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Insolvency and Bankruptcy - Case Laws
Showing 1 to 20 of 77 Records
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2023 (3) TMI 1477
Seeking Leave, to prefer an Appeal, against the Impugned Order - Person, who is not a Party, to the Original Proceedings, can prefer an Appeal or not - petitioner contends that in deciding, whether a Leave, must be granted, an Application / Appeal, ought to be taken on Demurrer, and the merits of the matter, cannot be gone into, for the sake of determining an Application, praying for Leave? - Section 61 (3) of the I & B Code, 2016 - HELD THAT:- It is pertinently pointed out that the 1st Respondent / Petitioner, had filed an application, before the Adjudicating Authority (‘Tribunal’), as per Section 60(5) of the I & B Code, 2016, read with Regulations 32A (e), seeking Sale’ of the ‘Corporate Debtor, as a Going Concern, through a Private Sale, along with other Reliefs. Indeed, the 2nd Respondent (G C Logistics India Private Ltd. / Buyer), is arrayed as a Party, in the said Application.
It transpires that the Petitioner / Shareholder of the Corporate Debtor, was not part of the Stakeholders Consultation Committee, and in fact, there is no obligation, on the part of the 1st Respondent / Liquidator, to consult the Petitioner / Appellant, for any reason - It cannot be ignored, that the Petitioner / Appellant, had not filed any Claim Form, in Form – G, during Liquidation Period. In terms of Regulation 20 of the IBBI (Liquidation Process) Regulations, 2016, the Petitioner, has no connection to the Liquidation Process, and later to the Sale of the Corporate Debtor.
In the instant case, the Petitioner / Appellant, was not in a position to prove that he is an Individual, eligible to regain control of the Corporate Debtor, there being no disqualification, as per Section 29A of the I & B Code, 2016 - As a matter of fact, a Scheme, was put before the Stakeholders Consultation Committee Members, in their 9th Meeting, dated 30.10.2021 and a Secured Creditors meeting, was conducted by the 1st Respondent / Liquidator, to consider the Proposal, as per Section 230 of the Companies Act, 2013. In fact, the Petitioner / Appellant, was informed that the Proposal Terms, were not acceptable, by the Stakeholders Consultation Committee and the Secured Creditors.
Keeping in mind of a candid fact that the Petitioner / Appellant, is not, a Stakeholder in the Liquidation Process of the Corporate Debtor, and has no vested interest in the Corporate Debtor, taking note of the fact that the Payment Consideration of Rs.44,64,00,000/- and the same was distributed, as per Section 53 of the I & B Code, 2016, comes to a conclusion that the Leave, prayed for, by the Petitioner / Appellant, to prefer the present Company appeal is not accorded to, by this Tribunal, based on the facts and surrounding circumstances of the case, which float on the surface.
Appeal dismissed.
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2023 (3) TMI 1476
Auction of the Corporate Debtor as a going concern - lease deed continues in the name of Corporate Debtor - sale of shares of corporate debtor - HELD THAT:- There is no dispute between the parties that there was a lease by the Chandigarh Administration and the auction of the Corporate Debtor was proposed as going concern. The letter dated 06th May, 2019 referred to by the Learned Counsel for the Appellant was issued by the Chandigarh Administration where mention was made regarding the amount chargeable on account of transfer fees.
Respondent submits that present is a case where lease deed continues in the name of Corporate Debtor hence what is sold is the shares of the corporate debtor - There are no error in the carrying out auction of the corporate debtor as going concern.
Further submission is that under Regulation 32A sub-clause 4, auction did not take place within 90 days. It is not denied that auction sale notice was issued initially prior to the insertion of provision of Regulation 32A, hence the auction, regulation 32A sub-clause (4) cannot be pressed in service.
Thus, no ground has been made to interfere with the Impugned Order - appeal dismissed.
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2023 (3) TMI 1449
Principles of natural justice - Resolution Plan already approved during the pendency of this Application - Applicant/Appellant was not given opportunity to meet the Chairman-cum-Managing Director, who is the Competent Authority for considering the proposal of the Applicant/Appellant who is an MSME - HELD THAT:- This Court is of the opinion that the impugned order has already granted the liberty to the appellant to approach the National Company Law Tribunal (NCLT) - In case such a course is adopted, the respondents shall not object to the consideration by the NCLT only on the ground of jurisdiction.
The civil appeal is disposed of
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2023 (3) TMI 1439
Removal of RP - expunging remarks against CoC as well as RP - it was held by NCLAT that though some of the respondents were allowed to participate in 1st CoC Meeting subsequently without prior approval of the Adjudicating Authority they were restrained from participating in the proceeding. Similarly number of other irregularities were committed by the RP. In such situation it was imperative for the Adjudicating Authority to pass order for removal of the RP by the impugned order.
HELD THAT:- There are no error in the order of the National Company Law Appellate Tribunal in [2022 (12) TMI 499 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] - appeal dismissed.
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2023 (3) TMI 1411
Seeking grant of relief to file main appeal - Approval of Resolution Plan - privy to resolution Plan - Petitioner/Appellant submit that he is a Third Party, to the impugned order passed by the Adjudicating Authority (Tribunal) - also, Prospective Resolution Applicants, who had suffered, due to the 'Resolution Process' - HELD THAT:- This Tribunal keeping in mind of a vital fact that the Petitioner/Appellant, being an Unsuccessful Resolution Applicant, has no Locus, to assail a Resolution Plan or its implementation, coupled with a candid fact that he is not a Stakeholder, as per Section 31 (1) of the I & B Code, 2016, in relation to the Corporate Debtor, this Tribunal, without any haziness, holds that the Petitioner/Appellant, is not an Aggrieved Person, coming within the ambit of Section 61 (1) of the I & B Code, 2016, especially, when he is not a Privy, to the Resolution Plan.
Application dismissed.
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2023 (3) TMI 1407
Seeking permission to withdraw the appeal with a liberty that if occasion arises, he may be permitted to apply for extension of time - HELD THAT:- The civil appeal is dismissed as withdrawn.
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2023 (3) TMI 1406
Extension of time period or not - One Time Settlement (OTS) proposal - applicability of time limitation to IBC proceedings - section 7 application filed within time limitation or not - HELD THAT:- This letter for OTS proposal clearly acknowledges and accepts the jural relationship between the appellant - Bank of India as creditor and the Corporate Debtor/respondent no.3 - M/s Radheshyam Agro Products Pvt. Ltd. as the debtor. The letter clearly accepts that the Corporate Debtor/respondent no.3 - M/s Radheshyam Agro Products Pvt. Ltd. was sanctioned principal amount of Rs.37 crores, and that repayment in various forms to the extent of Rs. 19 crores stands made. Thus, acknowledging that there was substantial liability due and payable towards the principal amount.
Section 18 of the Limitation Act requires that the words used in the purported acknowledgement must indicate the existence of a jural relationship and the statement should be made with the intention of admitting the jural relationship - However, such acknowledgment, for the purpose of Section 18 of the IBC, need not be accompanied with a promise to pay, whether expressly or by implication; and simple admission of the debt is sufficient.
In M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK & ANR. [2017 (9) TMI 58 - SUPREME COURT] it has been held that the Adjudicating Authority, while considering an application under Section 7 of the IBC, is only required to see if there is an existence of debt and default. Any dispute with regard to the quantum of debt is immaterial. For this purpose, the Adjudicating Authority should see the records of information utility or other evidence produced by the financial creditor.
It is accepted that the OTS proposal is within three years from the date the debt was declared to be NPA i.e. on 30.09.2014.
Thus, the provisions of Section 18 of the Limitation Act are attracted and applicable. The period of limitation would get extended in view of the OTS proposal submitted by the Corporate Debtor/respondent no.3 - M/s Radheshyam Agro Products Pvt. Ltd. vide the letter dated 01.06.2016.
Thus, it is held that the application under Section 7 of the IBC filed by the appellant - Bank of India against the Corporate Debtor/respondent no.3 has been filed within the prescribed period of limitation - appeal allowed.
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2023 (3) TMI 1388
Fraudulent/Preferential transaction - Validity of application filed by the Liquidator of the Corporate Debtor - direction not to disturb the possession or interfere with the leasehold right of M/s Indore Steel & Alloys Pvt. Ltd. (present Respondent No.1) and Tin shed on the leasehold land - whether the transfer of subject land by MPIDCL to Respondent No.1 has been executed in accordance with law? - whether there is any merit in the claim of the Appellant that the transaction was not done in good faith but was a fraudulent and a preferential transaction?
HELD THAT:- The Adjudicating Authority has returned the finding that in terms of the sale deed executed by MPFC in favour of the Corporate Debtor, the latter was required to get the lease executed in its favor within a period of six months from the date of execution of the sale deed failing which MPIDCL would have the right to cancel the lease and allot the subject land to other applicants. Cognizance has also been taken by the Adjudicating Authority of MP Rules, 2019 providing for automatic cancellation of the lease if the purchaser after purchase of the land fails to get the lease executed in its favor - The Adjudicating Authority has held that ISAPL has thus legally and validly acquired leasehold ownership rights and possession over the subject land directly from the MPIDCL and not from the corporate debtor. Holding that ISAPL is the perpetual lessee of the subject land, the impugned order also notes that this transaction between ISAPL and MPIDCL does not fall within the purview of Sections 43, 49, and 66 of the IBC.
It is noticed from the facts of the present case that the corporate debtor in spite of being aware that it was under obligation to get the lease deed of 23.02.2010 executed in its favour, failing which MPIDCL was free to further allot the subject land, never got the lease deed executed by MPIDCL despite lapse of 10 years. Hence, in terms of para 6 of the sale deed, the leasehold right of the corporate debtor over the subject land had clearly lapsed. We do not find any mala-fide or perversity on the part of Respondent No.6 in their understanding or appreciation of MP Rules and application of Clause 6 of the sale deed executed with the Corporate Debtor. In the given circumstances, MPIDCL being a wholly owned subsidiary of the State Government of Madhya Pradesh and bound by the MP Rules, 2019, there is no error in the findings of the Adjudicating Authority that MPIDCL was fully authorized, being the owner of the subject land, to execute the lease deed in favour of Respondent No.1.
It has also been contended by the Learned Counsel for the Appellant it is not MPIDCL which had cancelled the lease or re-auctioned on its own but it was occasioned by a joint application filed by PTL and ISAPL before MPIDCL. The role of suspended management in aiding, abetting and prompting the transfer of subject land and that PTL was used by them as an illegal conduit to commit fraud on the creditors of the Corporate Debtor has also been raised by the Appellant - the contention of the Respondents agreed that the transaction between ISAPL and PTL related to purchase of Tin shed while the transaction between ISAPL and MPIDCL was for lease rights over the subject land and that both transactions were separate and not connected.
It has also been contended by the Respondents that the fact that the corporate debtor did not acquire ownership rights over the said land is substantiated by the fact that the lease deed entered into between Respondent No.1/ISAPL and MPIDCL was an amendment of the original lease deed of PCPL dated 07.02.1987 for the remaining lease period. This clearly shows that MPIDCL had never executed any lease deed in favour of the corporate debtor or else it would have had to modify or amend the lease deed signed with them and not with PCPL while transferring the leasehold rights for the remaining period to Respondent No.1.
This brings us to the contention of the Appellant that the ex-management by not getting the name changed in the lease deed in favour of the Corporate Debtor in 2010 used this fact as a loophole to transfer the leasehold rights in favour of Respondent No.1 and that this amounts to conducting fraudulent transaction - The negligence on the part of the Corporate Debtor not to have executed the lease deed cannot be overlooked and cannot be allowed to become a ruse for fraudulent transaction. Mere possibility of a potential collusion without material on record is not sufficient to persuade this Bench to record any finding on preferential or fraudulent transaction. The present transaction between MPIDCL and the ISAPL/Respondent No. 1 not being illegal nor suffering from any procedural or material irregularities, we are satisfied with the findings of the Adjudicating Authority that it is not open to the Appellant to unsettle or derail the transaction by raising the bogey of Section 43, 49 and 66 of IBC or to disturb the possession or interfere with the leasehold right of ISAPL.
There are no illegality in the impugned order of the Adjudicating Authority which may warrant any interference in the exercise of our appellate jurisdiction. There is no merit in the appeal - appeal dismissed.
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2023 (3) TMI 1381
Seeking rejection of the Resolution Plan and the liquidation of SHPL - it is alleged that the plan could not have dealt with land belonging to the municipal corporation without its prior approval under Sections 92 and 92-A of the Mumbai Municipal Corporation Act (MMC Act) 1988 - termination of contract agreement and no lease was ever executed in respect of the land belonging to MCGM in favour of SHPL.
Whether the High Court of Andhra Pradesh was justified in entertaining the PIL and issuing an interim order?
HELD THAT:- The appellant would have been relegated to pursue the objection to the maintainability of the PIL before the High Court. However, it is evident that this course of action need not be followed for the simple reason that the PIL was a complete abuse of process.
The IBC provides forums and remedies. In the exercise of the jurisdiction conferred by Section 60(5), MCGM has moved the NCLT contending that the land in question which is situated at Mumbai cannot be included as a part of the assets of the Corporate Debtor. Since the application is pending before the NCLT, no opinion to be expressed on it. The provisions of the IBC were invoked for initiating the CIRP in respect of the Corporate Debtor. The first respondent who had evidently no locus in the proceedings chose to move a PIL ostensibly on the ground that he was seeking to safeguard the facility of the hospital for the benefit of the residents of Mumbai.
The High Court should have rejected the PIL at the very threshold. It is apparent that the PIL was only intended to thwart the process which has been initiated under the IBC. The PIL was evidently motivated by extraneous considerations and should have been dismissed.
Since the limited ambit of these proceedings relates to the recourse which was taken to the jurisdiction under Article 226 of the Constitution by the first respondent, no opinion expressed on the merits of the rights and contentions of the parties in the proceedings which are pending before the NCLT - recourse to the jurisdiction of the High Court under Article 226 of the Constitution in the form of a PIL constituted an abuse of process.
Petition dismissed.
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2023 (3) TMI 1333
Initiation of CIRP - Priority of consideration and admission of application - Effect of Interim Moratorium - It is the main case of the Appellant that the Section 95 Application was filed by them three days prior to the date when the State Bank of India, had filed their Application and therefore their Application, ought to have been admitted first - whether Interim Moratorium, ought to have commenced from the date of filing of the defective Application, as it would amount to violation of natural justice?
HELD THAT:- It is seen from the Record that the Adjudicating Authority, has not yet admitted or rejected the Application, filed by the State Bank of India, under Section 95.
It is seen from the record that the Section 95 Application has not been admitted against the said Personal Guarantor. Liberty has also been given in accordance with law to the Appellant/Union Bank of India in the Impugned Order dated 07.06.2022 in the event that the Section 95 Application filed by SBI is admitted, the Adjudicating Authority under Section 102 of the Code would issue a Public Notice within 7 days of passing of the Order inviting Claims from all the Creditors. The Appellant in the instant case namely Union Bank of India, can also file their Claim under Section 103 of the Code with the RP. Hence, no prejudice would be caused to the Appellant herein. Further, it is seen from the Impugned Order that though both the Counsels were present, it was not brought to the notice of the Bench that the Application, filed by the Appellant/Union Bank of India, was three days prior to the Application, filed by the SBI.
This Tribunal, is of the considered view that indeed, the Date of Filing of the Application, under Section 95 is, what is to be taken into account and not the date when the Application is numbered. There is no appreciable evidence on record to state that the said Application was defective - in the present case, though the Section 95 Application was filed on 31.12.2021 and was assigned a Registration No. and SBI had filed an Application on 03.01.2022, the Registry, had registered the Section 95 Application of SBI, on 12.01.2022 and that of Union Bank of India on 09.02.2022. Though the Appellants’ Section 95 Application came up ‘for Hearing’ on 04.03.2022, 01.04.2022, 02.05.2022 and on 07.06.2022, a perusal of the Order copies establishes that the Appellant/Union Bank of India, had never brought to the notice of the Bench that another Application, was also filed by SBI. The case of the Appellant that they had no opportunity, to bring to the notice of the Bench that the Appellant’s Section 95 Application was filed in prior point of time i.e., three days prior to the SBI’s Application, is untenable.
Section 96(1)(a) provides that an interim-moratorium, shall commence on the date of the Application, in relation to all the debts. Section 96(1)(b) of the Code, also specifies that during the Moratorium period (i) any legal action or proceeding pending in respect of any debt shall be deemed to have been stayed; and (ii) the Creditors of the Debtor, shall not initiate any legal action or proceedings in respect of any debt - when an Insolvency Resolution Process, commences against the Personal Guarantor, all Creditors of the Personal Guarantor, are taken care of in the proceedings under Chapter-III. The Code does not contemplate multiplicity of Applications, against the same Personal Guarantor. This Tribunal, is of the earnest view that when the Insolvency Resolution Process, commences against a Personal Guarantor, Claims of all Creditors, are taken care of under the scheme of the I & B Code, 2016.
Keeping in view that the Order of Admission, has not yet been passed by the Adjudicating Authority, and also that no prejudice would be caused to the Appellant herein, as they can file their Claim, with the Resolution Professional, and also having regard to the fact that they were given Liberty, in accordance with Law by the Adjudicating Authority, this Tribunal, is not inclined to set the clock back on this ground.
Application dismissed.
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2023 (3) TMI 1285
Seeking withdrawal of CIRP under section 12A of Insolvency and Bankruptcy Code, 2016 - appeal was preferred against the admission order before the National Company Law Appellate Tribunal (NCLAT) apparently on the ground that section 9 of IBC petition was not maintainable as there was a pre-existing dispute - HELD THAT:- Regulation 30A of IBBI Regulations was introduced after insertion of section 12A in IBC. It provided the mechanism of dealing with applications filed for withdrawal. Later on, it was substituted by notification dated 25.07.2019 in IBBI Regulations. According to the said provision, withdrawal under section 12A of IBC could be moved before Adjudicating Authority by the applicant through IRP before constitution of the CoC and in case the CoC has been constituted, then also by the applicant through IRP or the RP. However, the applicant would be required to justify the withdrawal by giving reasons. It further provides the procedure for dealing with such an application.
The application had been filed prior to the constitution of the CoC. The settlement had been arrived at within two days of the admission order. The payment as per the settlement had been made within the next five days i.e. in a weeks’ time from the date of admission. The application for withdrawal was filed on the 10th day. The NCLT ought to have immediately taken the decision on the application. Once the parties had settled the dispute even before the CoC had been constituted, the application ought to have been allowed then and there rather than await the other creditors to jump into the fray and allow the IRP to proceed further.
Alternative Remedy - HELD THAT:- Plea of alternative remedy is a self-imposed restriction by the superior Courts and is never an absolute bar unless barred by the statute. Further, in the present case, this Court had entertained the SLP in 2021 itself and had granted an order of status quo on 20.04.2021. Substantial time has passed since then. As such we are not inclined to entertain the said objection relating to availability of alternative remedy of filing the appeal before the NCLT.
Violation of the Moratorium - HELD THAT:- The intervenors have vehemently contended that after 01.03.2021, once the NCLT has admitted the petition and had issued restraint order, section 14 of IBC had come into play; the transactions made in the accounts of the CD would be unlawful and illegal as such payment of the settlement amount from the funds of the CD transferred to the account of the suspended Director after 01.03.2021 ought to be rejected and no discretion should be exercised permitting withdrawal of the proceedings. In this respect, it would suffice to state that even the NCLT was not satisfied with the said submission of the IRP and has not approved the same. Secondly, even if there was any transaction from the account of the CD, the same may at best be held to be a wrongful transaction and in any other proceedings where CIRP is initiated the amount so transferred could be recovered under section 66 of IBC by the IRP or the RP subject to establishing that the said transactions would be hit by the said provision.
Multiple claims of OCs - HELD THAT:- It only needs to be mentioned that other creditors would have their own right to avail such legal remedies as may be available to them under law with respect to their claims. The rights of the creditors for their respective claims do not get whittled down or adversely affected if the settlement with the OC in the present case is accepted and the proceedings allowed to be withdrawn.
Claims for expenses for IRP - HELD THAT:- Any amount spent by the IRP legally admissible to him could always be recovered in the same proceedings and the NCLT or the Adjudicating Authority would be well within its power to get the same cleared under Clause 7 of Regulation 30A of IBBI Regulations.
Section 12A of IBC permits withdrawal of applications admitted under sections 7, 9 and 10 of IBC. It permits withdrawal of such applications with approval of 90 percent voting share of CoC in such manner as may be specified. The role of CoC and 90 percent of its voting share approving the said withdrawal would come into play only when CoC has been constituted. Section 12A did not specifically mention withdrawal of such applications where CoC had not been constituted but at the same time it does not debar entertaining applications for withdrawal even before constitution of CoC. Therefore, the application under section 12A for withdrawal cannot be said to be kept pending for constitution of CoC, even where such application was filed before constitution of CoC - The substituted Regulation 30A of IBC as it stands today clearly provided for withdrawal applications being entertained before constitution of CoC. It does not in any way conflicts or is in violation of section 12A of IBC. There is no inconsistency in the two provisions. It only furthers the cause introduced vide section 12A of IBC. Thus, NCLT fell in error in taking a contrary view.
Regulation 30A of IBBI Regulations provide a complete mechanism for dealing with the applications filed under such provision. The issue raised by the IRP regarding its claim for expenses is well taken care of under the said provision. Various safeguards have been provided in Regulation 30A of IBBI Regulations to be fulfilled by the OC which apparently have been fulfilled as there is no complaint in that regard either by the IRP nor it is apparent from the impugned order of the NCLT. Thus, the objection raised by the IRP does not merit any consideration in this appeal.
The impugned order of the NCLT cannot be sustained. The application filed under Regulation 30A of IBBI Regulations deserves to be allowed - Appeal allowed.
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2023 (3) TMI 1284
Seeking release of pending amount (for work done prior to CIRP period or not) - it is construed that the Company, had received the money from the Employer and the same is due to be transferred to the Appellant herein - whether the work was executed prior to the initiation of CIRP? - HELD THAT:- As per the terms of the I & B Code, 2016, for any work done prior to the CIRP period, and for amounts pending in relation to the same, the Creditor, is required to file its Claim, with the Resolution Professional or the Liquidator, as the case may be. In the instant case, the Appellant, had filed the Form C for Admission of the Claim, in relation to the pending amount 26.08.2019, one day after the last date for submission of the claim. The Liquidator had sent an email that the claim submitted by the Appellant, cannot be considered by the Liquidator as it is filed after the expiry of the last date for submission of the ‘Claim’.
The Application I.A. No. 454 of 2020 pertains to release of the Pending Amount, and not in relation to the Admission of the Claim, filed by the Appellant, for the Condonation of the Delay. Therefore, this Tribunal, is of the considered view that there are no substantial grounds to interfere with the impugned Order dated 27.08.2021, whereby and whereunder, the Adjudicating Authority, had directed the Liquidator, to admit the Appellant’s Claim and make the payment as per Section 53 of IBC, 2016.
Appeal dismissed.
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2023 (3) TMI 1283
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - date of default - main case of the Appellant is that the previous Order of this Tribunal is dated 09.09.2021, whereby and whereunder six months time was granted and the same ended on 09.03.2022 and this date of 09.03.2022, cannot be taken as the Date of Default - HELD THAT:- It is seen from the record that there is correspondence dated 14.01.2022 and OTS Letter dated 27.11.2019. Apart from the fact that the issue of Limitation, is already answered in the previous Order and has attained finality, this Tribunal, is of the considered view that, it is not the Date of NPA, which is 30.09.2015, which is to be taken into consideration, keeping in view the facts of the attendant case, but rather, it is the Date of Default, which is six months, subsequent to the time given by this Tribunal, in the Order dated 09.09.2021, that is to be considered.
This Tribunal, does not have any Equity Jurisdiction, and also conscious and alive to the candid fact that more than sufficient/ ample time, was extended to the Corporate Debtor. Besides that, the Debt and Default, are clearly demarcated in Para-IV of the Section 7 Application of the I & B Code, 2016, in CP (IBC) 46/KOB/2022, and the available material on record establishes the same. Viewed in that perspective, this Tribunal, does not find any ground, much less a valid ground, to interfere in the well considered and reasoned order of the Adjudicating Authority / Tribunal.
Appeal dismissed.
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2023 (3) TMI 1282
Approval of Resolution Plan - actions of the Resolution Professional and the CoC are consistent with the NCLAT order or not - HELD THAT:- On looking into order dated 18.01.2023 passed by this Tribunal, it is clear that this Tribunal directed the Resolution Professional to initiate fresh voting process on the Resolution Plans received in the process which was to be completed within a month. The Adjudicating Authority has noticed that in pursuance of the order dated 18.01.2023, all the Resolution Plans were put before the CoC in its meeting dated 25.01.2023 and voting result was declared in its meeting dated 10.02.2023 where all plans were rejected by voting share of 89.10% and it was decided by the CoC to issue fresh RFRP.
Consideration of all Resolution Plans and voting on the plans by the CoC as per direction of this Tribunal dated 18.01.2023 cannot be said to be non-compliance of order of this Tribunal. When none of the Resolution Plans was approved, the CoC under the CIRP Regulations was empowered to issue fresh RFRP. There are no error in the order of the Adjudicating Authority refusing the prayers of the Appellant to reissue RFRP and reinitiate the voting process.
The present Appeal arise out of the order dated 20.02.2023 by which I.A. No. 602/2023 was rejected, by which Appellant was challenging the RFRP issued on 10.02.2023. Subsequent events which took place after 10.02.2023 are not subject matter of this Appeal and needs no consideration by this Tribunal. Learned counsel for the Appellant submitted that Resolution Professional has already filed an I.A. No. 791/2023 before the Adjudicating Authority for approval of a Resolution Plan. It is open for the Appellant to file an appropriate application/objection in I.A. No. 791/2023, the issues raised by the Appellant subsequent to 10.02.2023 need no consideration.
Appeal dismissed.
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2023 (3) TMI 1281
Condonation of delay for four days in filing of the appeal - Appellant was in jail and was not keeping well and admitted in the jail hospital - Sufficient cause for delay or not - whether the delay caused in filing of the appeal much beyond the period of 45 days can be condoned by this Tribunal? - HELD THAT:- Section 61(1) provides for a right of appeal to an aggrieved person. Section 61(2) provides a period of limitation 30 days for preferring an appeal in terms of Section 61(1) before the Appellate Authority. Section 61(2) proviso provides another period of 15 days which can be extended in case the Appellant satisfies the Appellate Authority about the existence of a sufficient cause for not filing the appeal in time. There is no further provision in the Code for looking into the aspect of condonation of delay beyond the period of 15 days much less 45 days.
In the case of NATIONAL SPOT EXCHANGE LIMITED VERSUS MR. ANIL KOHLI, RESOLUTION PROFESSIONAL FOR DUNAR FOODS LIMITED [2021 (9) TMI 1156 - SUPREME COURT] the Hon’ble Supreme Court has held that considering the statutory provisions which provide that delay beyond 15 days in preferring the appeal is uncondonable, the same cannot be condoned even in exercise of powers under Article 142 of the Constitution.
Thus, it is clear that there is no scope for condonation of delay beyond the period of 15 days much less 45 days as there is no window available for this Tribunal to exercise its jurisdiction for condonation of delay - application dismissed.
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2023 (3) TMI 1279
Payment of Electricity dues during CIRP period - application rejected since the electricity Department cannot use the non-payment of pre-CIRP dues for disconnecting the electricity - HELD THAT:- There can’t be any dispute that the Appellant/Monitoring Professional/Resolution Professional were liable to make the payment of the dues during the CIRP period, which according to Appellant stood paid.
It is observed that in the event any amount is still due with regard to the electricity dues during the CIRP, it shall be open for the Department to issue bill and realise the same. It is further made clear that R-1 having not filed any claim in the CIRP regarding pre-CIRP dues, it is not entitled to recover the pre-CIRP dues and on non-payment of the said amount, to disconnect the electricity. The prayers made in the application does not require any consideration.
Appeal disposed off.
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2023 (3) TMI 1278
Condonation of delay of 15 days (beyond the period of entire 45 days) in filing appeal - delay caused on medical grounds - sufficient cause or not - HELD THAT:- As per Section 61(1) any person aggrieved by the order of the Adjudicating Authority under this part may file an appeal to the Appellate Tribunal. As per Section 61(2) every appeal which is to be filed under Section 61(1) has to be filed within 30 days before the Appellate Tribunal. As per 61(2) proviso the Appellate Tribunal has the jurisdiction to extend the period of 15 days if it is satisfied that there is a sufficient cause for not filing the appeal within the prescribed time - The present appeal has been filed beyond the period of 45 days i.e. a period of 30 days provided in Section 61(1) and 15 days provided in proviso to Section 61(2).
Reliance placed upon two judgments of the Hon’ble Supreme Court in the case of V. Nagarajan Vs. SKS Ispat and Power Limited [[2021 (10) TMI 941 - SUPREME COURT]] and National Spot Exchange Limited Vs. Mr. Anil Kohli, RP for Dunar Foods Limited [[2021 (9) TMI 1156 - SUPREME COURT]], where it was held that considering the statutory provisions which provide that delay beyond 15 days in preferring the appeal is uncondonable, the same cannot be condoned even in exercise of powers under Article 142 of the Constitution.
Thus, even if, the Appellant has submitted that a fraud has been played, in so far as, the delay is concerned, it cannot be condoned by this Tribunal because of lack of jurisdiction - The application is thus dismissed and as a consequence of dismissal of the application for condonation of delay, the main appeal is also dismissed.
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2023 (3) TMI 1213
Initiation of CIRP - Financial Creditors or Operational creditors - receivables sold or discounted on a non-recourse basis - financial debt or not.
Whether the Appellants in the second appeal (Financiers) are the Financial Creditors as against the Corporate Debtor or have stepped in to shoes of the Seller as an Operational Creditors and as such application filed by the Appellants in the second appeal under Section 7 of the Code has rightly been held to be not maintainable and were rightly relegated to avail their remedy of filing the application under Section 9 of the Code?
HELD THAT:- The Agreement (COR) was entered into between the Seller, Financier and the Corporate Debtor (As customer). As per the agreement, the Seller had agreed for discounting of invoice of the customer (CD) for the creation of the right and interest in the invoice receivables in favour of the Financier (Appellant). Upon execution of agreement of COR, the Appellant as a Financier discounted the invoice and deposited the amounts into an escrow/nodal account maintained by KredX with an escrow/nodal agent, namely, Yes Bank Limited who further transferred the said amount to the account of the Seller and on receiving, the Seller transferred its right to receive the money under the invoices in favour of the Financiers/Appellants.
In this transaction, the money was never disbursed much less for the time value as a financial debt to the Corporate Debtor and by virtue of discounting the invoice of the Seller of an amount of Rs.3,42,03,903/- for amount of Rs.1,75,23,133/- the Financiers/Appellants entered into shoes of the Seller and had become Operational Creditors in terms of Section 5(20) as well as 21(5) and Section 5(7) and 5(8)(e) of the Code is not at all applicable.
There is no error in the order of the Adjudicating Authority who has though rejected the application filed under Section 7 of the Code but relegated the Appellants (Financiers) to avail their remedy under Section 9 of the Code in accordance with law.
Appeal dismissed.
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2023 (3) TMI 1176
Stay on invocation and encashing of the bank guarantee by the petitioner - HELD THAT:- This Court has not considered the merits, which have arisen in the present dispute, and is only passing a direction in furtherance of the directions already passed by this Court on 14.03.2022 in the aforesaid CM Main.
Despite the fact that there was an order already passed by this Court on 14.03.2022, it is informed that 19 hearings have already taken place, without the learned NCLT disposing of the said application filed on behalf of the petitioner.
It is directed that the NCLT takes up the matter on 28.03.2023, when the petition is stated to be listed before the learned Tribunal and dispose of the same in accordance with law, not later than 25.04.2023 - Petition disposed off.
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2023 (3) TMI 1175
Effect of the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - should be limited to the same project i.e Winter Hills only or not - seeking appropriate direction to the Ld. IRP/ Respondent to effect the moratorium limited to the real estate project Winter Hills only and not to enlarge the effect of the moratorium against the other assets of the Corporate Debtor or against the entire company of the Corporate Debtor - as per applicant role of IRP/ Respondent should be confined only with respect to project Winter Hills-77 instead of whole company of the Corporate Debtor.
HELD THAT:- The intent of Section 7 of the I & Code, 2016 is pretty clear and the role of Adjudicating Authority has been clearly defined to examine the existence of debt and subsequent default on payment on due date by the Corporate Debtor and also meeting the threshold criteria. Admittedly, in the present case no error was found in the order of the Appellate Tribunal contained in order dated 04.02.2020, thereby there was no case of the Appellant therein to set aside the order dated 20.08.2019 - This Appellate Tribunal, taking the support of the ratio as laid down by the Hon’ble Supreme Court of India in the case of COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT], regarding economic experimentation, took on challenge for finding new dynamic solution and laid down for the first time the concept of ‘Reverse CIRP’ along with other aspect related to the case in Para Nos. 13, 15, 20, 21, 25, 26, 29, 30 & 31 of (04.02.2020) as discussed in preceding paragraphs.
Similarly, Section 14 of the I & B Code, 2016, is explicit and without any ambiguity which prescribes that once CIRP has been admitted, the entire Corporate Debtor is placed under management of the IRP who shall conduct day to day affairs of the Corporate Debtor and moratorium automatically find its place. The balance has been placed on the rights and obligations of various stakeholder during this calm period as per Section 14 of the I & B Code, 2016 and this has been primarily done to protect the assets of the Corporate Debtor so that by suitable Resolution Plan of Resolution Applicant the Corporate Debtor can be continued on going concern basis and not push the Corporate Debtor towards Insolvency/ Liquidation.
The intent of order of this Appellate Tribunal dated 04.02.2020, therefore, seems to restrict the scope of the Reverse CIRP to only project Winter Hills-77, whose two allottees, namely, Rachna Singh and Ajay Singh, filed an application asking for the CIRP of the Corporate Debtor and who not only got the possession of their flats but also received sale deeds and were able to get these registered in their favour. Thus, technically the grievances of the Original Applicants/ Movers of Section 7 application have been satisfied.
This Appellate Tribunal consciously notes that Section 14 of the I & B Code, 2016 recognise moratorium of the Corporate Debtor implying that under such moratorium all assets and liabilities are covered by provision of moratorium and protected from any detrimental action against the Corporate Debtor by way of any fresh/continuation of any suit or litigation etc., to protect the Corporate Debtor’ in the difficult times and give temporary respite to overcome difficulties and revive itself by other means including by the ‘Successful Resolution Plan’ of third party - It is pertinent to note that the concept of Reverse CIRP was also allowed to the specific project and without touching or commenting on other projects and assets of the ‘Corporate Debtor’ and without any specific direction/observation regarding continuation of moratorium on other projects for the Corporate Debtor.
Thus, it becomes evident that the order is confined to only Winter Hills-77 and not to other projects of the Corporate Debtor and consequently and logically the moratorium in the present case can deemed to have been confined to only project Winter Hills-77 and not to other projects of Corporate Debtor. This clarification is being given looking to peculiar and extraordinary circumstance of the case and detailed rational along with elaborate directions contained in its order dated 04.02.2020. This Appellate Tribunal also takes into account an important fact that in its earlier order dated 04.02.2020, for the first time, the concept of Reverse CIRP was introduced and as such this is evolving process needing such clarification.
This Appellate Tribunal will like to amplify that above clarification is on specific request of the Appellant in present appeal and cannot be treated as general guidance or interpretation regarding moratorium on the Corporate Debtor - moratorium on Corporate Debtor as a whole is a normal, basic and fundamental law as laid down in Section 14 of the I & B Code, 2016 and need to be read accordingly.
Application disposed off.
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