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Insolvency and Bankruptcy - Case Laws
Showing 41 to 60 of 120 Records
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2021 (7) TMI 1080
Seeking approval/revision of Resolution Plan - claim of the applicant is that after the approval of the Resolution Plan, the applicant has approached the GNIDA for sanction of the plan which is still pending for approval by the Respondent - HELD THAT:- Section 60(5)(c) of IBC, 2016 says that any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code shall be considered by the Adjudicating Authority.
A bare perusal of the provision of Section 5 (14) of IBC, 2016, shows that the insolvency resolution process period means the period of one hundred and eighty days beginning from the insolvency commencement date and ending on one hundred and eightieth day - this period of 180 days may be extended under Section 12 of IBC, 2016. In view of the amended provision of Section 12 of IBC, 2016, the total period of insolvency resolution process can be of 330 days. Which means, the period so referred to in Section 5(14) of IBC, 2016 is subject to the extension made under Section 12 of IBC, 2016 or till when the Resolution Plan is approved by the Adjudicating Authority.
Admittedly, the Resolution Plan has already been approved - the Resolution Plan has already been approved by the Adjudicating Authority on 20.02.2020. Therefore, no insolvency proceeding is pending before the Adjudicating Authority.
Section 60 (5) of IBC, 2016 is applicable only if any insolvency resolution or liquidation proceedings of the corporate debtor or corporate person is pending before the Adjudicating Authority and in the instant case, it is seen that no such proceeding is pending before this Authority, therefore, the application filed by the applicant under Section 60 (5) of IBC, 2016 is not maintainable - the prayer of the applicant to give direction of the Respondent/GNIDA for the sanction of the plan is hereby rejected - application dismissed.
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2021 (7) TMI 1078
Liquidation of Corporate Debtor - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The reasons assigned in the application with respect to initiating liquidation of the corporate debtor appears to be genuine in the present market scenario and convincing. Apart from that the period of CIRP has already expired long back without any resolution plan and therefore, there is no option other than liquidation of the corporate debtor although there was no voting of the CoC for liquidation of the corporate debtor.
The liquidation is allowed - application allowed.
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2021 (7) TMI 1014
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt or not - disbursement of loan and its non-payment is proved by the documents placed on record - Financial Creditors - existence of debt and dispute or not - HELD THAT:- Since the disbursement of the loan is proved vide Bank's statement of the Financial Creditor for the period 18/04/2016 to 29/03/2019, issued by the Bank of Maharashtra showing the disbursement of loan to the Corporate Debtor and the amount outstanding has been admitted by the Corporate Debtor vide its confirmation letter duly signed and sealed mentioned above, and since the admitted default of non payment of the outstanding amount is proved on the basis of documents placed on record by the Financial Creditor including various notices and reminders recalling the outstanding debt, the application of the Financial Creditor deserves to be admitted.
There are no hesitation to order that the CIRP in respect of the Corporate Debtor be initiated - Petition admitted - moratorium declared.
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2021 (7) TMI 1012
Seeking direction upon the RP to reconsider and reverify the claim submitted by the applicant, before approval of the Resolution Plan - Collation of claim by RP - HELD THAT:- This is a case where the RP himself was aware from the records that there was only one time supply of materials by the applicant and the monthly charge was towards the hiring cost of those materials. It is also admitted by the RP that the materials are still lying at the project site and have not been returned so far to the applicants - In this scenario, while the RP could not properly have paid the tax on the supply of goods without a proper tax invoice, there was nothing that prevented him from factoring in the basic rent in respect of the materials which are already technically under the corporate debtor's custody but physically lying within the Metro Railway Project site.
The sheer anchor of the defence raised by the answering respondent is that once a Resolution Plan is approved all undecided claims are extinguished - the applicant has diligently pursued his claim for acceptance and collation by the RP and if it could not be taken up by this Adjudicating Authority before the approval of the resolution plan it cannot be said that the RP extinguishes all such claims.
While those invoices which do not contain a signature cannot be accepted in so far as the tax component of the bill is concerned, there is nothing that prevented the RP from considering payment of the basic rent since the materials of the applicant were at all material times in the custody of the corporate debtor and being used at the site of the project awarded to the corporate debtor. Therefore, there is no doubt that the applicant was indeed entitled to the basic rent without his having to submit any proof other than the work order in this respect.
The answering respondent is hereby directed to collate the claim of the applicant afresh on the basis of the observations and include it in the list of operational creditors from which payments will be made by the successful Resolution applicant.
Application disposed off.
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2021 (7) TMI 1010
Liquidation process - demand of tax dues - requirement to pay the tax dues prior to the date of sale of the unit - eligibility to issue enlistment certificate - applicability of municipality by section 118 of the West Bengal Municipal Act and Audit and Accounts Rules, 1999 - requirement ot follow duties under section 55 of the Transfer of Property Act, 1882 - overriding effect of IBC or not - HELD THAT:- The Insolvency and Bankruptcy Code, 2016 is a self contained legislation. In cases of liquidation, through chapter III read with the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, the Code provides for a procedure of public announcement calling upon the stakeholders to submit their claims with the liquidator, who then consolidates, verifies and adjudicates upon it - In the present case, the liquidator had made the public announcement on 23.10.2017, however, the Respondent Nos. 2 and 3 did not file their claim with the liquidator. The Respondents cannot by-pass the provisions of the Code and hold the grant of licence or enlistment certificate ransom subject to the payment of their dues.
Under section 238, the Code also envisages that the provisions of the Code will override other laws. Therefore, the Respondent's reliance on the provisions of the Transfer of Property Act, 1882, West Bengal Municipal Act, 1993 and Audit and Accounts Rules, 1999 is misplaced.
The Applicants are not liable to pay the tax dues prior to the date of sale of the said unit i.e. 08.10.2020. The demand notice dated 01.02.2021 is not sustainable in law. The Respondent Nos. 2 and 3 are hereby directed to consider the application for grant of License or Enlistment Certificate and application for mutation of the said unit on its merit without being affected by the dues pending - Application allowed.
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2021 (7) TMI 1009
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - account of the corporate debtor was classified as NPA - valid power of attorney or not - time limitation - HELD THAT:- This case was adjourned from time to time on the ground that the issue of whether entries made in balance sheets amount to an acknowledgement of debt under section 18 of the Limitation Act, 1963 was pending before the Hon'ble Supreme Court.
Valid power of attorney or not - HELD THAT:- The plea regarding no valid power of attorney is not valid, On perusal as per clauses no. 10, 11 and 12 of the power of attorney mentioned that the applicant is authorized to initiate and prosecute insolvency proceedings by and on behalf of the bank. From the date of authorization to the applicant bank has never revoked the Power of Attorney. Hence, the question that the application is not authorized to file the present application does not arise.
Time Limitation - HELD THAT:- The other plea regarding the petition is barred by limitation is also not valid, On perusal of balance sheet and auditor's report it is noted that the corporate debtor, has itself acknowledged its liabilities. The recent judgment passed by the Hon'ble Supreme Court in "Asset Reconstructions Company India Limited Versus Bishal Jaiswal" [2021 (4) TMI 753 - SUPREME COURT] held that the entries made in the balance sheet of corporate debtor amount to an acknowledgement of debt under section 18 of Limitation Act, 1963 and, would extend the period of limitation.
It is also noted that the amount is due and payable and more than the threshold limit as prescribed under section 4 of the IB Code. The default has occurred. The question of limitation is also not arisen as seen from the record it proves that the CD has already acknowledged the debt in its balance sheet and auditor's report. Hence, considering the facts and circumstances of the case, we hold that the application filed u/s. 7 deserves to be admitted - name of IRP has also been proposed which is mandatory as per the Provision of IB Code, 2016, whose consent is on record.
The petition is admitted - moratorium declared.
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2021 (7) TMI 1002
Seeking declaration that respondent are entitled to claim any outstanding amount from the Applicant in respect of any due or amount payable - 'statutory charge' created in favour of the Respondents - effect of amendment to Section 32A of the IB Code, 2016, retrospective or not - HELD THAT:- The Hon'ble Supreme Court in GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR & ORS. [2021 (4) TMI 613 - SUPREME COURT] by clarifying the statutory amendment to Section 32A of the IB Code, 2016 has held that such amendment it clarificatory in nature and it ought to be given retrospective effect. Which means that such provision is made applicable from the date the Insolvency and Bankruptcy Code came in to effect, i.e. 1st December 2016. By taking in to consideration of the above settled legal position and by following the decision of the Hon'ble Supreme Court.
It is declared that all liabilities of the Corporate Debtor which were prior to CIRP and are prior to approval of the Resolution Plan and before transfer of the assets of the Corporate Debtor to the Resolution Applicant shall stand extinguished.
Application allowed.
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2021 (7) TMI 985
Liquidation process - J.M. Financial Asset Reconstruction Company Ltd. has been asserting rights on the basis of being part of Committee of Creditors and Financial Creditor of the Corporate Debtor - HELD THAT:- Application by the Adjudicating Authority, the same was dismissed as infructuous and period of CIRP was extended. In 9th CoC Meeting dated 10.09.2018, as plans received were not viable CoC again decided to file for Liquidation and I.A. No. 376 of 2018 was filed by Resolution Professional on 25th September, 2018.
Company Appeal (AT) (Ins.) No. 1219 of 2019 read with Company Appeal (AT) (Ins.) No. 1327 of 2019
Direction of refund of money to Dr. Tandon and others - Order/direction as may be issued by Competent Court in pending litigation - it is claimed that when the Adjudicating Authority accepted that Dr. Tandon and others were not financial Creditors and that their claim was time-barred, the Adjudicating Authority could not have directed the Resolution Professional to return the money as has been directed - HELD THAT:- It is claimed in state of Madhya Pradesh in view of Section 17(1) clause ‘f’ added Registration Act, 1908 document which purports or operates to effect any contract for sale of any immovable property is required to be compulsorily registered. Under Section 49 such document cannot be received as evidence of any transaction affecting the property. Dr. Tandon and others did not show copy of registered sale-deed to show that it was executed by authorized representative and thus they were not allottees of Real Estate Project. It is argued that Dr. Tandon and others could not be treated as Financial Creditors.
The Adjudicating Authority erred in not considering such documents and it came to the wrong conclusion that Dr. Tandon and others could not be treated as Financial Creditors. As per the amended definition of Section 5(8) which added the Explanation, Dr. Tandon and others were required to be treated as allottees to Real Estate Project and to have been treated accordingly - It was also error on the part of the Adjudicating Authority to state that agreement of sale was dated 31st March, 2012 and thus the claim was time22 Company Appeal (AT) (Ins.) No. 1176, 1203, 1219 & 1327 of 2019 barred.
Whether or not Corporate Debtor could have ultimately executed Sale Deed is not relevant in the facts of case read with provisions of IBC. Resolution Professional/Liquidator could not have asked Dr. Tandon & Ors. to first show No Objection of HUDCO or show document to prove that Mr. Amresh Pandya had authority without which the Resolution Professional outright refused to look into the document of Agreement to Sell which was coupled with huge amounts admittedly received in accounts of Corporate Debtor and reflected in Audited Returns - The Appellants in Company Appeal (AT) (Ins.) No. 1327 of 2019 are at liberty to request the Liquidator to act on the claim as they had filed during the period of CIRP or they may submit their fresh updated claim with the Liquidator under Regulation 18 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The Liquidator is directed to receive the same and act according to law.
Company Appeal (AT) (Ins.) No. 1203 of 2019
Refund of the advance given as security deposit - no lease deed was signed between the Corporate Debtor and the Appellant No. 2 even after the expiry of the period and the Corporate Debtor failed to hand over the shop to the Appellant No. 2 - HELD THAT:- Appellant Nos. 1 and 3 claimed to have registered lease deed in their favour executed in 2011 and both of them then claimed that subsequently they executed lease deed in favour of the Corporate Debtor for the same space for which they had entered into lease deed by other documents of leave and licence executed in 2013. Appellant Nos. 1 and 3 claimed that the said documents of leave and licence were in the nature of assured returns. Their claims appear to be in the nature of claiming rent. These Appellants have tried to draw parity with the case of Dr. Tandon and others where the document was of the Agreement to Sell. These Appellants cannot seek to be treated similarly with Dr. Tandon and others - Appellant Nos. 1 and 3 cannot be considered as Financial Creditors. As regards the Appellant No. 2, it is only a claim for return of security deposit for which already litigation was raised before the District Consumer Redressal Forum - the Adjudicating Authority rightly directed these Appellants to file their claims before the Liquidator.
Appeal stands disposed with direction to the Liquidator to receive the claims made by these Appellants (if not already made) and treat the same appropriately under the provisions of law.
Company Appeal (AT) (Ins.) No. 1176 of 2019
Seeking direction to set aside Liquidation order - HELD THAT:- Impugned Order shows that Section 7 of IBC Application in the matter was admitted on 14.09.2017. The Liquidation Order has been passed on 20th September, 2019. Clearly much more period than what Section 12 of IBC prescribes was consumed. The prayer of the Appellant to set aside the Liquidation Order for reasons stated against the Resolution Professional/Liquidator cannot be granted as in the set of facts Liquidation is the necessary consequence if in the time prescribed under Section 12 of IBC Resolution Plan has not become possible - As regards, averments made against the Resolution Professional/Liquidator, as IBBI which is the regulatory authority for Resolution Professionals has already been ceased of the matter we need not deliberate over those issues and leave them for IBBI - the appeal cannot be allowed.
Application disposed off.
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2021 (7) TMI 979
Dissolution of the Corporate Person - voluntary liquidation - Section 59(7) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- On the Petition filed by the Liquidator under sub-section 7 of Section 59 of the Code for dissolution of this Corporate Person, it is noticed that the affairs of the Corporate Person have been completely wound up and its assets are liquidated. This Corporate Person, through its Liquidator, voluntarily liquidated itself so as to get dissolved, therefore, this Corporate Person is dissolved directing the Liquidator to file this order with concerned Registrar of Companies and IBBI within 14 days thereof.
This Company Petition is allowed.
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2021 (7) TMI 947
Amount paid to the Interim Resolution Professional towards the CIRP Costs and the Fees - Appellant and the Corporate Debtor have already settled the dispute - Appellant and the Original Petitioner agreed that the Appellant will bear the CIRP Costs and the Fees of the IRP of the Corporate Debtor - HELD THAT:- When the Original Petitioner has admittedly already entered into settlement, it is inappropriate for the learned counsel for the Original Petitioner – Operational Creditor to now turn around and create doubts with regard to the amounts paid to the Resolution Professional. The Learned Counsel for the Original Petitioner is submitting that the Application was filed in capacity of Liquidator and as it is Liquidator it is answerable to stakeholders.
When willful execution of the settlement agreement dated 19th July, 2021 is not questioned and the documents itself show that the Appellant would be making necessary payments of the CIRP Costs and the Fees of Resolution Professional, the Original Applicant who is not making the payment can not now be seen as turning around to question the quantum of the CIRP expenses and Fees.
It is not convincing that the Learned Counsel for the Original Applicant is making out a case to look into the question of sufficiency or otherwise of the CIRP Costs and the Fees - appeal disposed off.
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2021 (7) TMI 940
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - HELD THAT:- It is not in dispute that the demand notice was sent through speed post to the address of the respondent-corporate debtor as mentioned in its master data and when the same was offered to deliver at the said address and when the same was unclaimed, it should be treated as a valid and proper delivery of the demand notice, as per the settled principles of law. Hence, this issue is decided in favour of the petitioner.
Whether the petitioner has proved the existence of an enforceable debt and the liability to pay the same by the corporate debtor? - HELD THAT:- It is not in dispute that the respondent-corporate debtor vide Annexure 5 warning notice has raised serious allegations of breach of the contract, malpractice, defective and substandard supply of machinery and threatened to revoke/cancel the contract between the parties. The petitioner failed to show the settlement of those disputes either before issuance of the demand notice or thereafter. In the absence of the same, it is to be concluded that there is a pre-existing dispute between the parties and that the CP is liable to be dismissed on this ground - there is no necessity to go into other allegations and counter allegations made in the CP.
Petition dismissed.
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2021 (7) TMI 938
Seeking to consider the resolution plan - seeking to set aside the impugned Form-G dated 21.02.2021 and for issuance of a fresh Form-G again - HELD THAT:- It is not in dispute that the object of the Code is maximization of the value of the assets of the corporate debtor. Hence, no prospective resolution applicant can object if the COC in its commercial wisdom rejects a particular resolution plan and in deciding to issue a fresh Form-G. The applicant though got an opportunity to submit a fresh resolution plan, and has chosen not to submit the same but on the other hand, filed the instant application.
It is to be seen that the resolution of the respondent-corporate debtor has already been delayed for substantial period due to various reasons including different long spells of lockdowns due to Pandemic Covid-19. It is not in the interest of the corporate debtor and any of its stakeholders to further delay the resolution process. The applicant having given consent to participate in the process in pursuance of the impugned Form-G dated 21.02.2021 cannot challenge the same - a short time is given to all the prospective resolution applicants including to the applicant to submit their resolution plans or revised resolution plans as the case may be within a specified time.
Application is disposed of by permitting the applicant and all other prospective resolution applicants to participate in the resolution process of the corporate debtor and to submit their fresh resolution plans/revised resolution plans within 10 days from today.
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2021 (7) TMI 876
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 - time limitation - HELD THAT:- It is evident from the Part 2 of Form 1 which has been filed by Financial Creditor that no date of default has been mentioned in the Form 1. Hence, on perusal of the application filed under section 7 of IBC, 2016, the date of default can be ascertained as 22.12.2014, the date on which the Corporate Debtor sent a mail to the financial Creditor accepting that the said project has been delayed and acknowledged the liability. Whereas, the financial Creditor has filed the present application under section 7 of IBC, 2016 on 21.11.2019.
The Present application filed under section 7 of the IBC, Code, 2016 fails the test of Limitation as far as the Code is concerned as it is clearly evident that the date of default i.e., 22.12.2014 had occurred over three years prior to the date of filing of application i.e., 21.11.2019, thus, the present application is time barred.
Petition dismissed.
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2021 (7) TMI 858
Appointment of Resolution Professional - Section 22 of the I&B Code - HELD THAT:- So far statutory provision as contained in Section 22 of the I&B Code which contemplates appointment of Resolution Professional and further replacement is concerned, this power can only be used when the ingredients of Section 22 is met - so far as the provision of Section 27 of ‘IB Code’ is concerned it contemplates with the Replacement of Resolution Professional by CoC. This power can only be used when the ingredients of Section is met.
In the facts of this case neither the ingredients of Section 22 & 27 of the Insolvency & Bankruptcy Code, 2016 is made out - Learned Adjudicating Authority is conscious of the fact that the Appellant herein could not provide leadership to CIRP proceedings and further there was clash between the Secured and Unsecured Creditors and timeline for CIRP proceedings was running out.
The Learned Adjudicating Authority have rightly exercise this power and there is no merit in the Appeal and is accordingly dismissed.
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2021 (7) TMI 857
Interest on delayed payment of sale consideration - delay on the part of the Respondent to pay balance sale consideration or not - refund of excess interest paid, due to the delay, for which respondent id responsible - can the burden of interest be fastened on the Respondent / Successful Bidder - process of sub-division of the land was restricted to the leasehold land and not to the other freehold land - HELD THAT:- The delay in payment of balance sale consideration in respect of leasehold land cannot be attributed to the Respondent. However, the Respondent is responsible in respect of delay in payment of balance sale consideration in respect of freehold land. Accordingly, the Appellant is directed to refund the excess interest deducted by him to the Respondent to the extent of leasehold land.
The impugned order is set aside - appeal disposed off.
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2021 (7) TMI 852
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - account was classified as NPA - time limitation - HELD THAT:- Although the NPA was declared in respect of Corporate Debtor in 2012, but the Corporate Debtor kept on acknowledging its Debt in its correspondence letters with the Bank and also the Respondent had made part payment of ₹ 10,00,000/- towards loan liability in the year 2017 while the present IB petition is filed in 2018. Hence it is found to be filed well within limitation.
Since the Respondent did not file its Reply/objection to the present IB petition, it goes uncontested. Hence the Debts which are more than Rs. One Lakh stands admitted and the default in making repayment of loan goes undisputed. Therefore the present IB petition is found to be filed in conformity with the provisions of the Code and rules, regulations made thereunder. Hence is found complete and CIRP can be triggered in respect of present Respondent. For the aforesaid reasons, the present IB petition deserves for Admission.
On perusal of the documents annexed with the IB petition it is found that the Respondent/Corporate Debtor has committed default in repayment of debt. The disbursement of loan amount is substantiated by the Statement of accounts of the Petitioner. The Liability of the Respondent Corporate Debtor is also reflected in ledger account of the Respondent in the books of the Petitioner. Therefore it is a fit case where the CIRP can be triggered in respect of the present Corporate Debtor.
Petition admitted - moratorium declared.
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2021 (7) TMI 816
Validity of admission of application u/s 7 of IBC - entire loan transaction is based on the 'Term Loan Agreement' - inadequately stamped document - admissible in evidence or not - debt and default have been proved beyond doubt - HELD THAT:- Based on the documents filed by the Financial Creditor, it is clear that the Financial Creditor has proved that the Corporate Debtor has defaulted in making the payment is 6,39,13,042 due on the Corporate Debtor. Therefore, if it is considered that the Term Loan Agreement is insufficiently stamped for argument sake, then it is inadmissible in evidence. Furthermore, the claim of the Financial Creditor is fully corroborated by other evidence filed - Corporate Debtor committed default in repayment of the loan amount to the Financial Creditor. Hence its loan account was declared as NPA. In light of facts and circumstances, debt and default are reasonably established by the Financial Creditor - the Application filed by the Financial Creditor under Sub-section (4) of Section 7 of the Insolvency and Bankruptcy Code 2016 was complete in all respects. Therefore, the Adjudicating Authority admitted the petition filed under Section 7 of the Code.
The objections raised by the Appellant/Corporate Debtor are unsustainable. First, the Appellant emphasised the alleged insufficiently stamped Term Loan Agreement. However, in addition to the Term Loan Agreement, the Financial Creditor relies on Demand Promissory Note, Hypothecation letter regarding depositing of title deed, a certified copy of the bank statement, and so many other documents filed along with the Application - Therefore, even if it is considered that the Term Loan Agreement is insufficiently stamped and it cannot be accepted in evidence, then also alleged debt and default are proved beyond doubt. Furthermore, the Application filed under Section 7 is complete.
The Appeal is dismissed.
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2021 (7) TMI 815
Liquidation process - duty of liquidator to determine claim as submitted in Form G by “Other Stakeholder” - counter claim being made by the Corporate Debtor was rejected - HELD THAT:- As per Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, the Liquidator was required to process the claims submitted in Form ‘G’ by the Appellant as claim by “Other Stakeholder”. Regulation 20 provides for processing of claims by other stakeholders and the Appellant was required to prove its claim inter alia on the basis of relevant documents which adequately establish the claim. Under Regulation 23, the Liquidator has power and duty to call for such other evidence or clarification as he deems fit from a claimant for substantiating the whole or part of its claim - Regulation 28 even makes provisions for contingencies where debt is payable at future time and Regulation 29 provides for Mutual Credits and set-off.
The Liquidator has avoided performing the duty as was required to be performed under the ‘I&B Code’ and the Regulations. We accept the submission of the Learned ASG that the Liquidator was required to look into the Award of Adjudicator and look into the documents and come to the ‘best estimate’ and give the benefit to the Appellant.
The Liquidator is directed to take steps as mentioned in this judgment and process claim of the Appellant as ‘other creditor’ and arrive at best estimate of the amount of claim made by the Appellant and give the necessary benefit to the Appellant - appeal disposed off.
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2021 (7) TMI 778
Rejection of restructuring plan - Restructuring of debt - rejection due to delay in issuance of tariff plan - outstanding dues on supply of generated power to the WBSEDCL - identification of Stressed Assets - Case of petitioner is that cancellation of the restructuring plan was never communicated formally to the petitioner - formal recall notice of the loans and advances was never issued by the respondent - HELD THAT:- Merely because an instrumentality of State is engaged in business it cannot be put to any more disadvantage than a private player. The State cannot also be required to grant concessions outside the contract and outside what a private player would ordinarily be required to give. Under the garb of requiring fairness in action even State business entities cannot be imposed with terms & conditions for non-commercial considerations - One must note that the State entities are required to compete with private corporations who are far too quick & opportunistic in commercial matters. While it is indeed true that a State instrumentality is expected to act fairly and in a non-arbitrary manner, the PFC & REC are also driven by a profit motive and their functions cannot be fettered to drive them towards financial disadvantage. This would lead to their ruin & endanger large number of other power companies and persons dependent on them.
Any restructuring proposal or contract like a loan contract is time bound. Time is the essence of such contract. The Petitioners should have known this while accepting the restructuring proposal. The Petitioners did not appear serious about benefitting from the restructuring proposal and the same was a subterfuge to delay the inevitable consequences of its financial failure - The petitioners cannot be allowed to use the model code of conduct, as a rule to cover up their own omissions. The petitioners have not demonstrated that they have fulfilled the conditions of the Initial DSRA or the main DSRA. The petitioner could not have any legitimate expectation of continuation of the restructuring proposal indefinitely.
The omissions and failures of the petitioners were duly recorded in the minutes of meeting dated 17th February, 2021, there was substantial notice of cancellation of restructuring proposal. No prejudice could therefore have been caused to the petitioners by non-issuance of a formal recall notice of the loans or cancellation of restructuring proposal.
The Petitioners have not been able to indicate exactly which Directions has been violated or has not been followed by the REC and PFC - The 2019 Directions appear to have been referred to in a desperate attempt to attract cause of action under Art. 226. The petitioners were afforded a restructuring proposal essentially by reason of the 2019 Directions and could not take advantage thereof. There is some doubt as to whether the Directions have statutory or binding force.
This Court therefore finds no arbitrariness or unfairness in the actions of the respondent no. 3 and 4. There is no violation of Article 14 of the Constitution of India. No violation of Natural Justice is found - this Court is of the view that the disputes between the writ petitioners and the respondent nos.3 and 4 cannot be entertained or decided in the writ jurisdiction of the High Court under Article 226 of the Constitution of India.
Petition dismissed.
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2021 (7) TMI 754
CIRP process - financial creditor or operational creditor - inclusion/exclusion of appellant form CoC - Initially was treated as Financial Creditor but later on was treated as Operational Creditor - grievance of the Appellant is that the Appellant had been excluded from CoC on that day and was not allowed to participate - HELD THAT:- In the present matter, the Appellant was earlier treated as Financial Creditor for the dues claimed by Appellant but later on the Appellant has been treated as Operational Creditor.
Order dated 25.11.2019 of the Adjudicating Authority directed the Resolution Professional to consider if debt of Appellant is a Financial Debt and place it before CoC. He did this in 6th CoC Meeting. On the face of it the Lease Deed does not appear to be Financial Lease. As the Resolution Plan is stated to be already approved, when it appears that the Appellant is not a Financial Creditor, we do not wish to go into the technicalities of the manner in which it was excluded from the CoC.
The grievance appears to be because orders with regard to excluding UCO Bank was not passed. The Respondent No. 1 does not appear to have filed any appeal against the impugned order in that regard and thus we would not give much indulgence to Respondent No. 1.
The appeal is dismissed.
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