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Insolvency and Bankruptcy - Case Laws
Showing 121 to 128 of 128 Records
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2021 (2) TMI 86
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - record of contractual agreement or not - copy of invoices not produced - nature of professional services rendered by the Operational Creditor not clear - proof of service of demand notice ot provided - HELD THAT:- There is no record of any contractual arrangement between the Operational Creditor and the Corporate Debtor - Copy of the invoice has not been attached. What has been attached at p.49 is only a calculation sheet mentioning the principal amount of the invoice, the interest calculation. There is no record of the invoice having been served on the Corporate Debtor - There is no record of what professional services have been rendered by the Operational Creditor - Proof of service of Demand Notice has not been attached to the Petition. However, proof of posting in the form of Speed Post receipt No.EM779732264IN dated 12.04.2019 has been attached as Exhibit ‘D’ at p.59. The tracking receipt attached at p.51 only records that “Item Dispatched.” This is not enough to satisfy the requirement of section 9(5)(ii)(c) of the IBC read with rule 5(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, both of which use the term “delivered.”
The pre-requisites of section 9 of the IBC have not been satisfied. Therefore, the present petition fails and therefore, the same is rejected in terms of section 9(5)(ii)(c) of the IBC.
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2021 (2) TMI 54
Resolution for approval of Settlement Proposal - Section 12A of the I&B Code - HELD THAT:- The facts on record indicate that a notice invoking arbitration was issued on 29.07.2016 by respondent no.1 in relation to Contract No.2 whereafter an application under Section 11(6) of the Arbitration & Conciliation Act, 1996 was filed in the High Court of Bombay on 15.12.2016. A notice was also issued on 23.03.2017 invoking arbitration in relation to Contract No.1. Thereafter, Consent Terms dated 29.03.2017 were entered into, in terms whereof, the Notice dated 23.03.2017 stood withdrawn. It appears that Consent Terms did not fructify and completely failed.
On 16.06.2017 a Notice under Section 8 of the Code was issued. In its response dated 29.06.2017, respondent No.2 submitted inter alia that the Terms of Consent were void and unenforceable - thereafter, the application under Section 11(6) as aforesaid was withdrawn on 14.09.2017.
The Adjudicating Authority admitted the petition under Section 9 of the I.B. Code vide Order dated 25.03.2018 against which an appeal was preferred. The appeal was dismissed by the NCLAT - appeal dismissed.
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2021 (2) TMI 53
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - operational debt, due and payable or not - Frustration of contract by efflux of time - time limitation - HELD THAT:- It is seen from the correspondences between the parties and from the perusal of the clauses/articles as enumerated under the EPC contract that the contract has not been terminated by either parties and the contract still subsists. Therefore, the Adjudicating Authority rightly held that there is no termination of contract and the issue raised with regard to barred by limitation cannot be accepted. Therefore, we hold that the Application filed by the Respondent under Section 9 of IBC before the Adjudicating Authority is not barred by limitation.
Whether the claim of the Respondent is an Operational Debt? - HELD THAT:- Admittedly, the claim of the Respondent is an operational debt. Therefore, the arguments of the Appellant that the claims of the Respondent is not an operational debt does not hold any field.
Frustration of contract by efflux of time - HELD THAT:- The EPC contract between the Appellant and Respondent still subsists and there is no such clause in the contract regarding frustration or termination by efflux of time, it is held that there is no merit in this point and accordingly, we negate this point issue also.
From the perusal of the facts it is evident that the default has arisen out of EPC Contract, which itself is a continuing contract. Even from the Demand Notice dated 02.07.2018 in particulars of operational debt at column-1, the Respondent had clearly stated that the debt fell due on 24.12.2010 and the last payment made to the Respondent was on 25.02.2011 through RTGS. It is also mentioned that the debt continues to fall even today as the EPC contract between the Appellant and Respondent never terminated by either parties - the Adjudicating Authority had rightly admitted the Application of the Respondent which in our considered opinion does not require any interference in the instant Appeal.
Appeal dismissed.
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2021 (2) TMI 52
Maintainability of application - initiation of CIRP - misuse of Section 420 of the Companies Act, 2013 - mistake apparent on the fact of record for which RP is seeking amendment - HELD THAT:- It is admitted fact that the RP worked for only 39 days and the settled amount is ₹ 1250000/- and the expenses for 39 days is ₹ 17,75,638/- which seems unreasonable and excessive on the face of it. Further the order was passed after consent of both the sides. Further when the order was dictated the counsel appearing on behalf of the RP did not object and also did not brought the fact before the Appellate Tribunal that he is proxy counsel. The argument of the RP that the counsel was proxy counsel and he was not authorised, is an after thought. Further the RP has not made any complaint against the counsel Mr. Rituraj Biswas to the Bar Council of India.
Petition dismissed.
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2021 (2) TMI 51
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or not - existence of debt and dispute or not - HELD THAT:- The respondent itself has admitted having taken a term loan of ₹ 4.00 crores and having repaid the entire loan as per the schedule agreed upon between the parties. The respondent has also admitted having taken additional loan of ₹ 2.50 crores subsequently. Thus, the respondent has admitted the debt. The only objection raised by the respondent is that in absence of repayment schedule, penal interest/charges or interest calculation are without any basis and/or justification are disputed between the parties. On perusal of records it is found that no document is produced by the respondent fortifying such claim. On the other hand, the petitioner has put on record (pages 25-30 of rebuttal documents) the repayment schedule duly sealed/signed and acknowledged/accepted by the respondent. That, the application is filed on 9th July, 2019. On perusal of the records it is found that from time to time the corporate debtor has made payments towards the outstanding loan and thus acknowledged the debt. That, the application filed by the financial creditor is well within limitation. That, the documents filed along with the application is sufficient to prove that there exists financial debt.
The Adjudicating Authority is of the considered view that there is a debt due to "financial creditor" and there is default on the part of the corporate debtor - the application is found to be complete in all respect. Hence it does not warrant any rejection or dismissal.
That, the records available shows that the applicant had sanctioned term loans to the respondent company, to be repaid within the stipulated period as per the terms and conditions agreed between the parties. Records available shows that the respondent has not cared to reply the notice issued by the applicant - In the instant application, from the material placed on record by the Applicant, this Authority is satisfied that the application is complete in all respect and the Corporate Debtor committed default in paying the financial debt to the Applicant and the respondent company has acknowledged the debt - In the instant case, the documents produced by the Financial Creditor clearly establish the 'debt' and there is default on the part of the Corporate Debtor in payment of the 'financial debt'.
The application under section 7 (2) of the IB Code is complete in all respects and there is debt due to the "financial Creditor" and there is default on the part of the "corporate debtor". Hence, there is no alternative but to admit the application in absence of any infirmity - Petition admitted - moratorium declared.
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2021 (2) TMI 15
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - service of demand - Demand Notice u/s 8 of the Code was not served on the Corporate Debtor - deemed delivery or not - Claim of the Applicant Operational Creditor was seriously disputed - HELD THAT:- Admittedly, the Demand Notices sent u/s 8 of the Code to the registered address, and functional address of the Corporate Debtor met with the remarks' addressee moved' and 'unclaimed' respectively. Unclaimed, will also have to be treated as Service of Notice. Again one set of Demand Notice was duly served upon one of the Directors of the Corporate Debtor. The legislative intent of issuance of Demand Notice under Section 8(1) is not a mere formality but a mandatory provision. Only after service of notice under Section 8(1) and on completion of 10 days, if payment towards the demand is not made, an Operational Creditor gets right to apply under Section 9 and not before such date. Upon perusal of the record, it is apparent that the Demand Notice was duly served on the functional address as well as Director of the Corporate Debtor. Under Section 2(59) of the Companies Act, 2013 Director is included in to definition of Officer. Under Section 20 of the Act a document served on a Company or on Officer thereof is service recognized.
Going from Principles of Natural Justice, in terms of Section 424 of Companies Act read with above provision of Service of Notice on Director must be held to be good service. Therefore, in our opinion, the mandate u/s 8 of the Code was fulfilled, and the Adjudicating Authority has rightly admitted the application u/s 9 filed by the Operational Creditor for initiating Corporate Insolvency Resolution Process against the Corporate Debtor.
Despite service of Demand Notice u/s 8 of the Code and service of the application u/s 9 of the Code, the Corporate Debtor did not appear before the Adjudicating Authority - the Adjudicating authority had not erred in proceeding exparte in the matter.
The Appellant has failed to demonstrate that the impugned order suffers from any legal infirmity - Appeal dismissed.
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2021 (2) TMI 14
Maintainability of application - initiation of CIRP - outstanding dues - suppression of facts - applicant turned into non-performing asset (NPA) as on 9-12-2013 and on account of default, legal action was initiated under DRT Act and SARFAESI Act, 2002 - HELD THAT:- On perusal of the record it is found that no Board Resolution is ever passed by the company authorising Mr. Sanjay Gupta to file the instant application. Further, on perusal of the record it appears that the applicant company has held one Extraordinary General Meeting (EGM) flouting all the norms of the Companies Act, 2013, thereby the very power given in favour of Mr. Sanjay Gupta is bad in the eye of law and as such the application is not maintainable for want of proper authorisation.
Admittedly, as also matter of record that, the applicant is not a corporate applicant as per Form 6, clause 3. The applicant is not a director and is disqualified under section 168 of the Companies Act, 2013 wherein the name and address of the Director is shown as "All directors on the Board has already resigned and vacated office pursuant to resignation u/s 168 of the Companies Act, 2013 and a situation of deadlock has emerged. However, clause 3 of Form 6 further discloses that the list of promoters along with their address attached - As per the list of promoters/shareholding pattern as on 30-6-2018 (page 11), Mr. Sanjay Gupta holds 23,15,714 shares of the company. Further, the applicant has not filed/disclosed the details of the unsecured financial creditors. However, there are as many as 427 operational debtors as per the list annexed to the application at page Nos. 24-32. However, while going through the records it is found that there is no whisper about the outstanding amount. It is also pertinent to note that if the company is really insolvent, applicant could have opted for winding up/dissolution application. Further, affairs of the company is managed by the Directors and not by the promoters. Since the Directors are already disqualified, the applicant has no authority to file the instant application.
It is also a matter of record that objector(s)/banks have already initiated proceedings under RDDB Act, 1993 and SARFAESI Act, 2002 and to install the said proceedings, the applicant has filed the instant application, so as to initiate moratorium and to get stayed the proceedings initiated by the banks - Company Petition stand dismissed as not maintainable.
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2021 (2) TMI 13
Implementation of Resolution Plan - seeking directions to be given to the Sugar Commissioner, Maharashtra State, to the Collector/Sub-Divisional Officer/Gram Panchayat/Talathi of Sakharwadi for removing the entry of Government of Maharashtra - HELD THAT:- The alleged act on the part of Respondent in not withdrawing and/or recalling its order of issuance of R.R.C. is causing enormous harm, loss and injury to the Applicant. The said immoveable property vests and/or stands transferred in favour of the Applicant in furtherance of the said Order dated 11-11-2019 of this Tribunal. The Applicant is deprived of the effective use of the said immoveable property on account of the aforesaid act on the part of the Respondent despite the Applicant having paid the entire amount of consideration. Also, the Applicants' title to the said immoveable shall continue to be defective till such time the said Order of R.R.C. continues to be operative and/or not withdrawn. Further, on account of non-removal and/or continuance of R.R.C. on the immoveable property, prejudice is caused to the Applicant not only in carrying on, running and operating the said sugar plant, payment of wages and salaries to workers and labourers, procurement of sugarcane from the farmers but also implementations and giving effect to the approved Resolution Plan. This non-implementation of the Resolution Plan is also causing great prejudice to the poor farmers and therefore, keeping their interest in view along with the interest of the Corporate Debtor Company and according to the provisions of law, this application needs to be allowed.
Once the Resolution Plan is approved under section 31 of the Code, all the assets and benefits of the contracts of the Corporate Debtor stands unconditionally transferred and assigned and vested in the Successful Resolution Applicant free from all encumbrances. Further, all persons including Central and State Government as well as the Local Authorities are bound by the said Order. However, Respondent No. 1 despite being bound by the said Order dated 11-11-2019 did not recall his orders dated 26-4-2018 and 18-9-2019 issuing Revenue Recovery Certificates (RRCs) of the sum of ₹ 4783.98 lakhs and ₹ 138.92 lakhs aggregating to ₹ 4925.80 lakhs creating a charge on the immoveable property of the Corporate Debtor in the land revenue records.
The Respondent has mentioned that this Tribunal has no jurisdiction to entertain this application as there is an alternate remedy available. But Section 60(5) of the Code read with Rule 11 of the NCLT Rules, 2016 which deals with the "inherent powers of the NCLT" very well empowers this Tribunal entertain and adjudicate this application as it directly relates to the CIRP of the Corporate Debtor. It is pertinent to note here that under section 3 of the Sugarcane Control Order, 1966, titled Fair and Remunerative Price of Sugarcane payable by producer of sugar including sub-sections 3(8) & 3(9), provides that the Collector merely acts as an authority to recover from the said producer of sugar in a case where the producer of sugar has defaulted in paying the whole or any part of the price of sugarcane to the growers of sugarcane - It is clear that the later non-obstante clause of the Parliamentary enactment will also prevail over the limited Vnon-obstante clause contained in Section 4 of the Maharashtra Act. For these reasons, we are of the view that the Maharashtra Act cannot stand in the way of the corporate insolvency resolution process under the Code.'
It is clear that Section 238 of the Code is an overriding provision and has an overriding effect on all the other laws. The company is already into CIRP and therefore, no question as to the jurisdiction of this Bench to hear and decide this matter arise - it is believed that the amount specified in the certificate has already been paid directly to the farmers in accordance and in furtherance of the Order of this Tribunal approving the Resolution Plan. Therefore, there appears no apparent reason to keep these properties as a charge/encumbrance on the past dues of the Corporate Debtor. This is merely delaying the process of CIRP and causing prejudice to the interests of the farmers.
Application allowed.
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