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Insolvency and Bankruptcy - Case Laws
Showing 141 to 148 of 148 Records
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2021 (1) TMI 111
Dissolution of the Corporate Person through voluntary liquidation - Section 59(8) of the I&B Code, 2016 - HELD THAT:- The Applicant Company had not conducted any business or operations for quite some time, the scope of business that the Company was expecting from its parent Company had reduced and therefore it was no longer viable to run the business and that the Board of Directors upon discussions, approved the proposal to voluntarily liquidate the Company. The Liquidator has complied with all the conditions and procedural requirements as specified under various provisions of Section 59 of the Insolvency and Bankruptcy Code, 2016 and of the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017, before initiating Voluntary Liquidation Process of the Corporate Person, and the due Liquidation process is completed. Thus, the Petition / Application deserves to be allowed, as prayed for.
The Corporate Person, M/s. Flocare Labs India Private Limited, is hereby dissolved, with immediate effect - Application disposed off.
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2021 (1) TMI 110
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - Financial Creditor or not - existence of debt and dispute or not - HELD THAT:- The Applicant has filed the present Application for the alleged breach of Share Purchase Agreement dated 21.11.2012. Under the agreement the amount of ₹ 30,00,00,000/- was agreed to be paid by the Financial Creditor to Corporate Debtor for acquiring the Company. On the above said date an addendum to the agreement was also executed wherein the Financial Creditor agreed to make payment to the creditors of the Corporate Debtor. On 27.11.2012 the Corporate Debtor issued a letter requesting to hand over an advance amount of ₹ 1,00,00,000 to Dr. J. J R Justin. Thereafter on 05.09.2014 and 17.03.2015 Financial Creditor issued letter agreeing to refund of the advance amount.
It can be seen that the Corporate Debtor acknowledged the debt of the Financial Creditor lastly on 28.11.2018. Hence, the instant application filed under Section 7(4) of the I&B Code on 21.01.2020 is not barred by limitation -
Objection of the Corporate Debtor regarding the validity of Share Purchase Agreement due to non -registration is not under our jurisdiction. Hence, the Tribunal need not delve into that issue. Further, the objection of the Corporate Debtor regarding there being no common seal of the company and hence the said agreement is invalid document, even assuming without a common seal of the company the Managing Directors agreed into an agreement, the Company is liable for the acts committed by its directors and is bound to honour the agreement entered by the Directors on behalf of the Company.
This Application is filed by the applicant for alleged breach of Share Purchase Agreement dated 21.11.2012. Corporate Debtor failed to honour the share purchase Agreement, and no payment was made - ince the present debt arises out of the Share Purchase agreement dated 21.11.2012, the said amount is a debt disbursed against the consideration for advance payment as per the agreement and hence is covered under the definition of financial debt and Applicant will be treated as Financial Creditor.
Application on behalf of Financial Creditor/ Applicant filed U/S 7 of the I& B Code 2016 for initiation of Corporate Insolvency Resolution Process is admitted - the order of moratorium u/s 14 shall have effect from the date of this order till the completion of corporate insolvency resolution process or until this Bench approves the resolution plan under Sub Section (1) of Section 31 or passes an order for liquidation of Corporate Debtor under Section 33.
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2021 (1) TMI 109
Seeking termination of Insolvency Resolution Process / proceedings initiated - section 9 of the Insolvency and Bankruptcy Code 2016 - HELD THAT:- Bare perusal of the provisions shows that Section 12A is inserted by the amendment dated 06.06.2018 under which an application which was admitted under Section 7, 9 or 10 can be withdrawn and regulation 30A, which has been amended recently with effect from 25.07.2019, after the decision of Swiss Ribbons, which provides how the withdrawal applications filed under Section 12A can be entertained by the Adjudicating Authority while considering the prayer of withdrawal of applications, which have been admitted under Section 7, 9 or 10 - Bare perusal of the amended provision made in the regulation 30A shows that there are two circumstances under which withdrawal is permissible. One is before the admission of the application under Section 7, 9 or 10 and before the constitution of COC and second one is after admission of the application under Section 7, 9 or 10 and after constitution of the COC and appointment of IRP. The present application herein was admitted on 13.02.2020 and IRP was appointed and the Operational Creditor was also directed to deposit of ₹ 2 lacs to meet the immediate expense of the IRP but here in place of IRP, the Suspended Board of Directors have filed the present application under Rule 11 of the NCLT Rules, 2016.
In the present case, even the application has not been filed by the Operational Creditor rather it has been filed by the Suspended Board of Directors of the Corporate Debtor.
There is a specific provision under Section 12A for withdrawal of application admitted U/S 7, 9 & 10 of IB Code and the procedures are prescribed under regulation 30A for withdrawal of applications after the admission of application and before and after the Constitution of the COC, therefore, we can say that before the constitution of the COC the application must be filed by the applicant through the IRP, in view of Regulation 30A (1)(a) and application under Sub Rule (1) shall be made in Form-FA accompanied with bank guarantee and when such application is filed under Clause (a) of Regulation (1) then the IRP is required to submit the application to the Adjudicating Authority within 3 days of its receipt but in this case, the Operational creditor has not filed the application in terms of Regulation 30A rather it has been filed by the Suspended Board of Directors of the Corporate Debtor.
Application dismissed.
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2021 (1) TMI 108
Assignment of Debt - Seeking directions to Resolution Professional / 1st Respondent herein who is Resolution Professional to admit claim - Section 60 (5) of Insolvency & Bankruptcy Code - HELD THAT:- The Learned Counsel for Applicant would contend that the Applicant is assignee of the debt which was payable to the 2nd Respondent, the Assignor by the Corporate Debtor. The Learned Counsel would contend, there is an Assignment Agreement duly executed by the Assignor/the second Respondent herein namely, SREI Infrastructure Finance Limited. The Learned Counsel would contend, the debt transferred under Assignment Agreement is permitted to be recognised. In this connection the Learned Counsel for Applicant relied on Regulation 28 of CIRP Regulations. The Learned Counsel contended, the 2nd Respondent transferred / assigned the debt of ₹ 60,47,38,233/- on 18.05.2020. The Learned Counsel contended, soon after assigning the debt in favour of Applicant by the Assignor, the Applicant/Assignee filed claim before the 1st Respondent/ Resolution Professional of the Corporate Debtor. The Learned Counsel contended, the Resolution Professional being administrator and facilitator is bound to accept the claim transferred in favour of Applicant, declaring him as Financial Creditor and include in the CoC for the Corporate Debtor. The Learned Counsel contended, the Resolution Professional has not admitted the claim raising unnecessary objections and acted as adjudicator, which he is not empowered to do so. The Learned Counsel contended, the Resolution Professional rejected the claim by adjudicating the claim filed by the Applicant, as if the same cannot be admitted.
It is true the debt of ₹ 60,47,38,233/- was assigned to the Applicant with the underlying securities which is for a sum of ₹ 10 lakhs. I agree with the contention of the Assignor that the inadequacy of consideration is not by itself a ground to entertain a doubt about the transaction. There are other circumstances pointed out by the Resolution Professional. The contention of the Resolution Professional that he has relied on Section 5 (7) of the Code and decided the claim on administrative side. The Resolution Professional would contend, the Applicant is a non-financial institution and non-ARC. How this Applicant being a non financial institution and non-ARC is entitled to purchase the debt with underlying immovable and movable securities from Respondent No.2 which is a Non-Banking financial institution and holding net worth of ₹ 2987.08 crores as on 31.03.2018 can assign its debts with underlying immovable and movable securities to non-financial institution and non-ARC, the Applicant herein, whose paid up capital is just ₹ 47.63 lakhs and how the debt of ₹ 60.47 crores was assigned for a sum of ₹ 10 lakhs. Certainly, this is an important circumstance which ought not to be ignored while assessing genuiness of this transaction.
The question is whether claim can be admitted basing on the un-registered document when it was filed before the Resolution Professional. The unregistered documents cannot be taken into account for admission of the claim. The document must have been registered on the date on which the claim is made. No doubt for registration, four months are available under Section 23 of the Registration Act. The question is whether Assignment Agreement was registered on the date on which claim was made before the Resolution Professional. The documents must have been registered by the date the claim was made before the Resolution Professional. So when claim was made, the documents was not registered. Therefore, the document cannot be looked into. The Resolution Professional had not committed any error by not relying the unregistered Assignment Agreement because it was not registered and claim could not be admitted.
The Resolution Professional has rightly observed a serious suspicious circumstance in the alleged transaction. The Applicant is a non-financial institution and non-ARC, then how the Applicant purchased the debt with underlying movable and immovable securities from the Assignor which is an NBFC and holding net-worth of ₹ 2987.08 crores as on 31.03.2018, which can assign its debts with underlying immovable and movable security to a non-financial institution and non-ARC, the Applicant herein, whose paid up capital is ₹ 47.63 lakhs. This certainly is an important circumstance which cannot be ignored and it casts a serious doubt on the transaction - The debt is stated to have been transferred to the Applicant, the Assignee. Now the prayer by the Applicant is to recognise him as financial creditor and further to include it in the CoC. The Resolution Professional has taken a right decision that Assignment Agreement is not registered. Therefore, he has not recognised the claim of the Applicant basing on the unregistered Assignment Agreement. Secondly, the Applicant cannot be included in the CoC even if transfer is treated as a valid transfer since the Assignee got the debt transferred from the related party. The Assignee is stepping into the shoes of the Assignor. Therefore, the Applicant cannot be included in the CoC having acquired the debt by transfer from the related party to the Corporate Debtor. The transaction on the face of it appear to be not a genuine transaction with regard to the transfer of debt in favour of Assignee. Already Resolution Professional recognised the debt of the Assignor and only a part of debt was not admitted because of pending reconciliation.
Thus, there is no error committed by the Resolution Professional for not accepting transfer and not including the Applicant in the CoC. The Assignor continued to be a financial creditor of the Corporate Debtor. If transfer is not recognised by the Resolution Professional, the status of the Assignor/2nd Respondent herein, does not change and Assignor continues to be financial creditor of the Corporate Debtor - application dismissed.
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2021 (1) TMI 107
Seeking grant of injunction on the holding of the EGM - power to appoint Directors and the power to regulate them by passing a resolution for removal - HELD THAT:- There were several prayers by the applicants in this matter. Representation was made by the counsels on behalf of Respondents 07 and 09. Accordingly, this Bench makes the following observations:
1. The prayer of the applicants that this bench should grant injunction on the holding of the EGM cannot be granted because it is not in the jurisdiction of the courts to grant such relief. Therefore, we do not intend to stop the EGM which is going to be held tomorrow i.e. on 07.08.2020.
2. Also, the prayer sought by the applicant that the director should not be removed can also not be granted as the Companies Act itself makes it clear that the power to remove the director is inherent and is a corporate decision which is correctly stated by the counsel for the Respondent No. 07. The applicants also mention their fear that they may be removed in the meeting scheduled for tomorrow. But we would like to mention here that even if this happens, they can at any time make representation for restoration to that effect according to the provisions of law.
Application dismissed.
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2021 (1) TMI 106
Liquidation of the Corporate Debtor - section 33 & 34 of the Insolvency and Bankruptcy Code, 2016 - Seeking appointment of the Liquidator - HELD THAT:- It is found that no viable Resolution Plan was received and the Corporate Debtor does not possess significant assets. Also, the bank balance available in the Bank account of the Corporate Debtor was insignificant/inadequate to pay the fees/ remuneration of professionals. Therefore, the CoC has resolved for liquidation of the Corporate Debtor vide its Fourth meeting dated 19.03.2020. It is also to be noted that this Adjudicating Authority has no jurisdiction to interfere in the commercial wisdom of the CoC as observed in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT].
The application so filed by the RP under Section 33 & 34 of the IB Code, 2016 is allowed and the Adjudicating Authority passes an order for initiation of liquidation of the Corporate Debtor viz., Aditya Exim Limited. The RP i.e. Shri Gordhanbhai Ratnabhai Godhani, shall act as the Liquidator for the purpose of liquidation of the Corporate Debtor - moratorium declared under Section 14 of the IB Code shall cease to have effect from the date of the order of liquidation.
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2021 (1) TMI 105
Seeking exclusion of 54 days from CIRP - permission to Resolution Professional to call for CoC meetings to deliberate and vote on the Resolution Plan received from M/s. Earthin Projects Ltd and file necessary application/memos before this Tribunal within 60 days from the date of orders of this Tribunal - HELD THAT:- It is observed that after the initiation of CIRP, a period of 69 days was lost due to various reasons as stated in the application out of which a period of 15 days was already excluded by this Adjudicating Authority on various dates i.e., 27.01.2020 and 04.02.2020, now that the applicant has sought for exclusion of remaining 54 days from CIRP.
It is pertinent to note that the judgment of the Hon'ble Supreme Court has held in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta & Ors. [2019 (11) TMI 731 - SUPREME COURT] where it was held that while leaving the provision otherwise intact, we strike down the work 'mandatorily' as being manifestly arbitrary under Article 14 of the Constitution of India and as being an excessive and unreasonable restriction on the litigant's right to carry on business under Article 19(l)(g) of the Constitution. The effect of this declaration is that ordinarily the time taken in relation to the corporate resolution process of the corporate debtor must be completed within the outer limit of 330 days from the insolvency commencement date, including extensions and the time taken in legal proceedings.
Keeping the guidance of the Hon'ble Supreme Court in view and considering the submissions, facts and circumstances of case, interest envisaged by the Prospective Resolution Applicant for resolution of Corporate Debtor and in view of the decision of CoC through email, as well as the economic scenario emerging due to COVID-19 pandemic and it's fall out, this Adjudicating Authority observes that exclusion of time period enabling for completion of CIRP would be in the interest of all stakeholders, to allow the completion of CIRP rather than going for liquidation of the Corporate Debtor which should only be initiated as a last resort - exclusion of period of another 54 days from calculation of CIRP period is approved.
This exclusion is granted on having considered the steps already been taken by the RP, approval by the CoC with 74.05% acceptance through email and the current stage of CIRP in the case of the present Corporate Debtor i.e.. M/s. Indu Projects Limited - application disposed off.
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2021 (1) TMI 3
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- On a perusal of the material brought on record it is clear that this is a fit case for dismissal. The Corporate debtor denies the debt. The copy of the Memorandum of Agreement filed by the Petitioner shows that it has no date on which it was stated to have been agreed to. It also does not have the signature of the parties to the agreement. The witness column is blank. The same therefore cannot be relied upon by the Petitioner. No right to payment or debt can arise in the absence of a valid agreement. The notice issued to the Respondent by the Petitioner also states that the Agreement was entered into in the month of March 2016, and provides no specific details or evidence of the agreement having been signed or amounts spent on purchase and supply of kitchen plant and machinery etc. for the Respondent.
Hence in the absence of any valid agreement, any evidence regarding the expenditure stated to have been incurred out of his own funds, or sums due to him as an investor or as share in profits as claimed in the Petition, and the Respondent's denial of all the averments made by the Petitioner, with no counter by the Petitioner in spite of sufficient opportunity, we have no option but to dismiss the petition - Petition dismissed.
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