim of ' 41,00,000/- was also made. Further the Corporate Debtor duly replied to the Demand Notice issued U/s. 8 of IBC by the operational creditor which reflects and highlights that there is existence of dispute between the parties.
On consideration of the above said email correspondence as well as disputes raised by the Corporate Debtor by way of Counter affidavit filed in the Civil Suit referred to hereinbefore, this Adjudicating Authority observes that there is evidence on record which indicates that there was pre-existence of dispute between the Applicant and Respondent in respect of the claims made by the Applicants - Since there exists a real dispute between the Applicant and Respondents in respect of claims made vide invoices raised in the month of May, 2010, we are not inclined to admit this Application.
Application dismissed.
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2020 (9) TMI 992 - NATIONAL COMPANY LAW TRIBUNAL , NEW DELHI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Debt or not - Existence of debt and dispute or not - HELD THAT:- Debt means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt which means debt includes the financial debt and operational debt and definition of financial debt shows that a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes either of clause (a) to (i) and if the amount paid comes under the definition of Section 5(8) of the IBC only in that case a person who gave the money comes under the definition of Financial Creditor.
In the case in hand, there is no dispute that certain amount has been advanced by the Petitioner to the Corporate Debtor through RTGS payments on different dates but the question is that can the amount be treated as a financial debt or not? We find that the Petitioner in his application, everywhere referred the word 'loan amount' and not the debt and against that loan amount, he was getting the interest from the Corporate Debtor, therefore, we are unable to accept the contention of the Petitioner that he is the Financial Creditor under Section 5(7) and the amount which he has advanced as a loan comes under the definition of Section 5(8) - Further, the issuance of TDS certificates does not amount to an admission of liability and the TDS certificate is primarily to acknowledge the deduction of tax at source.
There are no documents of loan agreement, which would show, what was the agreed rate of interest and as we have already referred the definition of financial debt and on the basis of the same we are of the considered view that the claim of the petitioner do not come under any of the clause (a) to (i) of Section 5(8) of IBC.
The Petitioner has neither enclosed the resolution passed by the Board of Director of the Corporate Debtor Company nor enclosed the resolution passed by the Board of Director of his company by which the company was authorized to disburse the loan. We have already held that there is no written agreement - the Petitioner has failed to convince us that the amount which he has paid comes under the definition of Financial Debt and the applicant is the Financial Creditor therefore, the present application is not maintainable.
Application dismissed.
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2020 (9) TMI 991 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Direction to First and Second Respondents to supply the Electricity to the Corporate Debtor in the present circumstances without insisting on the payment of past dues or any other preconditions so as to make the company as going concern - HELD THAT:- The Respondent has filed the Counter wherein it is contended that since the electricity connection was disconnected on 23.10.2018 much prior to the commencement of the CIRP due to non-payment of the arrears and if aggrieved by the action of the Respondent a remedy is also open for the company namely, M/s. Supreme Coated Board Mills Private Limited to take recourse in approaching the concerned authority seeking for re-connection if aggrieved by the Applicant and not by approaching this Tribunal with the instant Application.
It is to be noticed that the Hon'ble Supreme Court has repeatedly reiterated in relation to IBC, 2016 and proceedings thereunder that resolution of insolvency of the Corporate Debtor, if possible should be attempted at any cost instead of allowing the Company to go into liquidation - The Respondent was agreeable to such a course of action without prejudice to its contentions that this matter will not fall under the provisions of Section 14(2) of the Insolvency & Bankruptcy Code, 2016.
The request of the CoC expressed through the Applicants seems to be fair to the limited extent that since the machinery had been kept in idle condition for more than 8 to 9 months and which might be a detrimental factor to maximize the value of the assets appropriate directions given under the circumstances to the Respondents who are agreeable to such a course by directing them to give the re-connection of electricity for a limited period of three weeks with the date of commencement as to when the re-connection to be given to be intimated to the Respondent in advance by the Applicant at least a week prior in consultation with the CoC. Charges for re-connection as well as consumption charges for the three weeks period shall be duly remitted by the Applicant.
Application disposed off.
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2020 (9) TMI 990 - NATIONAL COMPANY LAW TRIBUNAL , KOLKATA BENCH
Validity of e-auction - submission of cunter-bid - declaration of earlier auction as illegal and bad - HELD THAT:- The liquidator under Regulation 33(3) can deal with the aspect of collusion between various parties which ultimately effects the maximization of value of all assets of the corporate debtor adversely. No doubt, the sanctity of auction process has to be maintained i.e., once it is closed, normally it should not be reopened as generally understood. As stated earlier, generally the same can be done only on two grounds i.e., fraud or material irregularity occurred in the process of auction. However, another ground is added by IBC, 2016 i.e., maximization of value of assets of corporate debtor. Thus, when a situation of challenge to auction process arises on the ground of assets are not being sold at the maximum possible value, then, also in our considered view, auction process can be enquired into and such process can be set aside on this ground also. Another aspect which needs to be considered is that a person who is ready to pay more cannot be debarred or legal technicalities cannot be allowed to come in its way. Further, when liquidator is having an opportunity to approach this Authority in case of collusion, but when the maximization of value of assets is apparently not happening, though may or may not exist, any other interested party can certainly approach this Authority under sections 60(5)(a) / 60(5)(c) of IBC, 2016. Such person, in our considered view, cannot be rendered remedyless.
It is apparent that there is a departure from the earlier concept of supremacy of Committee of Creditors as the decisions of Committee of Creditors now can be looked upon in the light of preamble to IBC, 2016 and Committee of Creditors may be required to reconsider the resolution plan to achieve such objectives. In our considered view, this rationale also applies to the decisions of liquidator - the decisions of the liquidator can certainly be looked upon by this Authority when such decisions are not in consonance with the stated objectives of IBC, 2016.
In the present case, as stated earlier, e-auction was taken only once. Only one bidder has participated and that too, bid at a reserve price. This bid has been accepted by the liquidator. No reason has been brought on record by the liquidator as to why multiple rounds of auctions were not required as mandated in clause 1 of part 1 of Schedule I. Further, this situation is also violative of Regulation 39 of Liquidation Process Regulation Rules, 2016 as the maximization was not endeavoured - Further, as per notice inviting for expression of interest, balance consideration was to be deposited within 7 days from the date when any bidder is declared successful. However, in the present case, such condition has also been relaxed by taking a bank guarantee for an amount of ₹ 10 Crores approx. Thus, there exists not only contravention of the preamble to the Code and Regulations made thereunder but also an irregularity/deviation.
As evident from the various provisions of the Code as well as Liquidation Process Regulations discussed herein before, maximization of value of the assets of the corporate debtor is a key factor / prime consideration and in the present case this object has not been achieved by accepting the bid of the applicant at the reserve price which has been now outbid by a substantial higher amount. Much higher Earnest money has also been deposited - it is a simple case of sale of immovable property, hence, no complexities are involved and, therefore, the only criteria which needs to be applied here is higher bid in monetary terms as well as having regard to time value of money should exist and on this criteria new bid gets through.
The old e-auction is cancelled and set aside. The proposal of applicant is accepted subject to the condition that the balance amount of total bid of ₹ 15.50 Crores for the impugned asset parcel shall be deposited within six weeks from the date of receipt of this order failing which the amount of ₹ 3.875 Crores so deposited shall stand forfeited - Application allowed.
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2020 (9) TMI 989 - NATIONAL COMPANY LAW TRIBUNAL ALLAHABAD BENCH
Liquidation of Corporate Debtor - Section 33(1) of the Insolvency & Bankruptcy Code, 2016 - Resolution Professional has filed the present application for resolution as statutory period has elapsed from the date of initiation of CIRP and no Resolution Plan has been approved by the CoC - HELD THAT:- It is pertinent to refer Section 33(1)(a) of the IBC, which mandates that "where the Adjudicating Authority before the expiry of maximum period permitted for completion of the corporate insolvency resolution process under Section 12 or the fast track corporate insolvency resolution process under Section 56, as the case may be, does not receive a resolution plan under sub-section (6) of Section 30, it shall pass an order requiring the Corporate Debtor to be liquidated in the manner as laid down in the manner."
Therefore, the Tribunal observes that upon failure of the resolution process and no approved resolution plan and further on completion of statutory CIRP process, there is no alternative left but to order in conformity with the decision of the CoC liquidation has to follow under Section 33 of the Code. Adherence of the statutory requirement has to be done, as the language of the Code is clear that the adjudicating authority must give effect to it whatever may be consequences.
Thus, the application is allowed by ordering liquidation of Corporate Debtor i.e. JVL Agro Industries Ltd. in the manner laid down in Chapter III Part II of IBC, 2016 and further appoint Supriyo Kumar Chaudhari as a liquidator in terms of Section 34(1) of the Code, and he is directed to issue public announcement stating that the Corporate Debtor is in liquidation, in terms of Regulation 12 of IBBI (Liquidation Process) Regulations, 2016 - Application allowed.
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2020 (9) TMI 948 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- All problems have started from June 2017 from the time the quality of material supplied in few lots were of inferior quality leading to production disruption to the Corporate Debtor. It is also clear that the dispute has been raised also against the reply to the demand notice and the demand notice was replied within due time as per the provisions of the Code.
The Hon’ble Apex Court has observed in Mobilox Innovative Private Limited Vs. Kirusa Software Private Limited [2017 (9) TMI 1270 - SUPREME COURT] that “It is clear, therefore that once the Operational Creditor has filed an application, which is otherwise complete, the Adjudicating Authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the Operational Creditor or there is a record of dispute in the information utility - In the present case, it is clear that such notice must bring to the notice of Operational Creditor the “existence” of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the Adjudicating Authority is to see at this stage is whether there is a plausible contention which required further investigation and that the “dispute” is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster.”
Section 9(5) (ii) (d) of the Code, specifically provides for considering ‘Dispute’ by the Adjudicating Authority, empowering it to reject the Application and communicate the decision to the Operational Creditor and Corporate Debtor, if notice of dispute has been received by the Operational Creditor - “IBC is not a recovery law”. Its purpose is to save the companies and also to allow them to be going concern. Again, email dated 06.07.2017 does show pre-existing dispute regarding quality of supply.
The impugned order dated 19.02.2020 passed by Adjudicating Authority (‘National Company Law Tribunal, Ahmedabad Bench, Ahmedabad’) is set aside - appeal allowed.
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2020 (9) TMI 947 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Prosecution proceedings against sleeping directors for failure to assist RP - Non supply of Documents / Account Books - Principles of Natural Justice - SCN not properly appreciated - Appellants submits that the Adjudicating Authority (NCLT, Chandigarh) while passing the impugned order dated 23.03.2020 had not considered the circular dated 02.03.2020 issued by the Government of India whereby a clarification was given in regard to the prosecution filed or internal adjudication proceedings initiated against the ‘Independent Directors’, ‘Non-Promoters’ and ‘Non-KMP’, ‘Non-Executive Directors’ and this had resulted in miscarriage of Justice.
HELD THAT:- It comes to be known that the 1st Respondent / Resolution Professional filed application under Section 19 of the ‘I&B’ Code r/w relevant Rules and Regulations seeking directions to the ‘effect’ that the ‘Members of the Suspended Board of Directors’ of the ‘Corporate Debtor’ and their ‘Associates’ be directed to submit / hand over all the requisite books, financial debtor, returns and assets to the ‘Resolution Professional’ immediately and also provide necessary assistance/cooperation in smooth conduct of ‘Corporate Insolvency Resolution Process’ - The 1st Respondent / Resolution Professional in CA 3/2019 before the Adjudicating Authority had stated that the ‘Corporate Debtor’ is a public limited company with its shares closely held within family members and that sufficient time was given to the members suspended Board of Directors of the ‘Corporate Debtor’ to provide all necessary Books, Financial Data, Information and Returns. However, they had failed to comply with the directions given by the 1st Respondent / Interim Resolution Professional in this regard and hence the said application was filed.
I&B Code - HELD THAT:- It cannot be lost sight of that where any personnel of the ‘Corporate Debtor’ does not render assistance or cooperation to the ‘Interim Resolution Professional’, the ‘National Company Law Tribunal’ / ‘Adjudicating Authority’ on the application projected by the ‘Interim Resolution Professional’ is empowered to pass an order and direct the person(s) to comply with the instructions of the ‘Interim Resolution Professional’ and cooperate with him in the collection of information and management of the ‘Corporate Debtor’ - In so far as Section 236 of the ‘I&B’ Code is concerned, it speaks of ‘Trial Of Offences’ by ‘Special Court’. In reality, no ‘Court’ shall take cognisance of any offence punishable under this Act save on a complaint made by the ‘IBBI’ or the Central Government or any person authorised by the Central Government in this behalf. To put it precisely, for prosecution of offences under the ‘I&B’ Code, lodging of complaint by the ‘IBBI’, the Central Government or any other officer authorised by the Central Government in this behalf is required.
Independent Director - HELD THAT:- The burden of proof to establish that act of commission or omission by a company which are contrary to Law was carried out without his knowledge lies on the ‘Independent Director’. Continuing further, an ‘Independent Director’ and a non-executive Director other than promoter or key managerial personnel shall be held liable for such acts of commission(s) or omission(s) in relation to any actions of the company, which is within its knowledge and could be attributed to him through Board Processes - In the instant case on hand, it cannot be said that the Appellant(s) (in both the Appeals) were not provided with the opportunities relating to furnishing of information in respect of books and assets, financial data, returns etc. to the ‘Resolution Professional’. To put it succinctly, on 12.10.2019 a notice was issued by the 1st Respondent / Resolution Professional to the Directors of ‘Corporate Debtor’ wherein specific information was sought for in respect of (i) all books of accounts, financial statements, returns w.e.f. 01.04.2014 till date (ii) computer systems containing accounting records along with software being used w.e.f. 01.04.2014 till date etc.
A mere running of the eye of the ingredients of Section 19 of the Code latently and patently imposes an obligation on the personnel and promoters of the ‘Corporate Debtor’ to extend all assistance and cooperation which the ‘Interim Resolution Professional’ will require in running / managing the affairs of the CD. In fact, the term ‘personnel’ is defined to mean the employees, directors, mangers, key managerial personnel etc., if any of the ‘Corporate Debtor’ and this is meant to render assistance to the ‘Interim Resolution Professional’ in carrying out his duties in an effective and efficacious manner.
This Tribunal, on going through the Impugned Order dated 23.03.2020 passed by the ‘Adjudicating Authority’ in CA No. 3/2019 in CP (IB) No. 70/Chd/Hry/2018 comes to a resultant conclusion that the ‘Adjudicating Authority’ in Law, is well within its ambit to make a recommendation for considering the aspect of commencement of proceedings and not a recommendation for initiation of criminal proceedings and in this regard it is for the ‘Insolvency Bankruptcy Board of India’ to take a final call, of course, after applying its independent overall assessment in an objective and dispassionate manner and to act accordingly, in the subject matter in issue - the ‘Adjudicating Authority’ while passing the impugned order had not exceeded its jurisdiction.
The impugned order passed by the ‘Adjudicating Authority’ does not suffer from any patent illegality in the eye of Law - Appeal dismissed.
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2020 (9) TMI 946 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - HELD THAT:- There was no pre-existing dispute between the parties with regards the debt which has become due and remained unpaid for more than 1 Lakh as the corporate debtor has failed to present any document to support its averment - The corporate debtor has not placed on record any communication or document which exhibits the plausible dispute between the parties. There is no merit in the so-called dispute raised by the corporate debtor as mere reply filed by the corporate debtor to the present application, is unable to establish any pre-existing dispute of genuine nature. On the contrary the decree for recovery of dues passed by the Ld. ADJ Rohini Court, New Delhi dated 08.09.2016, belies its story of dispute and confirms the admission of liability of the corporate debtor. This leaves no doubt that the default has occurred for the payment of the operational debt for which the invoices were raised by the applicant and the so called dispute raised by the corporate debtor is merely a moonshine dispute.
The dispute raised by the corporate debtor, is spurious, plainly frivolous and unable to categorize as genuine dispute as reproduced above. Hence, contention of the corporate debtor, of a pre existing dispute without any evidence and merit is a clear after thought to defeat the claim of the applicant - the present application is complete and the Applicant has established its claim which is payable and due by the corporate debtor.
Time Limitation - HELD THAT:- The date of decree passed by the Ld. ADJ Rohini Courts New Delhi is 08.09.2016, as the date of default and the present application is filed on 06/06/2019. Hence the application is not time barred and filed within the period of limitation - The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application.
Application admitted - moratorium declared.
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2020 (9) TMI 945 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - HELD THAT:- The corporate debtor has not placed on record any document which exhibits the plausible dispute with respect to the quality of the materials supplied by the applicant nor with respect to the existence of the amount of alleged debt. Moreover, the notice under section 8 of code has not been disputed by the corporate debtor. It is only when application under section 9 is filed, the corporate debtor has come foreword with lame defence and without any evidence. It can be thus inferred that there is no merit in the so-called dispute raised by the corporate debtor in reply to the application. Therefore, it goes beyond doubt that the Applicant is entitled to claim its dues.
Time Limitation - HELD THAT:- The date of default is occurred from 01.09.2018 and application is filed on 01.11.2018 hence the debt is not time barred and the application is filed within the period of limitation.
Jurisdiction - HELD THAT:- The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application.
The present application is complete and the applicant has established the default in payment of the operational debt, hence is entitled to claim. The present application is admitted - Application admitted - moratorium declared.
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2020 (9) TMI 944 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Time Limitation - HELD THAT:- It is pertinent to note that the corporate debtor has failed to appear and present his defense hence has been proceeded ex-parte vide order dated 12.02.2020 - The date of default is 22.12.2016 and the present application is filed on 17.12.2019. Hence the application is not time barred and filed within the period of limitation - The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application.
The present application is filed on the Performa prescribed under Rule 6 of the Insolvency and Bankruptcy Code, 2016 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 r/w Section 9 of the code and is complete. Considering the submission of counsel and documents on record the applicant is entitled to claim its dues, establishing the default in payment of the operational debt. Hence, the application is admitted - application admitted - moratorium declared.
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2020 (9) TMI 943 - NATIONAL COMPANY LAW TRIBUNAL , HYDERABAD BENCH
Directions to the Resolution professional to provide or furnish the details of fair value/liquidation value of the assets of the corporate debtor - Direction to Respondent to provide the information pertaining to claims submitted by the secured and unsecured creditors to the Resolution professional/Interim Resolution Professional - section 60(5) of Insolvency and Bankruptcy Code, 2016 Read with Rule 11 of NCLT Rules, 2016 - HELD THAT:- Regarding claims admitted by the RP the applicant wanted directions to RP to furnish the information with regard to those claims. In fact applicant has participated in the COC meetings and the issue of claims were placed for consideration. The RP has filed minutes of the COC meetings. The applicant participated in all the COC meetings and applicant should have been informed of all the claims admitted having attended the COC meetings. It is not true that RP has not disclosed the information about the admission of the claims since claims which were admitted will be disclosed in the website of the corporate debtor. Therefore, applicant has knowledge about the claims admitted by the RP. Since he attended the COC meetings. Accordingly, no direction need be given to the RP in this regard.
The contention of learned counsel for RP is that the erst while members of Board are only entitled to look into the plan as soon as resolution plan is filed with the COC it will be given to the applicant and there is no question of disclosing any information regarding Fair value and liquidation value.
Application dismissed.
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2020 (9) TMI 942 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Liquidation of Corporate Debtor - requisite documents not submitted - HELD THAT:- In order to consider any claim of a Party, concerned Party has to submit the requisite document(s) to the Concerned Authority to consider its claim. An Authority, which is required to consider a claim of a party, is entitled to ask the Party to substantiate its claim by producing relevant document(s) in addition to document(s) already furnished along with Claim. The contention of Applicant that documents already furnished along with its claim would suffice to accept its claim is not at all tenable, and it is liable to be rejected. The Liquidator is having every right to ask the Applicant to submit requisite documents as he thought it relevant to the issue in question. Moreover, the documents in question, asked for by the Liquidator, are prima facie, found to be relevant to the issue in question. Since the Corporate Debtor is in liquidation, the Liquidator is under statutory Obligation to scrutinise the Claims as per available records of Corporate Debtor with reference to the documents filed by respective claimants. Therefore, the stand Of the Liquidator in asking the Applicant to substantiate its claim by producing the requisite documents in question, is to be held within his rights.
The Applicant, if so advised, can submit a suitable Representation to Liquidator, along with requisite documents as asked for, within a period of two weeks from the date of receipt of copy of this order - On receipt of above representation, the Learned Liquidator is directed to re-consider the claim as per law, and pass speaking order within two weeks thereafter, and communicate the same to the Applicant, immediately.
Application disposed off.
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2020 (9) TMI 941 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - Initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial debt or not - Aggrieved Person or not - HELD THAT:- It is to be borne in mind that in a subsisting application, liability to pay a sum of money is condition precedent of a 'Financial Debt'. The 'Financial Debt' represents the money payable in respect of loan borrowing made by a Corporate Debtor. In short, the sum of money is certainly and in all events payable is a 'Debt', disregard to the fact whether it is payable now or at a later point of time, in the considered opinion of this Tribunal.
Indeed, in Part II of the IBC, Section 63 expressly oust the 'Jurisdiction' of a 'Civil Court' or an 'Authority' and specifies that such Civil Court or an 'Authority' cannot entertain any suit or proceedings which are in the nature of a 'lis' in respect of which the 'National Company Law Tribunal' or 'National Company Law Appellate Tribunal' has jurisdiction. As per Section 7 of the Code, a Financial Creditor' can initiate 'Insolvency Proceedings' against the 'Corporate Debtor' before the 'Adjudicating Authority'. Section 4 of the Code says that Part II applies to all matters relating to 'Insolvency' and 'Liquidation of 'Corporate Debtors' where the minimum amount of the default is Rs. One Lakh. In terms of Section 9 of the Code, an 'Operational Creditor' after fulfilling the requirements of Section 8, can initiate the 'CIRP' against the 'Corporate Debtor' before an Adjudicating Authority. In pith and substance if the 'Debt' due and payable is above One lakh rupees, then the Application for 'Corporate Insolvency Resolution' can be filed before the Adjudicating Authority i.e. NCLT and not before any other fora. Furthermore, the ingredients of Section 238 of the Code operates against other laws when they are in conflict with the Code - the Application (under Section 7 of the Code) filed by the 1st Respondent/Applicant (Financial creditor) is perfectly per se maintainable in Law.
As far as the present case is concerned, the 'Memorandum of Understanding' consists of two transactions i.e. one is related to the granting of loan and the other is in regard to formation of SPV. These transactions are quite independent of each other. The Loan was given by the Respondent to the 'Corporate Debtor' and its group Companies and for which promissory notes were executed. Section 5(7) of the Code defines 'Financial Creditor' meaning any person to whom a Financial Debt is owed and includes a person to whom such debt has been legally assigned or transferred - Considering the fact that in the instant case, there is a 'Debt' and 'Due' payable by the Corporate Debtor and a default was committed by the Corporate Debtor, this Tribunal without any haziness holds that the impugned order of the Adjudicating Authority ('National Company Law Tribunal, Kolkata Bench) dated 25.10.2019 in admitting the Section 7 Application filed by the Respondent/Financial Creditor is free from any patent illegalities.
Appeal dismissed.
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2020 (9) TMI 940 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Debt or not - existence of debt and dispute or not - HELD THAT:- The debt arising out of non-payment of lease rent does not fall under the definition of 'operational debt' as defined under Section 5(21) of the Code (even though it may otherwise be a debt), and the Petitioner cannot be termed as an 'Operational Creditor' within the meaning of Section 5(20) and for the purpose of the Code.
It is also seen from the Petition that there existed a substantial dispute over the debt in question, prior to the filing of this Petition. It had filed a suit before the Court of City Civil Judge at Bengaluru under the Code of Civil Procedure on 1st October, 2018. The matter went to the Lok Adalat. Some payments were made but later the cheques paid towards rent were dishonoured on 31st January, 2019. The settlement was got annulled through the Civil Court. The Demand Notice as prescribed under the Code was issued on 11th October, 2019. This Petition was filed even later. There was therefore a pre-existing dispute, and was still pending in the Hon'ble Civil Court at Bengaluru - In the instant case, neither could the debt be considered to be an Operational debt for the reasons mentioned in the foregoing paragraphs, nor was there a clear undisputed debt as there was a pre-existing dispute taken to the Hon'ble Civil Court, much prior to the issue of the Demand Notice in Form 3 and Form 4 as prescribed under the Code on 11th October, 2019, which was received by the Corporate Debtor on 14th October, 2019. For this reason, also, the Petition has to be dismissed.
Petition dismissed.
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2020 (9) TMI 896 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD BENCH
Liquidation of the Corporate Debtor - appointment of the Liquidator - section 33(1), 33(2) & 34(l) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is found that no response was received from any person or proposed Resolution Applicant and also, there is no ongoing business of the Corporate Debtor. Therefore, the CoC has resolved for liquidation of the Corporate Debtor vide its Fourth meeting dated 15.06.2020. It is also to be noted that this Adjudicating Authority has no jurisdiction to interfere in the commercial wisdom of the CoC.
Application is allowed and the Adjudicating Authority passes an order for initiation of liquidation of the Corporate Debtor viz., Shree Santosh Cotton Spin Private Limited. The RP i.e. Mr. Bhupendra Singh Narayan Singh Rajput, shall act as the Liquidator for the purpose of liquidation of the Corporate Debtor.
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2020 (9) TMI 895 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU 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:- There is no doubt that there is an admitted debt and a default as per the agreed terms between the two parties. On the other hand the Petitioner admits that the present loan was renewed as the Respondent had been repaying the earlier debts. Thus, there is a running account between the two and the Respondent has given an undertaking that it has made arrangements for paying the debt and only requires some more time to settle the debt.
No case has been made out by the Petitioner that the Respondent has become insolvent or has lost its substratum such that it cannot pay its debts or run its business. On the other hand, the Respondent is a leading renewable energy developer in Karnataka, and employs over 200 employees across its 21 power generation projects, with a total revenue of ₹ 177.50 Crore. Hence, it would defeat the purpose of the Code, if a going concern generating good revenue and having a huge number of employees is subjected to the rigours of corporate insolvency resolution process.
In the facts of the instant case as brought on record and discussed above, especially that it has already received funds to be utilised for repaying its debts, we are of the considered view that the Respondent's plea that it be given some more time to repay the debt needs to be accepted, and the Respondent/Corporate Debtor be directed to settle the debt at the earliest in consultation with the Petitioner/Financial Creditor - considering the amount involved and the present economic scenario, despite the argument of the Petitioner that it is a fit case for admission.
Petition disposed of by directing the Respondent / Corporate Debtor to repay the balance debt or the amount as settled with the Petitioner within a period of 60 days, failing which the Petitioner would be at liberty to file a fresh petition for admission.
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