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Insolvency and Bankruptcy - Case Laws
Showing 41 to 60 of 148 Records
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2021 (1) TMI 1148
Seeking to realize the third party guarantee at the earliest - seeking to remit the CIRP Cost/ Liquidation Cost to the Liquidator - seeking to foreclose the Fixed Deposits as per the Liquidator’s Letter and remit the proceeds of fixed deposits to Liquidation Bank Account and to pass suitable Orders for early dissolution of the Corporate Debtor - HELD THAT:- The facts as mentioned justify dissolution of the Company rather than to continue Corporate Debtor under Liquidation process, under the extant provisions of Code and the Rules there under. Since nothing remains to be realised, the liquidation process under the provisions of Code is deemed to have been completed under Chapter Ill of Part Il of Code. Therefore, it would be just and proper for the Adjudicating Authority to dissolve the Company, as prayed for by the Liquidator.
The Applicant without impleading necessary parties, cannot seek any directions against them and thus the Application is to be rejected on this ground alone. In addition to this, as rightly stated by Karnataka Bank Ltd., (Financial Creditor), the Applicant is not entitled for any additional fee as claimed. The Applicant got adequate fee in comparison to the work he has done.
It is hereby dissolved the Corporate Debtor namely, M/s. Bunt Solar India Pvt. Ltd., with immediate effect - Application allowed.
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2021 (1) TMI 1147
Maintainability of application - initiation of CIRP - Corporate Debtor has defaulted in paying dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The Financial Creditor has established the debt and default through various documents filed along with the application. The application is, therefore, liable to be admitted
Petition admitted - moratorium declared.
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2021 (1) TMI 1137
Approval of Scheme of Amalgamation - sections 230 to 232 and other relevant provisions of the Companies Act, 2013 - HELD THAT:- Various directions regarding issuance of notices issued - Applicant Companies shall file affidavit with the Registry in compliance to the directions given in this Order have been duly complied with.
Application disposed off.
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2021 (1) TMI 1133
Approval of Resolution Plan of the Corporate Debtor as approved by Committee of Creditors - compliance with all the requirements of Section 30(2) of IBC, 2016 and r.w. relevant Regulations - Resolution Plan filed before the expiry period of CIRP - HELD THAT:- The Resolution Plan' filed with the Application meets the requirements of Section 30(2) of I&B Code, 2016 and Regulations 37, 38, 38 (1A) and 39 (4) of IBBI (CIRP) Regulations, 2016. The 'Resolution Plan' is also not in contravention of any of the provisions of Section 29A. The RP has also certified that the Resolution Plan t 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 100% voting share.
The Resolution Plan contains various reliefs and concessions as per annexure -4 of the said Resolution Plan. Certain reliefs have been granted specifically. Hence, general exemption granted now is in addition to those reliefs. The prayers as regard to various reliefs/ concessions sought by the Resolution Applicant is approved subject to condition that such grant/ approval is in accordance with the scheme and provisions of Insolvency & Bankruptcy Code, 2016 and CIRP Regulations made there-under.
The Resolution Applicant of the corporate debtor will have all liberty to approach or may approach the concerned Statutory/ Competent Authority for any concession, waiver or exemption as per the applicable laws - the resolution plan is approved - approved 'Resolution Plan' shall become effective from the date of passing of this order - application allowed.
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2021 (1) TMI 1131
Admission of application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 is set aside - CoC not constituted - rejection on the ground that a settlement has been arrived at between the Respondent No.1- Creditor and the Corporate Debtor - HELD THAT:- Keeping in view the dictum of the Hon’ble Apex Court in “Swiss Ribbons and Ors. V. Union of India & Ors [2019 (1) TMI 1508 - SUPREME COURT], the Corporate Debtor may avail the opportunity of seeking exit from Corporate Insolvency Resolution Process (CIRP) at the stage of pre-constitution of COC but whether the same takes care of interest of all the stakeholders involved and can be permitted is a decision to be taken by the Adjudicating Authority on the peculiar facts of the case. It would, therefore, be appropriate for the Appellant to approach the Adjudicating Authority to seek exit from CIRP by filing the terms of settlement and the Adjudicating Authority will have to pass the appropriate order.
Since it is submitted by learned counsel for the Appellant that the Adjudicating Authority could not be accessed due to holidays it is deemed appropriate to dispose off this appeal with direction to Appellant to approach the Adjudicating Authority for seeking exit after filing Settlement Terms before it. To enable the Appellant to seek such exit, we direct that the COC shall not be constituted for one week from today.
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2021 (1) TMI 1125
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- There is no dispute that the Corporate Debtor has availed various financial facilities from the Financial Creditor and its former associate Banks, now merged into the SBI. Having availed such financial facilities from public sector banks, the Corporate Debtor cannot avoid repayment merely relying on technicalities. While harping on the provisions of Limitation Act, the Corporate Debtor itself has filed Counter only on 27.02.2020, in a petition filed on 06.09.2019. Time for filing Counter was sought on different occasions, viz. 05.12.2019, 23.01.2020 and 07.02.2020.
Apart from the technical issues raised, the Corporate Debtor did not dispute existence of debt and default, albeit it may differ dates of default and so on. Public money cannot be squandered away by the Corporate Debtor by finding loopholes.
Time Limitation - HELD THAT:- It is observed that the OTS proposal was also submitted by the Corporate Debtor and the Financial Creditors have met on 07.02.2020 to discuss about such OTS proposal. The above correspondence and the decrees passed by the DRT in the instant case amply prove that there is financial debt which was due. Thus, by accepting liability vide their letter dated 29.01.2020, agreeing to repay the debt, the Corporate Debtor now cannot take a stand that the debt is barred by limitation. Acknowledgement of debt and agreeing to repay the same amounts to liability and it automatically extends the limitation period.
It is not in dispute that the Financial Creditor disbursed various types of loans from time to time and there is default. Other contentions raised by the learned counsel for the Corporate Debtor cannot be entertained since the Financial Creditor is able to establish the debt and default. Therefore, the petition is to be admitted against the Corporate Debtor. After going through the documents filed by the petitioner we are of the view that the petition is liable to be admitted against the Corporate Debtor. The petition is accordingly admitted.
Petition admitted - moratorium declared.
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2021 (1) TMI 1120
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - time limitation - account of Corporate Debtor was classified as NPA - whether appeal was barred by limitation as default occurred in the year 2013? - HELD THAT:- The account of Corporate Debtor was classified as NPA on 17thJune, 2013. The Corporate Insolvency Resolution Process (CIRP) was triggered by the Financial Creditor by filing application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) on 1st April, 2019. It is by now well settled by a catena of judicial pronouncements from the Hon’ble Apex Court as also by this Appellate Tribunal that the application under Section 7 is governed by Article 137 of the Limitation Act providing for limitation period of three years which has to be reckoned from the date of default viz. the date on which the Account of Corporate Debtor was classified as NPA.
The impugned order admitting application under Section 7 filed by Respondent No.1- (Financial Creditor) in terms of the impugned order dated 4th February, 2020 cannot be sustained - Appeal allowed.
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2021 (1) TMI 1111
Date of removal of disqualification of Director - whether the Corporate Debtor has complied with the conditions stipulated in the settlement agreement produced before this Tribunal? - HELD THAT:- It is true that the IBA has been disposed of on the basis of settlement arrived between the parties stating that they have settled the matter stating that on 26.8.2020 settlement has been arrived for a total sum of ₹ 2,25,00,000/- as full and final settlement of the entire claim between the Corporate Debtor M/s Sree Bhadra Parks and Resorts Limited on the terms mentioned in the settlement agreement. When a settlement has been arrived between the parties, it is duty bound by the Corporate Debtor to make good the payments proposed in that settlement. They cannot go back making various allegations including maintainability of the IBA after making default in the payment agreed to between the parties.
The contention regarding the application is not maintainable as the order stipulates for filing a fresh application cannot be accepted because merely on technicalities the Corporate Debtor cannot wash away their hands from complying with the conditions stipulated in the final order passed by this Tribunal - Application allowed.
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2021 (1) TMI 1059
Maintainability of application - initiation of CIRP - Scope of the term 'Deposit' - Financial Debt under section 5(8)(a) and Section 5(8)(f) of the ‘I&B’ Code - stand of the Appellant is that his claim is that of a ‘Deposit’ and not of a ‘Financial Debt’ was never brought out by either the Respondent or the Adjudicating Authority as such, the Appellant never got an opportunity to respond to the said issue and was shocked by the impugned order - HELD THAT:- It must be borne in mind that a ‘Financial Creditor’ is a person to whom the financial debt is owed. A ‘Financial Creditor’ is a person who has a right to financial debt. A ‘Financial Creditor’ can be either a secured creditor or an unsecured creditor - A ‘Corporate Debtor’ is a person who owes a debt to any person. The term ‘debt’ means a liability or an obligation in respect of a claim due from any person and includes (i) a Financial Debt (ii) An Operational Debt. As a matter of fact, Section 3(6) of the Code speaks of ‘Definition of Claim’ meaning (a) a right to payment, whether or not such right is reduced to judgement, fixed, disputed, undisputed, legal, equitable, secured or unsecured.
It cannot be gainsaid that the term ‘deposit’ includes any receipt of money by a company either as deposit or loan or in any other form by it. Under the Companies (acceptance of deposits) Rules, 2014 the term ‘Deposit’ is defined under Rule 2(1)(c) in an inclusive manner. The meaning of ‘Deposit’ is enlarged by covering receipts of money in any other form. After all, a deposit is something more than a mere loan of money - For invoking the jurisdiction of the Tribunal as per Section 74(2) under the Companies Act, 2013, even a partial failure by the Company to repay the deposit was sufficient. In fact, Section 2(31) of the Companies Act speaks of the meaning of deposit. Also, that the Tribunal has vide discretionary powers regarding the repayment of ‘Deposit’(s) but it must exercise its discretion objectively taking into consideration all the relevant aspects in a conspectus judicial manner. In reality, the distinction between deposit and loan may not be a relevant factor for interpreting the term ‘Deposit’. To put it succinctly, under the new Companies Act, 2013, the definition of the term ‘Deposit’ is of wider amplitude, as opined by this Tribunal.
In view of the fact that the Respondent / Corporate Debtor had accepted certain amounts from the Appellant and credited the interest in a consistent manner against such amounts for a continuous period of five years, as pleaded by the Appellant and also that the ‘Corporate Debtor’ had accepted money from the Appellant against the payment of interest and bearing in mind the payment of interest on the amounts borrowed by the Respondent Company is nothing but a consideration for the time value of money and in as much as the ‘interest’ is the compensation paid by the borrower to the lender for using the lender’s money over a period of time, this Tribunal comes to an inevitable and inescapable conclusion that the Appellant’s status is that of a ‘Financial Creditor’ as per Section 5(7) read with Section 5(8) of the Code and that there is a default in payment of the accepted amounts by the Respondent/CD and in short, the Respondent / Corporate Debtor comes within the purview of the definition of ‘Financial Debt’ - the contra view taken by the Adjudicating Authority in coming to the conclusion that the application filed by the Appellant / Financial Creditor is not maintainable for initiation of Section 7 of the Code is clearly unsustainable in the eye of law, as held by this Tribunal, to prevent an aberration of justice.
Appeal allowed.
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2021 (1) TMI 1058
Approval of Resolution Plan - Seeking extinguishment of demand - Considering the claims not lodged before the approval of the Resolution Plan - HELD THAT:- After the Judgement of the Hon’ble Supreme Court on COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT] on the issue we are of the considered view that the claims filed by the Respondents after the Resolution Plan is approved, is not tenable. Notice of CIRP / Moratorium of the CD was published in the News Paper as per the provisions of the IBC asking the stakeholders to lodge their claims, if any. Hence Prayer made by the Resolution Applicant/CD in this IA No.19 of 2020 [in CPIB No.20/GB/2017] is accepted to the following extent:
(1) Claims of the Respondent not lodged before the approval of the Resolution Plan, including the claims filed on 10.09.2020 for ₹ 12.24,29,371.00 cannot be entertained and hence, the claims made by the Respondent are hereby set aside.
(2) The Resolution Applicant / the Petitioner is hereby directed to strictly implement the Resolution Plan as approved in time without any violation.
(3) The Petitioner is further directed to file a compliance report within 15 days of this order before the Registry stating that the Company has been paying all current statutory dues especially EPF, Income Tax, GST, CGST etc. in time.
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2021 (1) TMI 1031
Direction to Respondent to permit the Advocate, Chartered Accountant, Company Secretary of the Corporate Debtor/ Applicant to attend the meetings of Committee of Creditors - Direction to Respondent to provide the copies of all documents in connection with the CIRP process to the mentioned professionals - HELD THAT:- From Regulation 24 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, it is clear that the Resolution Professional has the power and responsibility to monitor and manage the operations and assets of the enterprise. The professional will manage the resolution process of negotiation to ensure balance of power between the creditors and debtor, in order to protect the rights of all creditors. The professional has to ensure the reduction of asymmetry of information between creditors and debtor in the resolution process.
Section 24 of the Insolvency and Bankruptcy Code, 2016 provides that if there are Financial Creditors to Corporate Debtor, only Financial Creditor can attend and vote in the meeting. Directors and partners can only attend the meeting of Committee but shall not have any right of voting and their absence does not invalidate any of the proceedings, which means that even if they are allowed to attend the meeting of Committee of Creditors, they will be only silent spectators and they have no say on any of the transactions in the proceedings - This Tribunal is of the view that by allowing the Advocate/ CA/ Company Secretary of the Corporate Debtor no purpose will be served. The Corporate Debtor itself is sufficient to provide any of the documents/papers/details sought by the Resolution Professional during the proceedings.
Providing of copies of all documents in connection with the CIRP process to the Corporate Debtor - HELD THAT:- As rightly stated by the Resolution Professional it is the discretion of the Resolution Professional to appoint Accountants, legal and other professionals following the due process as specified by the IBBI under Section 25(2)(d) of Insolvency and Bankruptcy Code, 2016 and that Resolution Professional is not permitted to disclose any information pertaining to the CIRP to any third parties including Advocate/ CA/ Company Secretary this prayer also cannot be granted.
This Tribunal cannot travel beyond the IBC Regulations and pass orders contrary to the Regulations - Application dismissed.
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2021 (1) TMI 981
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - outstanding sum has been claimed at ₹ 11,30,146/- and date of default has been claimed as Financial Year 2018 - HELD THAT:- In case of proceedings under Section 9 of IBC, 2016 or section 8 of IBC 2016 of significant nature. It has been observed by higher judicial forums that requirement of service of notice under Section 8(1) of IBC, 2016 is crucial so that any entity is not put into CIRP in a light manner. Rule 5 (Application to Adjudicating Authority) Rules, 2016 provides that Operational Creditor "shall" deliver to the Corporate Debtor. Demand notice in form-3 or copy of invoice attached with the notice in Form-4. Form No.3 and Form No.4 have been prescribed which provide for submission of all relevant information to the Corporate Debtor alongwith supporting documents so that the Corporate Debtor can raise dispute, if any, under Section 8(2) of IBC, 2016 within 10 days from the receipt of such notice.
In the present case, so-called notice does not contain such details / information nor any documents which are required to be given to the Corporate Debtor alongwith such notice have been attached. In a number of cases, coordinate benches as well as Hon'ble NCLAT has taken a view that such notice is necessarily to be in the prescribed forms and in absence thereof, application filed under Section 9 was liable to be dismissed. As stated earlier, neither specified form has been delivered nor contents of such notice meet the requirements of law - the present application is liable to be dismissed as it is an incurable defect.
Application disposed off.
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2021 (1) TMI 980
Seeking direction to the Respondent, i.e. Bank of India, to release an amount of ₹ 100 Lacs held in the "No Lien Account", for the purpose of Insolvency Resolution Process - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is noted that the Corporate Debtor, to show their commitment and bonafide towards resolution plan (i.e. one time settlement proposal) has furnished a Cheque for ₹ 1 crore to the respondent/ bank on 12.07.2017 along with a letter with a request to keep the proceeds in "No Lien Account" and instructed that the said amount may be adjusted / utilized upon approval of resolution plan (i.e. one time settlement), however, in any case, it should not be adjusted towards interest/ other charges/ principal till then. The company is committed to bring the balance amount to the extent of 10% as per their commitment once approval is accorded by the lead bank.
Before the date of commencement of CIRP, the respondent bank has not adjusted this amount in the loan account of the corporate debtor, whereas it has kept the same in a separate account as instructed by the corporate debtor. It shows that the bank has agreed for no lien to this amount till OTS proposal is approved by the bank. Hence, on initiation of CIRP, the amount kept in a separate account as 'No Lien Account' by the respondent bank is the asset of the corporate debtor and the RP has to deal with the same as per the provisions of the IB Code.
Application allowed.
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2021 (1) TMI 979
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of debt or not - existence of debt and default or not - Time Limitation - HELD THAT:- The date of default is 06.03.2019 and the present application is filed on 16.03.2020. 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 - 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.
It is clear that the default has occurred and the debt is due and payable. Further, the present application has remained uncontroverted with respect to the claim of the applicant. On the contrary, the corporate debtor in its Section 10 application itself admitted the claim of the present applicant of ₹ 3.5 Lakh which is recorded vide order dated 16.12.2020. Hence the application deserves to be admitted and the applicant is entitled to claim the admitted amount which is still outstanding and has remained unpaid till date. Therefore the applicant is admitted.
Application admitted - moratorium declared.
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2021 (1) TMI 978
Seeking relief asking for closure of the liquidation process without dissolving the Corporate Debtor as long as Section 54 of the Code passed by the Parliament is in force - Can such a relief be passed by this Authority by looking at the liquidation Regulations issued with the power conferred upon IBBI under section 240 (Regulation making power) and Section 196 (Powers and Functions of IBBI) of the Code? - HELD THAT:- If the Code is carefully read, it could be ascertained that wherever the Code felt that IBBI assistance is required, it has been specifically stated "as specified by the Board or in such manner as may be specified or prescribed" we must at the cost of repetition reiterate, this clause is indicative of the fact that beyond the procedure inbuilt in the Code, if additional mechanism or paraphernalia is required to accomplish implementation of the statute, there it has been mentioned as "as specified by the Board or in such manner as may be specified or prescribed". The point to remember is, it is for supplementation, not for supplantation.
The purpose and object of the Regulations issued by IBBI is to carry out the provisions of the Code, not for carrying out the purpose of the Code. It is in a way carrying out the provisions of Code will tantamount to carrying out the purpose of maximization of value as well. Here IBBI cannot jump the gun and say it has changed the procedure for maximization of value. As we all know, once the CIRP period is over, CoC will not remain in existence. Exercising commercial wisdom by the CoC has its own limitations. They can decide how much they get from the Resolution plan. The financial creditors converting into stakeholders during liquidation can express their wish in the meetings, but the liquidator is not bound by such decisions - It is explicitly mentioned in sub-section -1 of section 240, Regulations are to sub-serve sections of the Code in implementation.
The delegated legislation shall not overreach Sections - When the dissolution is made explicit, IBBI ought not to have ignored the mandate u/s 54 of the Code. When something is said in preamble, it shall be assumed that a whole gamut of provisions of that enactment have come into existence to fulfill that policy alone. At the time when any Bill is laid before legislature, every clause/provision is weighed to balance the same with preamble of the Bill, if that balance is disturbed by outside agencies after enactment, that too without power, the inbuilt balance will be lost - If any study is made by a recommending agency like the Law Commission or Committee set up to look into the efficacy of the enactment, it will recommend to the legislature. In this process, if any particular provision is found not workable and the result is not in conformity with the purpose and object of the enactment, it has to go back to the maker. Repairing is not the job of Regulating Authority. In fact, the Regulating Authority or Rule Making Authority shall provide a support system for effective implementation of the provisions of the Code, not to travel beyond the line of control.
In section 240 (2) (y) also, IBBI is limited to regulate the manner of evaluating the assets and property of the corporate debtor under clause (c), the manner of selling property in parcels under clause (f), the manner of reporting progress of the liquidation process under clause (n), and the other functions to be performed under clause (o), of sub-section (1) of section 35. Therefore by reading all these, it is nowhere found in the Code that the corporate debtor could be alienated to the purchaser by dispensing with dissolution. If concessions are started providing, there won't be certainty, predictability, uniformity; nobody knows what decision will come tomorrow. This will lead to facelessness and discordancy - Even in Section 240(2)(zk), the regulating power is limited to the period and the manner of distribution of proceeds of sale under sub-section 1 of section 53, if it is seen juxtaposition to Section 53, it only deals with sale of the liquidation assets, it does not speak about sale of the Corporate Debtor, sale of the Corporate Debtor is altogether different from sale of assets. The only power that is given under section 53 is, to convert assets of the Corporate Debtor into sale proceeds, therefore it could not be construed that Section 53 envisages sale of the Corporate Debtor. When section itself has not conferred any right to sale of the Corporate Debtor, where is the question of IBBI setting out a new concept of sale of Corporate Debtor without any support of any of the sections of IBC.
In section 240 (2), regulating power is given to bring in supplementary procedure with regard to the sections mentioned therein, but not to the sections not mentioned in sub-section 2 of section 240. Section 54 is not included in section 240 (2) of the Code In section 54 also, it has not been mentioned "as specified by the Board or in such manner as may be specified or prescribed". When no discretion is given to IBBI to help out in implementation of section 54 of the Code, it should not have given an unsolicited go-by to the dissolution in the case of a business sold as a going concern - This Regulation has been newly inserted on 25-7-2019, simultaneously along with this Regulation, CIRP Regulation 39C was inserted creating a right to CoC for approving a resolution to explore sale of the Corporate Debtor as a going concern under clause (e) of Regulation 32 of Liquidation Regulations in the event the corporate debtor goes into liquidation, on this premise the liquidator shall identify and group the assets and liabilities and ought to be sold as going concern, this RP shall place it before this Adjudicating Authority.
Insolvency and Bankruptcy Code is an embodiment of substantial rights laced with procedural mandates. When procedure itself is part of the enactment, the Regulating Authority cannot rewrite the procedure obliterating the provisions of IBC. Yes, the Regulating authority may bring in subordinate procedure for full implementation of the sections of the Code. What could be liquidated is the assets of the debtor company, this concept of liquidation of assets shall not be construed as inclusion of sale of the company - The procedure is already set out under the Code for rearrangement under insolvency and resolution process thereafter another window under liquidation through sec. 230 of the Companies Act, 2013, therefore there cannot be any other procedure which is militating the procedure set out under the Code.
Application dismissed.
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2021 (1) TMI 977
Seeking stay on the process of finalization of the Approval of the Resolution Plan - seeking direction to Mr. B.C. Ganesh (RIO), who is common witness in all agreements should submit all Bank Statements and Income Tax Returns for last five Financial Years and disclose true identity - HELD THAT:- Since the Applicant has not brought on record any fact or evidence to show that the successful Resolution Applicant falls within any of the categories of the ineligibile persons under Section 29A of the Code, the prayer made for declaring the successful Resolution Applicant as ineligible cannot be acceded to and is therefore negated.The Applicant's prayer for passing an order to consider its Resolution Plan with the consideration for ₹ 27.00 Crores when it was the H1, is against the one of the prembled objectives of the IBC 2016, namely "maximisation of value" of stressed assets for resolving insolvency. In fact, the Applicant itself has been submitting revised Resolution Plans for ₹ 30.20 Cr. on 15.06.2019 and for ₹ 37.21 Cr. on 25.06.2019 respectively. Further, the Applicant also participated in inter se bidding with the successful Resolution Applicant wherein the Applicant itself made a bid for ₹ 42.71 Cr. It withdrew only after the successful Resolution Applicant made a bid for ₹ 42.96Cr. Therefore, seeking a direction to consider it's Resolution Plan for ₹ 27 Cr. at this stage is both unreasonable and against the tenets of IBC 2016. Therefore, this prayer is also negated.
Seeking stay on process of finalization of the approval of the Resolution Plan submitted by the R 7 till the disposal of this IA - HELD THAT:- According to the provisions of IBC, 2016 once a CIRP application is admitted, it is the duty of RP to constitute CoC and thereafter publish Eol, Information Memorandum and evaluation matrix on the basis of decisions taken in CoC meetings. Thereafter, upon receipt of Eol by potential Resolution Applicants, various Resolution plans are examined by the RP and the same are put up before the CoC for deliberations about each of those plans for considering their feasibility and reliability. In this regard, it is pertinent to note here that under the provisions of the Code, the commercial wisdom of the CoC has been given paramount status without any judicial intervention.
In the instant matter, the CoC have approved the Resolution Plan submitted by the successful Resolution Applicant as per their "commercial wisdom" in terms of Section 30(4) and the same is pending before this Adjudicating Authority for determination under Section 31 of the Code - the Applicant's prayer for staying the process of approval/determination of the CoC approved Resolution Plan by this Adjudicating Authority cannot be acceded to.
Application dismissed as not maintainable.
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2021 (1) TMI 976
Approval of Resolution Plan - sections 30(6) and 31 of the I&B Code, 2016 r/w Regulation 39(4) of CIRP Regulations, 2016 - HELD THAT:- It appears that the Resolution Plan dated 26th February, 2020 as duly approved by the Committee of Creditors on 28th February, 2020 for Badami Sugars Limited, submitted by M/s. Sri Sai Priya Sugars Limited, satisfies all the requisite conditions for its approval under section 31(1) of the Code. Details of the fund infusion, and the sources from which the Resolution Applicant shall arrange the same have been provided in the Resolution Plan. The same provides for the creditors in the distribution table filed with the Plan, and provides adequate details of the infusion of funds required as working capital as well as for payment of the debts. Details of projected profits and cash flows have also been provided. Considering also the past experience in similar business and credentials of the Directors and Promoters of the Resolution Applicant, as mentioned in the Resolution Plan, we are satisfied about the viability of the same. The Resolution Plan also provides for the appointment of a Monitoring Professional, to oversee the implementation of the Resolution Plan. The Resolution Plan is approved by the CoC with 100% in accordance with law. No prejudice would be caused to any party, if the same is approved.
The said Resolution Plan is fit to be approved under section 31 (1) of the Code.
The Resolution Plan dated 26th February, 2020 submitted by M/s. Shri Sai Priya Sugars Limited as approved by the Committee of Creditors at their 5th meeting held on 28th February, 2020 with 100% voting is hereby approved by declaring that the Resolution Plan will be binding on the Corporate Debtor (Applicant) and its employees, members, creditors including the Central Government, any State Government or any local authority to whom a debt in respect of payment of dues arising under any law for the time being in force, as authorities to whom statutory dues are owed, guarantors, and other stakeholders involved in the Resolution Plan - Moratorium shall cease to have effect.
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2021 (1) TMI 965
Suit for recovery of price of goods sold and delivered - the claim of the plaintiff does not survive the approval of the Resolution Plan - Chapter XIIIA of the Original Side Rules - HELD THAT:- The Adjudicating Authority had accepted the Resolution Plan of the corporate debtor, that is the predecessor-in-interest of the defendant herein. The Resolution Plan has tabulated the liability of such corporate debtor. The plaintiff has not produced any document to establish that, the Resolution Plan approved in respect of the corporate debtor had the claim of the plaintiffs therein. The contentions of the plaintiffs that, the plaintiffs, subsequent to the death of the original plaintiff, was not aware of the insolvency proceedings in respect of the corporate debtor is of no consequence. In view of the ratio laid down in Committee of Creditors of Essar Steel India Ltd. [2019 (11) TMI 731 - SUPREME COURT], the plaintiffs cannot be said to have a valid claim as against the defendant any longer and at least subsequent to the approval of Resolution Plan of the corporate debtor.
In a proceedings under Chapter XIIIA of the Original Side Rules the defendant is entitled to unconditional leave to defend the suit, in the event, the defendant establishes that it has a substantial defense to the claim. In the facts of the present case, the defense set up by the defendant on the basis of the ratio of Committee of Creditors of Essar Steel India Ltd. [2019 (11) TMI 731 - SUPREME COURT], is substantial.
The application of the plaintiffs fail - Application dismissed.
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2021 (1) TMI 937
Fraudulent or wrongful trading with an intent to defraud the creditors of the Corporate Debtor - Section 66 of IBC Code - conduct and liability of Respondent No.1 to repay the assets and benefits of the Corporate Debtor which has wrongfully been received by Respondent - HELD THAT:- Reference is made to the decision of Hon'ble NCLAT in the case of Vijay Pal Garg & Ors vs Pooja Bahry (Liquidator of Gee Ispat Private Limited) [2020 (4) TMI 420 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] wherein the Hon'ble NCLAT was dealing with identical facts of an Application filed by R Punder section 66 and it was found that the records and accounts of the Corporate Debtor have been falsified and eventually proceeded to trigger an investigation under section 213 of the Companies Act 2013.
Thus in view of the judgement, it becomes clear that Respondent No.1 is clearly covered u/s of 66(1) and Respondent 2 and 3 are also covered u/s. 66(2)(a) and 66(2)(b) of the Code.
The Bench in view of the view that R1 i.e. Royal India Corporation Limited through various fraudulent transactions and by way of fudging the Books of Accounts in connivance with the R2 and R3 have defrauded the Corporate Debtor company to the extent of ₹ 1,19,08,05,762/-. This includes the clear admitted dues of ₹ 31.01 crore - The Bench directs that the total amount of ₹ 1,19,08,05,762/- be returned by R1 into the Corporate Debtor’s account within a period of 7 days from the pronouncement of this Order.
Application allowed.
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2021 (1) TMI 936
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Respondent has failed to comply with the order passed by the Hon'ble K-RERA and are in default of financial debt - HELD THAT:- It is a settled position of law that the provisions of Code cannot be invoked for recovery of outstanding amount but it can be invoked to initiate CIRP for justified reasons as per the Code. The Hon'ble Supreme Court in the case of Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited [2017 (9) TMI 1270 - SUPREME COURT], has inter alia, held that I&B Code, 2016 is not intended to be substitute to a recovery forum.
In the instant case, it is seen that the Petitioners have already obtained an order from the relevant forum under the RERA Act and the same can be executed before any relevant forum. This Tribunal cannot be used as a recovery forum when orders of the K-RERA or any other forum are not complied with. Merely because the other courses may be cumbersome, as pleaded, cannot be a ground for taking recourse to the I&B Code when no case is even otherwise made out for admission, since the Petitioners do not admittedly meet the minimum threshold of 10% etc. of Financial Creditors of the same class. For this reason, the Ld Counsel for the Petitioner's plea that liberty may be granted to file a fresh petition also cannot be acceded to. The petition is clearly an attempt at forum shopping and deserves to be dismissed.
Petition dismissed.
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