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Insolvency and Bankruptcy - Case Laws
Showing 1 to 20 of 1700 Records
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2021 (12) TMI 1493 - MADRAS HIGH COURT
Nomination of Judicial and Technical Members for Kochi Bench as well as for Chennai Court No.2 - HELD THAT:- It is relevant to place on record that prior to the order dated 03.12.2021, one Technical Member was working half day for Chennai Bench No.2 and half day for Kochi Bench. However, after the order dated 03.12.2021, both the Benches of the Chennai National Company Law Tribunal are fully functional.
The writ petition has become infructuous, however, it is left open for the petitioner to pursue the matter with regard to Third Bench of the National Company Law Tribunal at Chennai, in due course of time, keeping in mind the pendency of cases.
The writ petition is disposed off.
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2021 (12) TMI 1488 - NATIONAL COMPANY LAW TRIBUNAL , AHMEDABAD BENCH
Liquidation of the Respondent - liquidation sought on the ground that the Respondent committed a breach of the terms of sanctioned rehabilitation scheme duly approved by Appellate Authority for Industrial and Financial Reconstruction (AAIFR) - whether the sanctioned scheme can be treated as the Resolution Plan within the meaning of Section 5(26) of the IBC, 2016? - HELD THAT:- This Adjudicating Authority had never considered the point whether the notification dated 24.05.2017 is valid or not. The judgment of the Hon'ble NCLAT in the case of Pr. Director General of Income Tax (Admn. & TPS) Vs. M/s. Spartek Ceramics India Ltd. & Anr. [2018 (6) TMI 350 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] and further the judgment of the Hon'ble Supreme Court in the case of M/s. Spartek Ceramics India Ltd. Vs. Union of India [2018 (10) TMI 1660 - SUPREME COURT] were never placed before this Adjudicating Authority for consideration. This Adjudicating Authority had given the above advisory without considering the law laid down by the Hon'ble Supreme Court as it was not brought to the notice of the Adjudicating Authority. So, this order of the Adjudicating Authority cannot be relied on - The sanctioned scheme of rehabilitation dated 07.01.2005 cannot be termed as the Resolution Plan within the meaning of Section 5(26) of the IBC, 2016 - the issue answered in negative.
Maintainability of application under Section 33(4) of the IBC, 2016 - HELD THAT:- The sanctioned scheme of rehabilitation is not the Resolution Plan within the meaning of Section 5(26) of the IBC, 2016 - there is no question of the Respondent committing the breach of implementing any of such plan, hence, this application under Section 33(4) of the IBC, 2016 is not maintainable.
Even otherwise, the sanctioned scheme under Sick Industrial Companies (Special Provisions) Repeal Act, 2003 cannot be considered as Resolution Plan because the said scheme had not been approved by the Committee of Creditors in terms of sub-section (4) of Section 30 of IBC, 2016 which is the mandate of law - Since the approved Scheme dated 07.01.2005 cannot be treated as the Resolution Plan within the meaning of Section 5(26) of the IBC, 2016, we hold that there is no question of breach of its implementation as alleged by the Applicant herein - Issue answered in negative.
Petition dismissed.
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2021 (12) TMI 1485 - GUJARAT HIGH COURT
Wilful Defaulters - petitioners are unable to defend themselves as they are not aware about the reasons for such declaration (of wilful defaulters) - opportunity of hearing not provided to the petitioners - violation of principles of natural justice - HELD THAT:- It is incumbent upon the Identification Committee to provide an opportunity of personal hearing to the borrower and promoter, whole time director or the persons, who are to be considered as willful defaulter and the decision of such Identification Committee is to be reviewed by any other Committee, which is Review Committee as per Clause-3(c) of the Master Circular.
The Apex Court in case of STATE BANK OF INDIA VERSUS M/S. JAH DEVELOPERS PVT. LTD. & ORS. [2019 (5) TMI 862 - SUPREME COURT] while denying the right to be represented by a lawyer in the in-house proceedings contained in Para 3 of the Revised Circular dated 01.07.2015, has held that Revised Circular, being in public interest, must be construed reasonably.
The respondent bank has failed to comply with the aforesaid mechanism provided under the Revised Master Circular as petitioners were never informed by the Identification Committee by issuing show cause notice and the notice was issued by the respondent bank to which the petitioners filed detailed reply but the order passed by the Identification Committee recording that the petitioners have committed willful default was never provided to the petitioners. The petitioners came to know about declaring them as willful defaulter only from the website of CIBIL - the respondent bank while declaring the petitioners as willful defaulter has violated the provisions contained in the Revised Master Circular and has also acted in violation of principles of natural justice. As the impugned action which is penal in nature has been taken causing serious implication to the petitioners without following the basis of principles of natural justice, the impugned action of the respondent bank identifying the account of the petitioners as willful default and subsequent reporting of name of the petitioners to the RBI/CIBIL as willful defaulters are liable to be quashed and set aside.
The impugned action of the respondent bank identifying the account of the petitioners as willful defaulters and subsequent reporting of the names of the petitioners to RBI/CIBIL as willful defaulters is hereby quashed and set aside and the matter is remanded back to the Identification Committee of the respondent bank to follow the procedure as prescribed in Master Circular dated 1st July, 2015 by issuing a show cause notice to the petitioners and providing opportunity to the petitioners as per Clause-3 of the said circular.
Petition allowed by way of remand.
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2021 (12) TMI 1458 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI.
Irregularity in the e-auction process in terms of Regulation 33 and Schedule 1 of the IBBI (Liquidation Process) Regulations, 2016 or not - existence of whiff of any short of collusion between the highest bidder and other bidders - validity of cancellation of present auction - HELD THAT:- It is submitted that the Appeal may be disposed of with this liberty that in case, any occasion arises, the Appellant will be at liberty to agitate the grounds before the Appropriate forum or may file an Application for revival of this Appeal.
It is thought proper to dispose of this Appeal in the light of the aforesaid submissions - appeal disposed off.
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2021 (12) TMI 1448 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Condonation of delay of 27 days in filing the application - restoration application filed for setting aside the dismissal order allowed - good ground to condone the delay, present or not - Appellant submits that in the impugned order it has been noted that Counsel for Applicant made statement with regard to his family members being suffering from COVID-19.
HELD THAT:- There are no inconsistency with the Statement made in para 5 of the Application filed by the Applicant and statement of the counsel for the Applicant which was recorded in the impugned order.
The Adjudicating Authority condoned the delay in filing the application and restored the petition - no ground is made out to entertain this Appeal.
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2021 (12) TMI 1430 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Liquidation of Corporate Debtor - seeking directions in the Liquidation Process and Sale of the assets of the Corporate Debtor - Section 33 read with Regulation 32(b) & (e) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT:- There are no deficiency in the performance of functions of the Liquidator who has acted in accordance with the directions given by this Tribunal and as per the relevant regulations - A key benefit of selling the Corporate Debtor, as a going concern in Liquidation as against other manners of sale is, it can preserve employment while maximising the result of stakeholders. There are merit in admitting sale of the Corporate Debtor as a going concern in this Liquidation Process.
The timelines under Regulation 47 for Liquidation Process, are directory. Procedural law should not be construed as an obstruction but as an aid to Justice. Extension of time under Liquidation may be allowed only on the satisfaction that there exists exceptional circumstances - The Hon’ble Supreme Court in RANI KUSUM VERSUS KANCHAN DEVI & ORS. [2005 (8) TMI 709 - SUPREME COURT] concurring with the ratio laid down in KAILASH VERSUS NANHKU & ORS. [2005 (4) TMI 542 - SUPREME COURT], it was held that A procedural law should not ordinarily be construed as mandatory; the procedural law is always subservient to and is in aid to justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed.
Section 32(A)(4) should be read together with Section 35(1)(e) and Regulation 47. What is mandated in the Code in Section 35(1)(e) is to carry on business for its beneficial Liquidation. The Regulation therefore cannot override the objective of beneficial liquidation provided for in Section 35(1)(e) of the Code - thus, to achieve Beneficial Liquidation provided for under Section 35(1)(e) and maximisation of the value of assets under Section 53, and having regard to all reasons given below, it is found just & expedient to exercise the inherent powers under Rule 11 of the NCLAT Rules, 2016 to extend the period by six weeks to enable the Liquidator to attempt the Sale as a Going Concern at an appreciable value.
The Liquidator has adhered to the directions of the Tribunal and has acted as per the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. This extension of six weeks is being granted to achieve the objective of ‘Beneficial Liquidation’ and attempt to keep the business of the Company as a Going Concern - Appeal disposed off.
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2021 (12) TMI 1429 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Liquidation of Corporate Debtor - HELD THAT:- To achieve Beneficial Liquidation provided for under Section 35(1)(e) and maximisation of the value of assets under Section 53, and having regard to all reasons given below, it is found just & expedient to exercise the inherent powers under Rule 11 of the NCLAT Rules, 2016 to extend the period by six weeks to enable the Liquidator to attempt the Sale as a Going Concern at an appreciable value.
The Liquidator has adhered to the directions of the Tribunal and has acted as per the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. This extension of six weeks is being granted to achieve the objective of 'Beneficial Liquidation' and attempt to keep the business of the Company as a 'Going Concern'. - Appeal disposed off.
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2021 (12) TMI 1419 - GUJARAT HIGH COURT
Rights to Constitutional Remedies - case for issuance of writ of prohibition to the Tribunal, exists or not - assignment of debt by the bank - it is argued that this is a fit case in which this Court should issue a writ of prohibition to the Tribunal not to proceed further with the original application as the Tribunal has no jurisdiction to adjudicate such application in the absence of any debt - Seeking direction on Respondent No.2 to not proceed with the final hearing and adjudication of Original Application No.648 of 2018, till such time that the Resolution Plan is finally approved / confirmed by the Appellate Authorities under the provisions of the Insolvency and Bankruptcy Code, 2016 - seeking adjournment of scheduled hearings of Original Application No.648 of 2018 pending before the Respondent No.2.
HELD THAT:- A writ of prohibition is issued only when a patent lack of jurisdiction is made out. It is true that a High Court acting under Article 226 is not bound by the technical rules applying to the issuance of prerogative writs like the Certiorari, Prohibition and Mandamus in the United Kingdom, yet the basic principles and norms apply to the writ must be kept in view.
In Thirumala Tirupathi Devasthanam and another vs. Thallappaka Ananthacharyulu and another [2003 (9) TMI 784 - SUPREME COURT], the Supreme Court has cautioned that unless there are some very cogent or strong reasons, the High Court should not prevent the competent Forum from deciding the various questions raised before it including the question of “want of jurisdiction”. It is also stated that allowing a Court of competent jurisdiction to proceed with the case and decide the same rightly or wrongly, would not result in violation of any Fundamental Rights.
The net result of the authorities discussed in this case, is as follows:
(a) The writs of mandamus, certiorari and' prohibition, and for the matter of that, all high prerogative writs, are ordinarily not issued where there exists an alternative remedy equally efficient and adequate.
(b) But there is no inflexible rule that such writs cannot be issued where the Court thinks it just and convenient to do so. The fact that it ordinarily does not do so is a question not of want of jurisdiction but of expediency.
(c) Whether the alternative remedy is equally efficacious or adequate is a question of fact to be decided in each case.
(d) Where a complaint is made against any act done or purported to be done under any statutory provision, the fact that there exists in the Statute itself a possible remedy, is an important fact, to be taken into consideration. Where such provisions exist the Court will be extremely reluctant to interfere by way of high prerogative writs and especially so if the applicant has actually taken recourse to his remedy under the Statute.
(e) But the fact that there exists a remedy under the Statute does not take away the jurisdiction of the Courts to issue the writs in appropriate cases.
(f) In the following cases it has been held that a writ of prohibition will be issued notwithstanding an alternative remedy, whether under a statutory provision or otherwise: -
(g) where an inferior tribunal assumes jurisdiction and the want of jurisdiction is patent on the face of it; (ii) where the proceedings complained of are against the principles of natural justice; and (iii) where the alternative remedy is too costly or ineffective or entails such delay that the applicant would be irreparably prejudiced or the remedy might prove valueless.
THE RECOVERY OF DEBTS AND BANKRUPTCY ACT, 1993 - HELD THAT:- The case on hand is not one in which it could be said that there is a patent lack of jurisdiction in the Debts Recovery Tribunal to look into all the issues discussed above. Had it been a case of patent lack of jurisdiction, this Court would have gone into the pivotal issue and answered the same. We are of the view that the Tribunal should be allowed to look into all the relevant aspects of the matter, more particularly, the pivotal issue as regards the assignment of debt vis-a-vis the liabilities of the guarantors under the guarantees deed. The pivotal point raised by the writ applicants is one for which detailed analysis has to be made by the Tribunal itself even to find out as to whether the facts on record would clothe the Tribunal with the necessary jurisdiction to decide the issues raised before it on merits.
When we pose a question to ourselves as to instead of issuing a writ of prohibition, as prayed for, by the writ applicants, if by permitting the Tribunal to proceed further, whether any serious prejudice would be caused? We find that by adopting the said course, while no prejudice would be caused to the writ applicants, by issuing a writ as asked for, there is likelihood of a serious injustice being caused to the Bank by preventing a statutory forum from exercising the powers conferred on it by law without there being a strong or convincing grounds for issuing such a prohibition. Therefore, it would be wholly inappropriate at this stage to interfere with the Original Applications preferred by the Bank before the Debts Recovery Tribunal by issuing a writ of prohibition.
The following conclusions have been arrived at:
[a] The writs of mandamus, certiorari and' prohibition, and for the matter of that, all high prerogative writs, are ordinarily not issued where there exists an alternative remedy equally efficient and adequate.
[b] But there is no inflexible rule that such writs cannot be issued where the Court thinks it just and convenient to do so. The fact that it ordinarily does not do so is a question not of want of jurisdiction but of expediency.
[c] Whether the alternative remedy is equally efficacious or adequate is a question of fact to be decided in each case.
[d] Where a complaint is made against any act done or purported to be done under any statutory provision, the fact that there exists in the Statute itself a possible remedy, is an important fact, to be taken into consideration. Where such provisions exist the Court will be extremely reluctant to interfere by way of high prerogative writs and especially so if the applicant has actually taken recourse to his remedy under the Statute.
[e] But the fact that there exists a remedy under the Statute does not take away the jurisdiction of the Courts to issue the writs in appropriate cases.
[f] In the following cases it has been held that a writ of prohibition will be issued notwithstanding an alternative remedy, whether under a statutory provision or otherwise: -
[g] Where an inferior tribunal assumes jurisdiction and the want of jurisdiction is patent on the face of it; (ii) where the proceedings complained of are against the principles of natural justice; and (iii) where the alternative remedy is too costly or ineffective or entails such delay that the applicant would be irreparably prejudiced or the remedy might prove valueless.
[h] Whether any debt within the meaning of Section 17 of the Act, 1993 exists as on date so as to confer jurisdiction upon the Debts Recovery Tribunal under Section 19 of the Act, 1993 to adjudicate the Original Applications, would come within the purview of the D.R.T. Act. The Tribunal will have to adjudicate and decide whether with the assignment of debt by the secured creditor (State Bank of India) to the Resolution Applicant (ArcelorMittal), all other liabilities and obligations of the writ applicants as guarantors stood discharged?
These writ applications are declined as no case for issue of a writ of prohibition has been made out - application dismissed.
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2021 (12) TMI 1417 - GUJARAT HIGH COURT
Approval of Resolution Plan - It is the grievance of the applicant that the respondent has not challenged Resolution Plan before the NCLT and despite the best of the opportunities and instead it has decided to approach NCLAT directly by way of an appeal under Section 61 of the Code, which was impermissible - HELD THAT:- There does not appear to be any further challenge before the Apex Court after once the NCLAT has approved the Resolution Plan. In wake of the settled position of the law, once the Resolution Plan is approved and the approval order has been given under Section 31(1) of the Code, which has been also confirmed by the NCLAT, the same would have an overriding effect over all other laws and force including the Central Excise Act, 1944 and therefore, the appeal is not survived.
This court notices that the Tax Appeal is admitted for consideration of the substantial questions of law - appeal disposed off.
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2021 (12) TMI 1388 - CALCUTTA HIGH COURT
Validity of Lookout Circular (LoC) dated February 29, 2020 - applicability of Circulars dated March 16, 2019 issued by the Indian Banks' Association (IBA) - allegation against appellant is that the departure of the petitioner would be detrimental to the economic interest of India and larger public interest - case of petitioner is that the petitioner is neither a borrower nor a guarantor - HELD THAT:- In the present case, the respondent-authorities have failed to justify rationally as to why the departure of the petitioners from India would, in any manner, be detrimental to the sovereignty or security or integrity of India or to the bilateral relations with any country or to the strategic and/or economic interests of India as a whole. The mere subsistence of an allegation of default could not trigger the issuance of the LoC at the drop of a hat. As such, the expression "detrimental to the economic interests" of India ought not to be an excuse to restrain citizens of India from leaving the country without any convincing ground being disclosed for such restraint - In the present case, there is no allegation that the CBI has an arrest-warrant against the petitioners and/or the petitioners' personal participation in the CBI enquiry is of utmost necessity at the present juncture.
In the present case, the respondent no. 2-bank has brought in unwarranted and unsupported comparison of the petitioners to other cases of infamous fraudsters, without there being any semblance between the attending circumstances of the present case with the cases of the said persons.
As revealed by the LoC and even the affidavits-in-opposition of the respondent no. 2, no cogent reason has been shown for the request of the LoC. Even the respondent-authorities acted in an unlawful manner in blindly issuing the LoC without even ascertaining whether the request by the respondent no. 2 revealed any exceptional case as envisaged in the amended Office Memorandum No. 25016/31/2010-Imm dated October 27, 2010. It is incumbent upon the issuing authority of the LoC to ascertain at least whether the grounds disclosed in the LoC and/or the request for LoC fall within the four corners of the exceptional cases as defined in the Office Memorandum - the LoC dated February 29, 2020 issued against the petitioner was unlawful and de hors the relevant provisions and the Office Memorandum dated October 27, 2010 (as amended). Thus, the LoC cannot stand judicial scrutiny under Article 226 of the Constitution of India.
Application allowed.
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2021 (12) TMI 1384 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- It is an admitted fact that Rs. 32,43,000/- was paid as an advance to the Corporate Debtor by the Operational Creditor. This deposit is towards the advance licence fee, It is also an admitted fact that by filing this application, the Petitioner has claimed that since the amount was not refunded, therefore, there is @ default in payment of the amount, which comes under the definition of the Operational Debt.
Pre-existing dispute or not - contention of the Respondent is that there is pre-existing dispute which the respondent has raised by issuance of the legal notice under Section 138 NI Act - HELD THAT:- The issuance of the N.LA legal notice under NI, Act, cannot be treated as dispute. Therefore, there are no force in the contention raised on behalf of the Respondent that there is a preexisting dispute. It is further noticed that the application filed by the applicant under Section 9 is complete, demand notice was duly delivered and the amount claimed in Part-IV has not been paid as yet.
There is no payment of unpaid operational debt or the invoices, notice for payment to the Corporate Debtor has been duly delivered by the Operational Creditor and no notice of dispute has been received by the Operational Creditor or there is no record of dispute - the applicant has fulfilled all the criteria as required under Section 9 (5) (i) of the IBC.
Petition admitted - moratorium declared.
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2021 (12) TMI 1381 - NATIONAL COMPANY LAW TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Seeking participation in e-auction - Section 60(5) of the IBC, read with Rule 11 of the IBC - HELD THAT:- The tender document clearly specified the eligibility criteria at Clause 1.15, stating that the Individual/Partnership firm, HUF, LLP or any company, which is three years old with Turnover of Rs. 20.00 Cr. and Net Worth of Rs. 03.00 Cr. for each set of Land & Building. It clearly states that no such condition will apply to plant and machinery and other moveable assets. This eligibility criteria according to the Liquidator has been fixed on the basis of the minutes of the meeting held by the Stakeholders Consultation Committee (SCC), which is also based on in the documents relied by the applicant namely Discussion Paper.
Hon'ble Appellate Tribunal and higher forums have been repeatedly requesting this Tribunal to take up cases on priority basis, where several home buyers, individual companies and IBC proceedings require time of the Tribunal but this applicant chooses to file an application of this nature, knowing the consequences and wants the luxury of being heard by this Tribunal at length. The application therefore requires to be rejected with proportionate cost for pursuing such a claim and making such untenable plea before this Tribunal which is likely to stall the auction proceedings to be held at 03:00 P.M. today.
Application dismissed.
The pre-bid qualification is the eligibility criteria of the bidders, as specified by the Stakeholders Consultation Committee, which is binding on the Liquidator. The faint argument of Mr. Rakesh Kumar, Ld. Counsel for the applicant, that pre-bid qualification will not bind the bidders, is totally misconceived because in all these cases the eligibility criteria of bidders is an essential component for bidding process, otherwise, it will lead to all and sundry participating in the bid process, which will only jeopardise the Liquidator's endeavour to maximise the value of the asset of the corporate debtor in liquidation -
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2021 (12) TMI 1380 - NATIONAL COMPANY LAW TRIBUNAL, JAIPUR
Service of notice - HELD THAT:- Issue notice to the Respondent/Corporate Debtor. Ld. Counsel for the petitioner/Financial Creditor shall collect the notice from the Registry and send the same together with complete paper book and copy of this order immediately to the Respondent/Corporate Debtor at its address by speed post and file affidavit of service along with copy of postal receipt and tracking report within two weeks.
List the matter on 17.02.2022.
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2021 (12) TMI 1375 - NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH
Preferential Transactions - Undervalued Transactions - Fraudulent Trading - Loan repaid to the director during the FY 2017-18, is in preference to trade payables statutory dues and salary to staff, during that year - amount paid to Mrs. Revathi Radhakrishnan, wife of suspended managing director, on 01st July 2018 as loan to be repaid to the Corporate Debtor with interest and cost thereof - settlement of interest and cost of the balance outstanding with respect to the SMS Server Maintenance charges of Rs. 90,00,000/-, which is still pending to be received from this subsidiary company, subject to the Application filed with NCLT, Kochi Bench regarding the recoverability of Outstanding Debtors of the Corporate Debtor - restoration of position as it existed before such transaction as if the transaction had not been entered into and protecting the interests of persons who are victims of such transactions.
HELD THAT:- The transactions in question were preferential, undervalued and fraudulent within the meaning of Sections 43, 45 and 66 of the Code as suspicious and vulnerable, firstly, Rs. 42,50,397 repaid to the director during the F.Y. 2017-18, is in preference to trade payables. Secondly, Rs. 6,28,000 paid to Mrs. Revathy Radhakrishnan Director of the Corporate Debtor. Thirdly, an amount of Rs. 90,00,000 is receivable from Sabkaa Payments Limited.
Looking at the broad features of Section 43 of the Code, it is noticed that as per Sub-Section (1) thereof, when the liquidator or the resolution professional, as the case may be, is of the opinion that the Corporate Debtor has, at a relevant time, given a preference in such transactions and in such manner as specified in Sub-Section (2), to any person/persons as referred to in sub-Section (4), he is required to apply to the adjudicating authority for avoidance of preferential transactions and for one or more of the orders referred to in Section 44. If twin conditions specified in Section 43(2) are satisfied, the transaction would be deemed to be of preference - The relevant time is reckoned, as per Section 43(4) of the Code. in two ways: (a) if the preferences given to a related party (other than an employee), the relevant time is a period of two years preceding the insolvency commencement date; and (b) if the preference is given to a person other than a related party, the relevant time is a period of one year preceding such commencement date. In other words, for a transaction to fall within the mischief sought to be remedied by Sections 43 and 44 of the Code, it ought to be a preferential one answering to the requirements of Section 43(2)(d) and the preference ought to have been given at a relevant time, as specified in Section 43(4).
It appears from the records that on account of complexity in the transaction of the Corporate Debtor, Liquidator has appointed Mr. Vibin Vincent, Chartered Accountant in accordance with Regulation 7 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations 2016 to conduct Transaction and Forensic Audit to identify the preferential, undervalued, fraudulent and extortionate transactions - This Tribunal is of the opinion that the concept of avoidance is essentially premised on fairness and equity, when a company is on the brink of insolvency, paying off one creditor may be detrimental to the interests of the other creditors as it would result in a diminution of total assets available for distribution to other creditors.
After conducting a Transaction Audit and Forensic Audit by Mr. Vibin Vincent, Chartered Accountant, he has reported that based on his analysis of Audited Financial Statements, various bank statements, and other explanations he has found preferential transaction of an amount of Rs. 1,38,78,397/- during the relevant period - this amount should be returned to the Liquidator for distributing among the stakeholders. We direct Mr. Reji Sivankutty and Mrs. Revathy Radhakrishnan to return this amount to the Liquidator within two weeks from the date of receipt of this order. With regard to the payment made by the Sabkaa Payments Limited (subsidiary Company), since they have not been made party to the proceedings, this Tribunal cannot direct them to return the money.
Since, the Liquidator has already filed a dissolution application, he shall take immediate steps to recover the amount from the suspended Managing Director/Director and a report submitted before this Tribunal as to how he has distributed the amount to the stakeholders, immediately after two weeks.
Application disposed off.
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2021 (12) TMI 1374 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI
Sham and fraudulent transactions, therefore null and void - Contribution to the assets of the Corporate Debtor in terms of Section 66 of the Code by reimbursing/refunding the amount with an interest @ 12% - direction to erstwhile/suspended board of Directors i.e. Non-Applicants/Respondent Nos. 15 to 20, to provide the details and addresses of the independent parties - Section 68, 69, 70 of IBC - HELD THAT:- After the initiation of CIRP in terms of Section 14(1), all proceedings, the institution of suit or continuation of pending suits against the corporate debtor shall remain stay during the Moratorium. Similarly in terms of Section 33(5) when a liquidation order is passed no suit or other legal proceeding shall be instituted by or against the Corporate Debtor. Of course, it is subject to the provision contained in Section 52 of the IBC - A bare perusal of the provision shows that the exception referred to in Section 32A is not applicable in case of a promoter or in the management or control of the corporate debtor or a related party of such a person.
Though the proceeding under Section 66 shall not be continued against the respondent No. 1, as the respondent No. 1 is under liquidation but the promoters, the persons in the management/control of the Corporate Debtor or a related party of such person are still liable under Section 66 of the IBC.
There is no material produced on behalf of the respondents on the record, which controvert the pleadings of the applicant We further notice that the prayer of the applicant is based upon the Transaction Audit conducted by the Chartered Accountant for the period from 01.03.2013 (date of Incorporation of the Corporate Debtor) to 21.10.2019 (date of order of Initiation of CIRP against the Corporate Debtor).
It is observed that so far the preferential transactions under section 43, avoidance of undervalued transaction under section 45 and section 50 are concerned, in the absence of the relevant documents and information, the Auditor has shown their inability to comment on these transactions - A perusal of the provision shows that if during the corporate insolvency resolution process or liquidation process, it is found that any business of the corporate debtor has been carried out on with intent to defraud creditors of the corporate debtor or for any fraudulent purpose the Adjudicating Authority may on the application of the resolution professional or liquidator as the case may be pass an order.
The respondents No. 2 to 21, the suspended board of directors of the corporate debtor and other related persons were carrying on business with intent to defraud the creditors of the corporate debtor or with fraudulent purpose and accordingly, they misappropriated Rs. 2687.27 Lakhs and diverted to their own use with intent to defraud the creditors. Therefore, they are liable to make such contribution to the assets of the corporate debtor - the Respondents number 2 to 21 are directed to make contribution of Rs. 2687.27 Lakhs jointly or severely to the assets of the corporate debtor within a period of maximum 02 months from the date of this order. And if they fail to pay the aforesaid amount within the prescribed period, then same shall be realised from their property/properties.
The present application is hereby allowed.
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2021 (12) TMI 1372 - NATIONAL COMPANY LAW TRIBUNAL, DIVISION BENCH, CHENNAI
Seeking direction to Resolution Professional to make provision in the information memorandum and corresponding resolution plan - HELD THAT:- The EPFO Department has not followed the due process as prescribed under the IBC, 2016. The Supreme Court in the matter of PK. RAMACHANDRAN VERSUS STATE OF KERALA & ANR. [1997 (9) TMI 598 - SUPREME COURT] has held that an essential pre requisite of exercising discretion to condone the delay is that the Court must record its satisfaction that the explanation of delay was either reasonable or satisfactory. Further, in the present case the Applicant is not even aware whether the Company is under Liquidation or under the CIRP. In any case, the insurmountable delay of nearly 936 days cannot be condoned at this belated stage.
Application dismissed.
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2021 (12) TMI 1367 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Maintainability of appeal - hearing of the matter - HELD THAT:- As the hearing has commenced before the Ld. NCLT, Cuttack Bench and as has been listed as part-heard on 06.01.2022, this instant Appeal is not maintainable and the Appeal deserves to be dismissed.
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2021 (12) TMI 1365 - DELHI HIGH COURT
Rejection of proposal for a One Time Settlement (OTS) - HELD THAT:- The petitioner has not placed on record any policy in terms of which its OTS claim was to be considered by the Bank. At Mr. Chandhiok’s request, two weeks’ time is granted for filing of additional affidavit in this regard.
List on 18.01.2022.
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2021 (12) TMI 1361 - NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD
Approval of resolution plan - section 30(6) read with section 31 and section 60(5) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 39(4) of The Insolvency and Bankruptcy Board of India (Insolvency Process of Corporate Persons) Regulations, 2016 - HELD THAT:- The Resolution Plan filed with the Application meets the requirements of Section 30(2) of IB Code, 2016 and Regulations 37, 38, 38(1A) and 39 (4) of IBBI (CIRP) Regulations, 2016. An affidavit under section 29A has also been filed by the Resolution Applicant. The Resolution Professional has also certified that the Resolution Plan' approved by the CoC does not contravene any of the provisions of the law for the time being in force. The Compliance Certificate is placed on record. The Resolution Plan' has been approved by the CoC with a 95.23% voting share. It is satisfying that Resolution Plan is in compliance with all relevant provisions of the IB Code 2016, and CIRP Regulations.
The Resolution Plan is hereby approved, which shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors, and other stakeholders involved in the Resolution Plan including Resolution Applicant - Application allowed.
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2021 (12) TMI 1358 - NATIONAL COMPANY LAW TRIBUNAL ALLAHABAD
Seeking amendment in final resolution plan - seeking to uncaps the CIRP costs on conditions stated therein - seeking to reduce term of the plan from 180 days to 90 days - HELD THAT:- The CIRP period will come to end on 06.01.2022 and a decision on the resolution plans will have to be taken first by the CoC and, thereafter by this Adjudicating Authority.
The ends of justice will be met if it is directed that the applicant herein to place the affidavits at Page Nos. 290 to 298 alongwith the covering letter addressed to the sole member of the CoC for consideration. Since disturb level playing field is not intended to be disturbed, the other resolution applicants whose plans are also being considered will also be permitted to place any modification in their submitted resolution plan before the CoC for its consideration. Such modifications shall be communicated to the CoC, no later than 48 hours from now.
Application disposed off.
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