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Insolvency and Bankruptcy - Case Laws
Showing 1 to 20 of 119 Records
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2021 (11) TMI 1187 - SC ORDER
Seeking permission for withdrawal of appeal - Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Financial Debt - Non-performing asset - existence of debt and dispute or not - time limitation - it was held by NCLAT that The Admission of Section 7 Application is set aside.
HELD THAT:- The appeal is dismissed as withdrawn.
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2021 (11) TMI 1159 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI.
Rejection of Resolution Plan - Appellant submits that the Appellant has paid the full consideration of the 41 flats, therefore, he became the owner of the flats - HELD THAT:- At the stage when the application was filed by the Appellant no order could have been passed in his favour as prayed for under the Application - there are no ground to entertain this Appeal.
Appeal dismissed.
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2021 (11) TMI 1095 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Sale of the MV. VM Hopper Barge - violative of the moratorium imposed under section 14 of the Insolvency and Bankruptcy Code, 2016 or not - Preferential, Undervalued & Fraudulent Transaction or not - reversal of the sale of the MV. VM Hopper Barge - seeking restraint on Respondents, their officers, servants, agents, assignees, and successors in office from in any way alienating or creating any further third-party rights in respect of MV.VM Hopper Barge.
HELD THAT:- It is borne out from record that the Vessel HV. VM Hopper Barge H-107 against which the Respondent No.2 is having primary charge has been disposed of by Respondent No. 2 under SARFAESI proceedings to the Respondent No.3 out of liquidation process and the Respondent No.3 has already taken physical possession by paying the entire sale consideration and also obtained sale certificate in their favour from Respondent No.2 - It is also an admitted fact that the present Applicant had filed Securitization Application before the Debt Recovery Tribunal-II, Mumbai challenging the possession notice issued under the SARFAESI Act by Respondent No.2 and the matter is subjudice before the competent DRT and the DRT has refused to grant any stay to the applicant.
As rightly contended by the Respondent No.2, the Applicant has already approached the Competent DRT challenging the SARFAESI measure initiated by Respondent No.2 and the proceedings are pending. The issue as to whether the sale conducted by the Respondent No.2 in respect of Vessel is hit under Section 31 (d) of the SARFEASI Act or not can be decided by DRT. The Applicant cannot continue simultaneous proceedings both in NCLT and DRT Especially without any locus. Since the above application is not filed by the IRP or RP and since this Bench is inclined to dismiss the above application on the locus of the applicant, this Bench is not giving any findings on the other issues raised by the petitioner.
Application dismissed.
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2021 (11) TMI 1082 - NATIONAL COMPANY LAW TRIBUNAL CUTTACK BENCH
Seeking stay on removal of Dr. Kedarnath Panda, the Petitioner No. 1 from the Directorship of the Company - seeking stay on discontinuation of service and stay on restriction to enter hospital premises till disposal of the Company Petition - HELD THAT:- The matter has been taken on board today on being mentioned by Ld. Counsel for the petitioner stating certain urgency. Hearing was conducted through Video Conference but due to unexpected connectivity issues it could not be concluded.
Due to connectivity issues and disturbances in audio, matter could not be heard in totality. List this main CP and all other connected lAs for final hearing on 02.12.2021.
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2021 (11) TMI 1075 - NATIONAL COMPANY LAW TRIBUNAL CHENNAI
Filing of memo furnishing the breakup of the expenses incurred at the Project site for the months between June and October 2021 which are pending to be paid from the Applicant’s frozen bank accounts - HELD THAT:- On hearing the Applicant and the particulars furnished by way of memo, the payments to the employees, suppliers are to be made in the manner indicated.
Application disposed off.
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2021 (11) TMI 1057 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Seeking revival of Resolution Plan - Consensus for Settlement Plan reached or not - HELD THAT:- It is pertinent to mention that the existing Promoter was originally landowners of the land on which the Project "Orion Galaxy" is situated and had entered into the development agreement with erstwhile promoters of the Company to develop the project "Orion Galaxy". However, due to various reasons, the Project could not be completed by the erstwhile promoters on time, and as a result, the existing Promoter took control of the Project in 2017 and finally got complete control of the Company after 31.10.2019 when the existing Promoter purchased 100% shares of the Company after the order of NCLT, New Delhi.
The Company has mainly launched Phase-I of the Project, in which 470 units, out of 542 units, have been sold out. In Phase-II, the Company has booked only 79 units, out of which 57 units have been booked and allotted to related parties, and only 22 units are sold to end-users/customers - The existing Promoter/Suspended Directors of the Company justifying the purported settlement plan submits that "the Company requests to all the Stakeholders of the Company and the Project, to approve the aforesaid revival plan and allow the Management/Promoter to restart the construction.
There are the following major reasons to approve the Revival Plan in the best interest of the Project and the Company:
a) The existing management is fully aware of the Project; in case there is a change in the management, the new management will take time to understand the various aspects of the Project.
b) The CIRP process will only delay and proposed revival plan. However, the existing management will complete the Project within 15 months.
c) The CIRP process will additionally burden the Project with additional costs.
d) There is no clarity on who will bid for the Project and what will be offered.
e) The management has agreed to hand over the Project in a time-bound manner and without any additional cost burden to the Buyer.
f) The existing management will provide an approach road before completion of the Project.
g) The Promoters has agreed to provide Personal and Corporate Guarantee for taking finance for the Project and made the provision and back up to start immediately without wasting any time."
It is important to mention that no settlement plan encompassing all the allottees has been filed to date - It appears that the Appellant made a misleading statement before the Hon'ble Supreme Court that the settlement plan dated 13th February 2020 covers all the allottees. In fact, to date, there is no settlement plan covering all the allottees. There is no consensus among the allottees. Some of the Allottees favour the Settlement Plan, and others oppose the same. There is nothing on record to show that there is consensus for the purported Settlement plan. There is a trust deficit among the homebuyers. The proposed Reverse Insolvency appears to be a device for buying time. Based on the settlement plan and lack of consensus among allottees of flats and the present Promoters, there is no hope of success in arriving at a settlement.
The Settlement Plan dated 12th February 2020 and the further Revised Settlement Plan dated 12th March 2021 deserves to be rejected - However, the settlement process is provided under Section 12A of the Insolvency and Bankruptcy Code, 2016. Therefore, if settlement takes place, the same can be filed U/S. 12A of the Code before the Adjudicating Authority.
The Appeal is listed for hearing on 25th November 2021.
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2021 (11) TMI 1053 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - it is alleged that instead of responding to One Time Settlement (OTS) proposal of the Appellant, Respondent No.2 filed application under section 7 of the IBC against the Corporate Debtor - HELD THAT:- From perusal of the Impugned Order dated 26.8.2021, it is clear that in response to the section 7 application, the Managing Director of Corporate Debtor representing Respondent Nos. 1 to 5 filed reply which was considered by the Adjudicating Authority. It is also mentioned in the Impugned Order, paragraph 12 that Mr. Tushar Ravi, Chief Manager, State Bank of India, Khanapara Branch filed an affidavit dated 4.8.2021 in which he stated that due to inadvertence names of the personal guarantors were inserted as Respondent Nos. 2 to 7 and the names of Respondent Nos. 2 to 7 be deleted from the instant application - the contention of the Appellant that the petitioner (financial creditor-State Bank of India) did not comply with the order given by the Adjudicating Authority on 26.7.2021, which was regarding filing of affidavit to delete names of personal guarantors from the section 7 application, cannot be agreed upon.
The other contention of the Learned Counsel of the Appellant is that the Appellant had submitted an OTS proposal to the financial creditor (State Bank of India), which was pending decision, and hence the Adjudicating Authority should not have passed admission order on section 7 application. The acceptance of the settlement proposal by the financial creditor is a matter entirely in the ambit of the financial creditor (SBI) and we do not think that the proceedings before the Adjudicating Authority should have been held up and delayed, waiting for a response by the State Bank of India. IBC does not provide for keeping the proceedings in abeyance and the application for admission has to be decided in a stipulated timeframe. If a settlement would have been reached, the Appellant would have had recourse to Section 12A of the IBC.
The Innoventive Industries judgment [2017 (9) TMI 58 - SUPREME COURT] of the Hon’ble Supreme Court does not put any bar on the admission of an application under section 7 if the defects as pointed out to the petitioner have been cured.
Appeal dismissed.
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2021 (11) TMI 1045 - SUPREME COURT
Rejection of claim of appellant - rejection on the ground of time limitation - delay of two months - HELD THAT:- Since the appellant was required to file its claim within 3 months from 11.02.2020, and the appellant actually filed claim well before 14th January, 2021, the claim ought not to have been rejected. The order dated 22.03.2020 of this Court was subsisting and in force - In computing the limitation for any application, the period from 22.03.2020 till 14.3.2021 is to be excluded. All litigants whose limitation expired after 22.03.2020 would be entitled to extension of limitation till the 90th day from 15.03.2021. The learned NCLAT also did not notice the orders passed by this Court in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (3) TMI 497 - SC ORDER].
The learned Adjudicating Authority ought not to have rejected the claim of the appellant. The learned NCLAT erred in dismissing the appeal, without even considering the effect and impact of the orders of this Court in the suo motu writ petition - the appeal is allowed.
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2021 (11) TMI 1042 - SUPREME COURT
Seeking maintenance of status quo - appointment of Commissioner to get the real factual position of the affairs of the company - HELD THAT:- When the matters concerning interlocutory orders passed by the Tribunal are pending in appeal before the Appellate Tribunal and the said Appellate Tribunal has already passed the requisite orders for expeditious proceedings, there is no reason for this Court to entertain these appeals and to examine any of the aspects relating to interim arrangement or relating to the merits of the case.
The interest of justice shall be served by observing that in the facts and circumstances of the case and looking to the subject matter of pending appeals, the NCLAT may assign a reasonable priority to these matters and after completion of the pleadings, take up the matters for final hearing at the earliest.
The present appeals stand disposed of.
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2021 (11) TMI 1037 - NATIONAL COMPANY LAW TRIBUNAL AMARAVATI BENCH
Seeking for approval of the Resolution Plan - Section 30(6) and Section 31 of the Insolvency, and Bankruptcy Code, 2016 read with Regulation 39 (4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- In compliance of Regulation 38(1 A) of the CIRP Regulations, it has been set out in the Resolution Plan, that the Plan operates in best interest of all the stakeholders, as the Financial Creditors are being paid the best optimum value attributed to them and employment opportunities will be generated once the full-fledged operations of the Corporate Debtor starts - All the taxes, liabilities or obligations payable to, claims, assessments, counter claims, etc., shall stand irrevocably waived on the Resolution Plan being approved by the Tribunal. The Resolution Plan submitted by the Resolution Applicant is found to be meeting all the requirements of the IBC, 2016 and more importantly Section 30 (2) of the IBC Code and Regulation 38 (1A) and applicable CIRP Regulations. It does not contravene any of the provisions of law. It caters to the interest of all the Stakeholders.
In K. SASHIDHAR VERSUS INDIAN OVERSEAS BANK & OTHERS [2019 (2) TMI 1043 - SUPREME COURT] the Hon'ble Apex Court held that if the CoC had approved the Resolution Plan by requisite percent of voting share, then as per section 30(6) of the Code, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that the Resolution Plan as approved by CoC meets the requirements specified in Section 30(2). The Hon'ble Court observed that the role of the NCLT is 'no more and no less'. The Hon'ble Court further held that the discretion of the Adjudicating Authority is circumscribed by Section 31 and is limited to scrutiny of the Resolution Plan "as approved" by the requisite percent of voting share of financial creditors.
The instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A) and 39 (4) of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The same needs to be approved - Application allowed.
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2021 (11) TMI 1034 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH
Seeking removal of Respondent Nos. 3 to 7 from the CoC - there is neither any default nor any debt is owed - reconstitution of cancel entire voting rights of Respondent Nos. 3 to 7 and undertake appropriate changes to the present voting rights of the rest of the CoC members in view of the said fraud perpetrated by the Respondents - HELD THAT:- It is very clear to the Bench that R1 and R7 in the above-mentioned transactions have defrauded the Corporate Debtor Company and such an act is squarely covered under Section 66 (1) and 66 (2) of the Code - R1 and R2 who are the suspended directors in their defense have mentioned that the forensic report is incomplete and that the auditors have not conducted detailed review of the operations of the Corporate Debtor company. The Bench notes that the Respondent Number 1 and 2 who are the suspended directors have raised baseless technical objection regarding choice of sampling method and sampling technique. It is clear to the Bench that they have no defense regarding their conduct in the whole matter wherein they had fraudulently taken out money from the Corporate Debtor’s Bank account and had paid back same amount to the related parties of the alleged homebuyer.
The Bench therefore notes that R7 has not provided any proper explanation regarding its collusion and being a party to the fraudulent transactions.
Removal of R3 to R7 from CoC and also as financial Creditor/ Home- Buyer, as there is no debt own to them by the Corporate Debtor company and purported infusion of funds by each of these Respondent were returned back to them through their related parties (relatives) on the same day or the next day by Respondent Number 1 and 2 who are suspended directors of the Corporate Debtor company - these transactions of purported creditors are vitiated by fraud, therefore all these transactions are declared as null and void.
Petition disposed off.
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2021 (11) TMI 1029 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Payment of remuneration and the litigation expenses incurred by the applicant - HELD THAT:- Applicant has failed to produce any written communication between himself and Mr. Gagan Bothra accepting the amount of fee payable to the Applicant and as such balance as claimed cannot be considered at this stage - Admittedly CoC has not approved the legal expenses payable to the IRP and the legal cost incurred by him as required under Regulation 33 of CIRP Regulations and as such claim of the IRP cannot be considered at this stage.
Petition dismissed.
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2021 (11) TMI 1028 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- The application is complete and the term loan facility has been availed by the Corporate Debtor and the same has not been repaid by the Corporate Debtor, therefore there is default in payment of debt. That there is a valid Assignment of Debt and before the expiry of limitation period to initiate proceedings, there is a payment of ₹ 15 crore pursuant to the order of DRT and order of DRT is placed on record. Aggrieved by the order of DRT, Corporate Debtor went in Writ Petition before the Hon'ble High Court, Delhi. Hon'ble High Court's judgement is also placed on record - There is a valid acknowledgement on the part of the Corporate Debtor in the form of Settlement Proposal and there is settled law as declared by Hon'ble NCLAT in the matter of Manesh Agarwal Vs Bank of India and Anr. [2020 (8) TMI 697 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] where it was held that Article 137 of the Limitation Act shall be applicable for an Application filed under Sections 7, 9 or 10 of the I&B Code. Since the account of the Corporate Debtor was classified as NPA on 29th January 2013. Therefore, default started on 29th January 2013 and three years period of limitation was available for applying u/s Section 7 of the Code - thus, a fresh period of limitation of three years started w.e.f. 01st June 2016 in terms of Section 18 of the Limitation Act. Thus it is clear that the petition filed under Section 7 of the Code on 29th September 2018 is well within limitation.
The term "Without prejudice to the rights and contentions of the Corporate Debtor" does not negates the admission of the liability of the debt. Acknowledgement of liability under Section 18 of the Limitation Act, 1963 itself demands a broader interpretation to serve the ends of justice - it is opined that OTS shall constitute a valid acknowledgement under Section 18 of the Limitation Act, 1963.
Petition admitted - moratorium declared.
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2021 (11) TMI 1027 - NATIONAL COMPANY LAW TRIBUNAL HYDERABAD
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - breach of Employment Contract - HELD THAT:- The counsel for Corporate Debtor would contend that the claim of the entire amounts made by the Operational are false and are denied. The counsel would contend that the Operational Creditor went on a vacation to Bali despite leave being not sanctioned which is in complete violation of the terms and conditions of appointment and thereby causing termination of services.
The counsel for Corporate Debtor would also contend that after the Operational Creditor termination, many clients who were availing services had abruptly cancelled their procedures apparently under Operational Creditor influence which is poaching of clients thereby causing huge loss to the Corporate Debtor as such the Operational Creditor is guilty of gross misconduct. The amounts which had to be refunded to the Corporate Debtor is ₹ 2, 13,000/- during the period from September, 2018 to January, 2019. Infact, the Corporate Debtor was seriously considering taking legal action for recovery of the amounts from the Operational Creditor - The counsel for Corporate Debtor would also contend that the Operational Creditor influenced other two Doctors and staff to leave the organisation and join a competitor which amounts to gross misconduct and poaching of staff and sharing crucial information of the Corporate Debtor with the competitors.
Prima facie there is a breach of Employment Contract, she went outside without sanction of any leave or permission. Relying on the documents filed by both the parties, the petition deserves to be dismissed.
The petition is dismissed.
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2021 (11) TMI 1019 - NATIONAL COMPANY LAW TRIBUNAL CUTTACK BENCH
Liquidation of Corporate Debtor - non-compliances on the part of the Resolution Applicant - provision for extension of payment time provided in the implementation of the Resolution Plan, not existing - HELD THAT:- Although, this Adjudicating Authority was of the view that the Resolution Applicant has grossly failed in meeting its commitments in respect of implementation of the Resolution Plan, liquidation is the last resort when all other available options fail in the CIRP. In the interest of all the stakeholders and also the implementation of the Resolution Plan, after considering all the facts and circumstances of the case, allowed one last opportunity to the Resolution Applicant to fulfil all its commitment and financial obligations stated in the Resolution Plan by 31.10.2021, clearly stating that if it fails this time, actions as may be deemed appropriate as per law, shall be taken. The Resolution Applicant was also directed to submit a Weekly Progress Report in implementation of the Resolution Plan in the Registry. In total disregard to Orders of this Tribunal the Applicant has grossly failed in its commitments.
The conduct of the successful resolution applicant is completely lacking in bona fides and is therefore questionable. After such non-compliances seeking further time for the required compliances, for any reason whatsoever, is not acceptable to this Tribunal at this stage, more particularly when conduct of the applicant in its earlier commitments and compliances in response to earlier Orders of Tribunal in itself is questionable.
This Application is rejected while questioning the conduct of the Resolution Applicant in the entire matter - Application dismissed.
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2021 (11) TMI 994 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Liquidation of the Corporate Debtor - Constitution of CoC by the Resolution Professional in accordance with IBC provisions - Whether the recommendation for liquidation of Respondent No. 1 was taken by the CoC in contravention of IBC provisions? - Section 61 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- While the CoC took a decision for going for liquidation of the Corporate Debtor, the Appellants have challenged the very basis of constitution of CoC and fixing of voting rights by labeling it illegal, done to provide undue and unfair advantage to Respondent No. 4. Moreover, the Appellants have also claimed that the CoC took a decision for liquidation without following the procedure under CIRP stipulated in the IBC. The basic reason for seeking Resolution Plan under CIRP is to ensure that the Corporate Debtor can continue to function as a going concern, while taking care of interests of its creditors. Liquidation is the last resort which implies corporate death of the company. For the Corporate Insolvency Resolution Process to result in successful resolution of the corporate Debtor, preparation of a correct information memorandum is a must, which may result in work able resolution plans.
In the present case, it is found that information memorandum was not prepared with full and correct details of assets and liabilities of the Corporate Debtor. The RP also did not pursue his application u/s 19(2). As a result the CoC decided to abandon the step of inviting of EOI for Resolution Plan.
A duty has been cast on the RP under section 25 of IBC where he has to take immediate custody and control of assets of Corporate Debtor, including the business record of the Corporate Debtor; and furthermore a duty has been passed on the Resolution Professional under section 25(2)(g) to prepare an information memorandum in accordance with the provisions of IBC. Section 29 of the IBC requires the Resolution Professional to prepare an information memorandum in such form and manner contain such relevant information as may be specified in the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation, 2016 for formulating a Resolution Plan.
It is clear that the Resolution Professional has resorted to very novel and ingenious way of circumventing the duties imposed upon him in the IBC for preparation of information memorandum, exclusion of time to extend CIRP period and inviting Expression of Interest for Resolution Plan for the Corporate Debtor. He, with active support of Nitin Goel, representation of Respondent No. 4, managed to deal with these important issues in a very superficial and objectionable manner. Such action of RP betrays of prejudicial action reeking of favourtism for Respondent No. 4 - the CoC was not constituted in accordance with the provisions of IBC. In the matter, the CIRP was not pursued with fairness and due diligence by the Resolution Professional and the resolution for liquidation of the Corporate Debtor was taken in a meeting with an improper voting share ascribed to Respondent No. 4 and taken in unseemly haste.
The CoC as constituted in the CIRP of the Corporate Debtor was not in accordance with provisions of IBC, therefore its constitution is quashed - claims of various financial creditors including home buyers should be appropriately fixed.
Matter remanded to the Adjudicating Authority for taking action as directed, in accordance with the provisions of IBC and law - matter on remand.
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2021 (11) TMI 993 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Liquidation of Corporate Debtor - Section 33 of the IBC - review power - Recall power - error apparent on the face of record or not - HELD THAT:- The term ‘Error apparent on the face’ of the proceedings is held to be one based on clear ignorance or disregard of the provisions of Law as per decision of the Hon’ble Supreme Court in LILY THOMAS, ETC. VERSUS UNION OF INDIA & ORS. [2000 (5) TMI 1045 - SUPREME COURT]. Further, in the decision of the Hon’ble Supreme Court in HARI VISHNU KAMATH VERSUS SYED AHMAD ISHAQUE AND OTHERS [1954 (12) TMI 22 - SUPREME COURT] it is held that ‘it is essential that it should be something more than a mere error; it must be one which must be manifest on the face of the record’.
Review power - HELD THAT:- In the decision of Hon’ble Supreme Court in Patel Narshi Thakershi V. Pradyumansinghji Arjunsinghji reported in (1971) 3 SCC Page 844, at spl page 847 it is observed and held that ‘the power of review is not an inherent power. It must be conferred by Law either specifically or by necessary implication’. No wonder, the ‘Tribunal’ has no inherent power to review, as per Section 114 and Order 47 of the Civil Procedure Code.
Tribunal's Power - HELD THAT:- Mere glance of Section 420(2) of the Companies Act, 2013 unerringly points out that the ‘Tribunal’ has power to rectify its order, if there is any mistake apparent from the record, but it has ‘no power’ of review of its own order. In this regard, this ‘Tribunal’ pertinently points out that Rule 154 of the National Company Law Tribunal Rules, 2016 enjoins the ‘Tribunal’ to rectify its order, if there is any clerical or arithmetical mistake in the order of the Tribunal or any error therein arising out of any accidental slip or omission of its own motion or an application of any party by means of rectification.
Recall power - HELD THAT:- It is significantly pointed out by this ‘Tribunal’ that Hon’ble Supreme Court in the decision in SRI BUDHIA SWAIN & ORS. VERSUS. GOPINATH DEB & ORS. [1999 (5) TMI 596 - SUPREME COURT] has prescribed the conditions for recalling an order (i) the proceedings suffer from the inherent lack of jurisdiction and such lack of jurisdiction is patent (ii) There exists fraud or collusion in obtaining the judgement (iii) There has been a mistake of the Court prejudicing a party, or (iv) a judgement rendered in ignorance of the fact that a necessary party has not been served at all or had died and his estate was not represented.
In the instant case, on going through the impugned order dated 11.06.2021 in IA No.2034/2021 in (IB) 702(ND)/2018 this Tribunal finds that the ‘Adjudicating Authority’ at para 12 had observed that it has no power to review its own order but traversed beyond its purview and reviewed the order dated 04.07.2019 in CA No.827/2019 by concluding that once a liquidation order was passed there is no scope to recall, which is contrary to the order passed by it on 04.07.2019 where it observed that the pending application will be disposed and then liquidation be directed.
The ‘Adjudicating Authority’ (National Company Law Tribunal, New Delhi II) is directed to restore the application to its file and to pass fresh orders on merits, in accordance with law, of course, after providing adequate opportunity of hearing to both sides, by permitting them to raise all factual and legal pleas as expeditiously as possible - application allowed.
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2021 (11) TMI 992 - NATIONAL COMPANY LAW TRIBUNAL , NEW DELHI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - default made against the Credit facilities extended by the Banks - Personal Guarantor - existence of debt and dispute or not - HELD THAT:- In view of the clauses of the Deed of personal Guarantee, it is stated that the demand of the Respondent Bank is invoked and the continuous Deed of personal Guarantee executed by the Applicant is well within limitation and not barred.
It is further averred by the Applicant/Debtor that no Application under this Chapter has been admitted in respect of the Applicant/Debtor during the period of 12 months preceding the date of submission of this Application. The Application under consideration is in the prescribed Form and contains the required details. Thus, prima facie the requirements of Section 94 are fulfilled.
The Applicant or his Counsel and the Registry/Court Officer are directed to serve the copy of this Order along with copy of the Application and documents immediately on the Resolution Professional so appointed by all modes for information and compliance - List the matter on 15.12.2021.
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2021 (11) TMI 953 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Entitlement of fees of Resolution Professional - Respondent was entitle for his fee upto which date? - whether when CoC decided to replace the Interim Resolution professional he ceased to entitle to any fee? - HELD THAT:- The present is not a case where CoC in first meeting resolved to appoint the Interim Resolution Professional as Resolution Professional rather they in the first meeting resolved to replace the Interim Resolution Professional by another Resolution Professional. The present case is covered by Section 22 (3) (b) where CoC decided to replace the Interim Resolution Professional and it had filed an Application before the Adjudicating Authority for appointment of proposed Resolution Professional on 31.07.2018. Sub-section (4) of Section 22 requires that the Adjudicating Authority shall forward the name of the Resolution Professional proposed under clause (b) of sub-section (3) to the Board for its confirmation and shall make such appointment after confirmation by the Board. The most relevant provision is sub-section (5) of Section 22 which empowers the Adjudicating Authority to pass an order for the Interim Resolution Professional to continue to function as the Resolution Professional where the Board does not confirm the name of the proposed Resolution Professional within 10 days. The present case is not a case where Adjudicating Authority has passed any order after 31.07.2018 to continue the Interim Resolution Professional till the confirmation of the Board is received.
After 10 days of sending the name of Resolution Professional to Board by the Adjudicating Authority, there being no order of the Adjudicating Authority to continue the Interim Resolution Professional as Resolution Professional, the Interim Resolution Professional has no right to continue to function as the Resolution Professional after such date. Obviously, the claim of the Respondent to continue to function as Resolution Professional till 09.10.2018 cannot be accepted - From the material on record, it does appear that after first meeting of the CoC dated 16.07.2018 when a decision was taken to replace the Interim Resolution Professional, no substantial work has been done. The second meeting was convened by the Interim Resolution Professional on 10.08.2018 which too was objected and no business was transacted in the said meeting also. Thus, effectively the Interim Resolution Professional could function only till 16.07.2018 and, as noted above, legally he could not have continued after 10 days from sending the proposal of new Resolution Professional by Adjudicating Authority as per Section 22 of the Code.
This Tribunal passed an interim order on 12.07.2019 subject to condition of payment of ₹ 10 lakh to Respondent No.2 which has been accepted by Respondent. Looking to the sequence of events and actual work conducted by the Respondent, the amount of ₹ 10 lakh is sufficient to cover the fee payable to the Interim Resolution Professional including the cost for Insolvency Resolution Process - the amount paid to Respondent under interim orders sufficiently cover the Insolvency Resolution Process costs and no further payment is required to be made.
Appeal allowed.
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2021 (11) TMI 952 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Seeking direction against the Resolution Professional to receive the Resolution Plan they proposed to submit and to place the same before the Committee of Creditors for their consideration under Section 30 of I&B Code - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The explanation attached to Sub-section (2), of Section 33, of the Insolvency and Bankruptcy Code, empowers the Committee of Creditors to decide to liquidate the Corporate Debtor, any time after its constitution under sub-section (1) of Section 21 and before the confirmation of Resolution Plan, including at any time before the preparation of the Information Memorandum - it cannot be said that the Committee of Creditors has taken steps in haste and was premature, as there was still a possibility for the Resolution of the Corporate Debtor.
The learned Counsel for the Appellant argued that the Corporate Insolvency Resolution Process of the Corporate Debtor commenced on 25 July 2080. Thus, the initial 180 days set out under Section 12 of the IBC expired on 24 January 2019. However, even when the CIRP period was not close to over, the Committee of Creditors chose to liquidate it. Since the COC was authorised to exercise its power under the explanation attached to Sub-section (2) of Section 33 of the I&B Code, its action cannot be questioned.
The Resolution Applicant has no vested right that his Resolution Plan is considered. No challenge can be preferred to the Adjudicating Authority at this stage. The Resolution Professional is only authorised to examine and confirm that the Resolution Plan conforms to the Code provided under Section 30 (2). It is also clarified that the Resolution Professional is required to examine that the Resolution Plan submitted by the various applicants is complete in all respects before submitting it to the Committee of Creditors - In the instant case, the Resolution Professional preferred an Application before the Adjudicating Authority under Section 33 (2) of the Code prays for a liquidation order of the Corporate Debtor. The RP had brought to the notice of the Adjudicating Authority that an amount of about ₹ 21 crores is receiveable to the corporate debtor from two partnership/proprietors firms, i.e. M/s Innovative Enterprises and Innovative Trading Company. They were interested persons for submitting the expression of interest (EOI). These are group entities of the Appellants.
On perusal of the Minutes of the COC, it appears that the RP called the COC Meeting on 15 January 2019 wherein the Expression of Interest (EOI) as submitted by the Appellant was placed before the COC members along with the evaluation by the RP After discussion, it was decided by the COC members that the Appellant's do not fulfil the eligibility criteria. Therefore, the COC has reiterated its decision to put the Corporate Debtor into liquidation. However, the COC has rejected the expression of interest submitted by the Appellant's and has not allowed additional time to submit a Resolution Plan. The COC was fully empowered to take such a decision under its commercial wisdom. Under the explanation attached to Sub-section (2) of Section 33 of the I&B Code, 2016, the COC, at any stage after its formation and before the approval of the Resolution, was empowered to resolve to liquidate the Corporate Debtor.
Application dismissed.
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