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IBC - Case Laws
Showing 181 to 200 of 779 Records
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2023 (10) TMI 69
CIRP - Execution of decree awarded by foreign court - Overriding provision of IBC - execution proceedings can be continued in view of the interim moratorium or not - HELD THAT:- If any act violates the provisions of FEMA, permission of RBI may be obtained postfacto. Therefore, it cannot be said that the foreign judgement is in breach of Indian law or fails to recognise such breach and therefore is inconclusive.
As far as the contention of the learned counsel for the petitioner that the Foreign Judgement has purportedly held that foreign decree cannot be enforced in India and ought to be enforced in other countries is concerned, it is clear that such an observation was only to suggest that the decree holder had an option to enforce a foreign decree against the assets of judgement debtor in other countries. The judgements cited in the case of Mrs Shobha Vishwanatha [1996 (4) TMI 529 - MADRAS HIGH COURT], Algemene Bank Netherland NV [1989 (12) TMI 271 - HIGH COURT OF BOMBAY] were in the context of FERA regime and therefore reliance by the counsel for the petitioner on these are misplaced.
The conduct speaks volumes in the case i.e. how clearly after every attempt to stall the execution proceedings failed, did the petitioner, as an after thought, try to forestall the execution proceedings.
There is no merit in the petition - Petition dismissed.
Seeking a formal order staying further proceedings in the execution petition in view of deemed stay of further proceedings as per the provisions of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- As far as the IBC is concerned and with regard to the correctness of the order with regard to the currency of the interim moratorium, the preamble provides to complete the resolution in a time bound manner.
Now coming to the question of constructive res-judicata as held in the case of Sarguja Transport Services [1986 (11) TMI 377 - SUPREME COURT], that though the principles of res-judicata is not strictly applicable to writ petitions under Article 227 of the Constitution of India, the legal principles underlying Order XXIII, Rule 1(4)(b) would as a matter of public policy be applicable to writ petitions.
Application dismissed.
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2023 (10) TMI 68
CIRP - validity of liquidation order - Seeking consideration of Resolution Plan - Appeals have been filed by both the Appellant stating that they were willing to give a higher offer but without considering their offer liquidation order has been passed - HELD THAT:- The ends of justice be served in giving one opportunity to the CoC to consider the Plan/Revised Offer and take decision on the said offer.
It is well settled that objective of the IBC is to revive the Corporate Debtor and liquidation is the last resort. In view of the aforesaid, the order directing for liquidation is set aside and the CIRP extended for a period of 60 days from today to complete the process - It is made clear that in event Resolution Plan is approved, an application be filed for approval of the plan before Adjudicating Authority. In event, Resolution Plan is not approved, the Resolution Professional shall immediately file application for liquidation.
Appeal disposed off.
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2023 (10) TMI 11
Maintainability of petition - availability of statutory remedy of appeal - Petitioner has not been availed of within the limitation period provided therefor - seeking vacation of attachment order - HELD THAT:- There is no doubt about the fact that the Petitioner was not a party to the resolution proceedings pending before the NCLT, Mumbai but we find that Petitioner was not a person who could have said to have remained in the dark all throughout about passing of the order by the NCLT. This is evident from the fact that one of the ex-directors of Respondent no. 1 had belatedly filed an appeal under section 61 of the IBC before NCLAT along with application for condonation of delay and the application for condonation of delay was dismissed by NCLAT by a speaking order passed on 14th July 2023. This order states that power vested with the Appellate Tribunal to condone the delay is only of 15 days as provided under proviso to section 61(2) of the IBC and beyond this period, no delay could be condoned by NCLAT. The NCLAT also noted the fact that delay occurred in filing of the Appeal filed by other ex-director of Respondent no. 1 was of 423 and 164 days which was beyond the power of condonation of delay vested in the appellate tribunal.
In the present case, the order passed by NCLT, and in particular, the portion by which order of attachment of flats passed by PMLA authority has been vacated, has attained finality, as rightly submitted by the learned counsel for the Respondent no. 1. This is for the reason that no appeal has been preferred against it before NCLAT within the stipulated period of time or within the extended period of time as provided under section 61 of the IBC by anybody including the Petitioners.
There are no merit in the submission as it is an admitted fact that the registered address of Respondent no. 1 company is of Mumbai and therefore, NCLT Mumbai would have had the jurisdiction in the matter. Even otherwise, if any such contention was to be made, it could have been made by the Petitioner by availing of statutory remedy of appeal, which remedy now has been forfeited by him on account of his own lethargy.
There is no merit in the petition and it deserves to be summarily dismissed - Petition dismissed.
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2023 (9) TMI 1688
Failure to elicit the most viable commercial plan, preventing the CoC to bring about an effective resolution of the corporate debtor - material irregularity been committed by the RP and the CoC in rejecting the resolution plan of the CRP or by the Adjudicating Authority in approving the resolution plan of SRA-Vama - on account of the rejection by RP of the claims filed by the UTGST and AC-CGST, the resolution plan of Vama, as approved by the Adjudicating Authority, meet the requirements under applicable law or not.
Whether any material irregularity been committed by the RP and the CoC in rejecting the resolution plan of the CRP or by the Adjudicating Authority in approving the resolution plan of SRA-Vama? - HELD THAT:- There are no doubt that the CRP did not submit their EOI on time either in the first or second round of Form G. However as and when it was received the RP had apprised the CoC. Besides being non-serious and casual about complying with timelines stipulated in the IBC, even while submitting their EoI they had failed to adhere to mandatory requirements of RFRP. Even the EMD payment was made belatedly and that too for Rs. 2.25 crore as against requirement of Rs 2.5 crore. The CoC deliberated upon the matter and ultimately passed the resolution not to consider the non-compliant plan of CRP in the interests of the corporate debtor and this was communicated to CRP. There are no lapse or irregularity on the part of the RP or the CoC in not entertaining the belated and defective plan of CRP.
Section 30 of the IBC which deals with submission of Resolution Plan and sub-section (6) states that “the resolution professional shall submit the Resolution Plan as approved by the Committee of Creditors to the Adjudicating Authority”. In the present case, the RP after approval of the plan by the CoC filed an application before the Adjudicating Authority seeking approval of the Resolution Plan under Section 31 of the Code. Section 31 deals with approval of Resolution Plan - The Adjudicating Authority in turn on its part has clearly recorded in the first impugned order that on examination of the resolution plan of Vama it has found that no provision of law appears to have been contravened and that there is compliance to Regulations 38 and 39 of CIRP Regulations, 2016. It has also noted that interests of all stakeholders have been taken care of. CRP has failed to point out the contravention of any provision by the CoC in approving the plan.
The CoC has meticulously evaluated the matrix in approving the plan of Vama and the sole member of CoC having 100% voting share has already approved the plan in their commercial wisdom as contemplated under the law. That being the case, the Adjudicating Authority cannot substitute its views with the commercial wisdom of the CoC nor deal with the merits of Resolution Plan unless it is found it to be contrary to the express provisions of law and against the public interest. There is neither any material regularity nor contravention of any provisions of law by the CoC and the plan has been rightly approved by the Adjudicating Authority.
The IBC provides for an initiation of timely resolution of the corporate debtor and in the instant case the resolution plan having already been approved by the CoC and the Adjudicating Authority and implemented by the SRA, it cannot now be open to interference on an appeal preferred by an unsuccessful resolution applicant. It is equally significant to note that following the rejection of the plan of CRP by the CoC, CRP accepted the EMD refund and did not approach the Adjudicating Authority objecting to the resolution plan. It is, therefore, clear that CRP did not challenge the resolution plan before the Adjudicating Authority at the right point of time and raking up the matter belatedly.
Thus, no case has made by CRP to establish any procedural or material irregularity committed by the RP/CoC in rejecting their EoI and that the challenges raised by the CRP clearly fall within the domain of commercial wisdom of the CoC which is non-justiceable. Nor has CRP been able to establish any contravention of law by the Adjudicating Authority in approving the resolution plan of Vama.
Whether on account of the rejection by RP of the claims filed by the UTGST and AC-CGST, the resolution plan of Vama, as approved by the Adjudicating Authority, does not meet the requirements under applicable law? - HELD THAT:- There has been no dereliction of duty on the part of the RP in rejecting the belated claims of UTGST and AC-CGST. It is not found that any error or irregularity on the part of RP to have rejected the belated claims of UTGST and AC-CGST. Furthermore, the Adjudicating Authority in the first impugned order has taken note that the resolution plan submitted by the SRA – Vama has taken into account the interest of government authorities and provided for appropriate treatment of admitted government dues. The Resolution Plan submitted by the Vama has dealt with the claims of Operational Creditors to the extent of Rs. 10 lakhs besides earmarking an additional sum of Rs. 25 lakhs for all the Government Department claims and undertaken to pay all the PF dues at actuals based on the outcome of an ongoing legal case at Delhi High Court with respect thereto. Thus, the approval of resolution plan of SRA-Vama by Adjudicating Authority, which was approved by the CoC with 100% vote share, does not suffer from any material or procedural infirmities.
Conclusion - i) No case has made by CRP to establish any procedural or material irregularity committed by the RP/CoC in rejecting their EoI and that the challenges raised by the CRP clearly fall within the domain of commercial wisdom of the CoC which is non-justiceable. ii) The approval of resolution plan of SRA-Vama by Adjudicating Authority, which was approved by the CoC with 100% vote share, does not suffer from any material or procedural infirmities.
There are no illegality in either the first or second impugned order of the Adjudicating Authority which may warrant any interference in the exercise of our appellate jurisdiction - All appeals are dismissed.
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2023 (9) TMI 1685
Petitioner's right as a suspended director of a corporate debtor is protected by section 14 of the Insolvency and Bankruptcy Code, 2016 - moratorium provisions prohibiting recovery of property occupied or possessed by the corporate debtor - HELD THAT:- The receiver appointed in a particular suit is nothing more than the hand of the Court, so to speak, to hold the property of the litigants whenever it must be kept in the grasp of the Court in order to preserve the subject matter of the suit pendente lite and the possession of the receiver is simply the possession of the Court. To such an extent is this the case that any attempt to disturb that possession, without the leave of the Court, is a contempt of Court. The receiver's possession is on his behalf and for the benefit of all the parties to the suit in which he is appointed. The property in his hands is in custodia legis for the person who can make a title to it. He is not appointed for the benefit of strangers other than parties to the suit. He has no estate or interest himself, and his power to manage is created by the Court's order appointing him and binding on persons before the Court.
On meaningful reading of Section 14(1)(d), it is clear that recovery of property by owner/lessor where such property is “occupied by” corporate debtor is not permissible when a moratorium under IBC is declared. Section 14(1)(d) does not deal with any of the assets or legal right or beneficial interest in such assets of the corporate debtor, but what is referred to therein is the "recovery of any property". Moreover, the bar under clause (d) is attracted only when the owner or lessee is seeking recovery of property. In the facts of the case, the receiver is seeking property from an agent of the receiver on default of payment of royalty amount. Such proceedings cannot termed as proceedings for the recovery of property by the owner or lessee.
The object of the Insolvency and Bankruptcy Code, 2016, is to resolve insolvency and bankruptcy cases involving an insolvency professional's appointment to manage the debtor's affairs and the resolution of the case transparently and efficiently. The purpose of such an act is to recover the dues of the corporate debtor and calculate the value of the assets so that if ultimately it is found that the company is to be revived, the appropriate recommendation shall be made to the appropriate Court for the revival of such company. However, possession of the receiver's agent cannot be termed as an asset of a company. Applying section 14 of the IBC to the receiver's agent would amount to reading something into statute that the legislature never intended.
In so far as the locus of suspended directed to agitate rights of the corporate debtor is concerned, such issue does not rise for consideration in the facts of the case as it is already held that the position of an agent of the receiver cannot be termed as possession or occupation contemplated by Clause 2 of Sub-Section (1) of Section 14 of the IBC.
Conclusion - Possession of the receiver's agent cannot be termed as possession within the meaning of Clause (d) of Section 14(1) of the IBC.
In view of the undisputed fact of failure to pay Rs. 2,89,30,000/- towards the royalty amount by the corporate debtor, the exercise of discretion by the Court cannot be faulted. There is no merit in the writ petition - Petition dismissed.
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2023 (9) TMI 1668
Dismissal of Section 9 application filed by the Operational Creditor - seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor - Appellant had failed to establish beyond doubt that the unpaid operational debt was subsisting above the minimum threshold limit of Rs. 1 crore - HELD THAT:- A plain reading of Section 10A signifies that no application/ proceedings under Sections 7, 9 and 10 can be initiated for any default in payment which is committed during Section 10A period. Thus, what is essentially barred is initiation of CIRP proceedings when the Corporate Debtor commits any default during the Section 10A period. However, if the default is committed prior to the Section 10A period and continues in the Section 10A period, this statutory provision does not put any bar on the initiation of CIRP proceedings.
The law of Section 10A is well settled. The object and purpose of Section 10A has been explained in the ordinance by which Section 10A was brought into operation - The aim and objective of Section 10A was to protect a Corporate Debtor from the filing of any insolvency application against it for any default committed during the period when Covid-19 pandemic was prevailing. It was never intended to cover any default which occurred before Section 10A period and continuing thereafter.
The present is a case where default has been committed by the Corporate Debtor since 29.02.2020 which is prior to commencement of Section 10A period. Hence, this is a case where the default was undisputedly committed before the bar of Section 10A came into play. There being categorical default by the Corporate Debtor prior to Section 10A period, the Corporate Debtor was clearly not entitled to claim the benefit of Section 10A period.
Quantum of unpaid operational debt above the minimum threshold limit of Rs. 1 crore or not - HELD THAT:- This finding of the Adjudicating Authority has been challenged by the Appellant on the ground that a creditor is entitled to apply his own discretion to appropriate any on-account payment received from the debtor against any outstanding debt(s) due from the debtor in terms of the Indian Contract Act, 1872 - A plain reading of Section 60 of the Indian Contract Act 1872, shows that if the debtor makes any payment without any appropriation, then the creditor can use his discretion to wipe out any of the remaining debt(s) which is/are due. The right of appropriation lies with the creditor if the debtor does not indicate in what manner the debt is to be discharged. In such circumstances, the creditor has a lot of scope for exercising his right in such a manner so as to put himself in the most advantageous position - Without explaining how this action has Operational Creditor has been in contravention of the statutory provisions contained in the Indian Contract Act, it has therefore been unreasonable on the part of the Adjudicating Authority to hold that there is an inconsistency in the pattern adopted by the present Appellant while adjusting payments received against outstanding dues.
Conclusion - There are no hesitation in holding that the finding returned by the Adjudicating Authority that the criterion of minimum threshold limit of Rs 1 crore is not met in the facts of the present case is not tenable.
The Section 9 application filed by the Appellant is revived and remanded back to the Adjudicating Authority to be considered again in accordance with law - appeal allowed.
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2023 (9) TMI 1571
Seeking an order of injunction on the respondent from dealing with or taking any step in creating any interest over 13 flats together with 13 car parking spaces with each flat and an additional 66 car parking spaces and undivided proportionate share of a piece of land - section 9 of The Arbitration and Conciliation Act, 1996 - mortgage - right in rem or not - whether the petitioner is seeking to enforce any mortgage in the present application? - HELD THAT:- The application does not disclose any such pleadings or prayers. The words used in the application are to the effect that the petitioner would lose security interest over the assets as the respondent is indebted to several other creditors and is unable to pay its dues. The only prayer is for a restraint on the respondent from dealing with or creating any interest over the 13 flats together with car parking spaces and other car parking spaces as specified in prayer (a) of the application.
There is also no evidence on record to show that the petitioner is seeking enforcement of any mortgage. The respondent therefore cannot resist the reliefs on a pre-supposition of the petitioner’s claim in the arbitration - The decision of the Bombay High Court in ADITYA BIRLA FINANCE LIMITED VERSUS CARNET ELIAS FERNANDES, MRS. EVERLYN C. FERNANDES [2015 (9) TMI 1765 - BOMBAY HIGH COURT] on the other hand assists the petitioner in the facts of the present case. The Bombay High Court reiterated the power of a Court in a section 9 application to grant interim measures even where the property is not the subject matter of the dispute in arbitration. It was further held that interim measures can be granted under section 9 even if the petitioner gives up its claim for enforcement of mortgage properties.
It is undisputed that the respondent is indebted to the petitioner for a substantial amount of money in terms of the loan agreement and the supplementary agreement; the former containing an arbitration clause. It is also undisputed that the respondents created a charge on the 13 flats together with 13 car parking spaces bundled with each flat and an additional 66 car parking spaces and undivided proportionate share of the land measuring 3337.34 square meters in the building. The respondent also hypothecated its receivables to the petitioner. Both the document of charge as well as the deed of hypothecation dated 31st March, 2020 are a part of the records.
There is sufficient evidence that the petitioner’s right on the hypothecated and charged assets which is also the collateral for the loan advanced to the respondent is at risk. The restraining orders on the respondent by the Bombay High Court and other statutory authorities have already been acted upon and there is hence every chance that the petitioner’s security may further be put at risk.
This Court is of the view that the petitioner is entitled to an order of injunction restraining the respondent from dealing with any further or creating any interest over 13 flats/units together with 13 car parking spaces bundled with each flats/units and an additional 66 car parking spaces and undivided proportionate share of the land measuring 3337.34 square meters in the building to be constructed by the respondent.
Application allowed.
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2023 (9) TMI 1464
Seeking admission of claim which application came to be rejected by the impugned order - claim rejected without considering the reasons given for condonation of delay in filing the claim - HELD THAT:- In the present case, the claim has been filed by the Appellant after 511 days of the approval of the Resolution Professional.
Respondent has relied on recent judgment of Hon’ble Supreme Court in RPS Infrastructure Ltd. vs. Mukul Kumar and Another, [2023 (9) TMI 516 - SUPREME COURT], where the Hon’ble Supreme Court with regard to belated claim, which was filed after 287 days, has approved the order of the Appellate Tribunal affirming the rejection of the claim.
The present case is fully covered by the above judgment of Hon’ble Supreme Court. In the facts of the present case, no error has been committed by the Adjudicating Authority in rejecting application filed by the Appellant, which was for accepting claim which was filed after 511 days after approval of the plan by the CoC.
Appeal dismissed.
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2023 (9) TMI 1463
Request made by the Appellant for submission of claim - request rejected by the Adjudicating Authority on the ground of delay - HELD THAT:- Once the Hon’ble Supreme Court in the case of M/s. RPS Infrastructure Ltd [2023 (9) TMI 516 - SUPREME COURT] has held that even in a case where the Adjudicating Authority has not approved the plan would not imply that the plan can go back and forth making the CIRP an endless process because in that matter it would result in the reopening of the whole issue, particularly as there may be other similar persons who may jump onto the bandwagon.
There are no merit in the present appeal and the same is hereby dismissed.
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2023 (9) TMI 1431
Condonation of delay of 12 days in filing appeal - sufficient cause for delay or not - HELD THAT:- The Appellant has to give sufficient cause in the Application which should inspire confidence in the Appellate Authority to condone the delay for not reaching the Appellate Authority within the prescribed period. In this regard, it would be relevant to refer to the averments made in the Application in which the Appellant has not stated as to how and why the delay has occurred in not filing the Appeal within the prescribed period of 30 days from the date of pronouncement of the Order dated 31st March, 2023 - As a matter of fact, the reason much less sufficient, for the purpose of condonation of delay is conspicuous by its absence, in the entire application. Therefore, there is nothing for this Tribunal to appreciate about the sufficient cause for not approaching the Appellate Authority within the time prescribed or even thereafter within the window of 15 days.
The period of 15 days cannot be extended and the Appellate Tribunal does not have jurisdiction to consider and condone the delay beyond the period of 15 days and in case the Appellate Authority is satisfied that there has been a sufficient cause for not filing the Appeal within the time prescribed or within the extended period, it can condone the delay and hear the matter on merits. Therefore, sufficient cause is the heart and soul of the application for condonation of delay which is totally missing in this Application.
The law is very strict so far as the proceedings under the Insolvency and Bankruptcy Code, 2016 is concerned as has been held by Hon'ble Supreme Court in the case of NATIONAL SPOT EXCHANGE LIMITED VERSUS MR. ANIL KOHLI, RESOLUTION PROFESSIONAL FOR DUNAR FOODS LIMITED [2021 (9) TMI 1156 - SUPREME COURT] in which it has been held that after the expiry of 15 days, the limitation cannot even be condoned under Article 142 of the Constitution of India. Having said that, in the absence of any averment made in the application for condonation of delay in regard to sufficient cause, we do not find any reason to condone the delay and the Application is thus hereby dismissed.
Application dismissed.
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2023 (9) TMI 1430
Condonation of delay of 14 days in filing appeal - sufficient reasons for delay or not - whether delay in filing the appeal has occurred due to the reason which was beyond the control of the Appellant? - HELD THAT:- On perusal of the statement made in the condonation of delay application we are satisfied that no such reason has been assigned. Moreover, once the appeal was filed belatedly, it was expected on the part of the appellant to bring on record certified copy of the order. However, in this case an exemption application has been filed. A lenient view is takenin the matter had on the first day when the main appeal was taken up, the appellant had requested for condonation of delay but to the reasons best known to the appellant consecutively on number of dates despite the fact that the appeal was taken up no submission was made that the appeal was filed belatedly.
Under Section 61of the I.B. Code, for filing an appeal limitation period is prescribed as 30 days and thereafter in further 15 days if the parties are in position to satisfy the court that there was sufficient plausible reason for non filing of appeal within said period the court can condone the delay but only within extended period of 15 days.
However, considering the ground set forth in the application as well as none disclosure by the Appellant to the Court regarding filing of the condonation of delay application on number of dates, it is not inclined to entertain the condonation of delay application - the condonation of delay application stands dismissed.
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2023 (9) TMI 1400
Appointment of Administrator of DHFL to perform all functions of the Resolution Professional (RP) under the Code and to conduct the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor – Dewan Housing Finance Corporation Limited - HELD THAT:- Notice will be served by all modes, including dasti, to all unrepresented respondents on steps being taken within a period of ten days from today - Notwithstanding pendency of the present appeal, proceedings under Sections 43 to 66 of the Insolvency and Bankruptcy Code, 2016 can continue.
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2023 (9) TMI 1387
Violation of Principles of Natural Justice - Adjudicating Authority did not give opportunity to the Appellant to make its submissions - admitting Section 9 application - HELD THAT:- From the sequence of the events it is clear that the Adjudicating Authority has fixed several dates in Section 9 application after issuance of notice to the Corporate Debtor. On non-appearance of the Corporate Debtor on 22.02.2022, the Adjudicating Authority directed for ex-parte proceedings. The order dated 22.02.2022 was sought to be recalled by the Corporate Debtor by filing an application dated 09.07.2022 which application admittedly was not listed on the date when the Adjudicating Authority heard the Operational Creditor and reserved the matter. The application under Section 9 was filed in the year 2021, where repeatedly notices were issued to the Corporate Debtor.
In the facts of the case and sequence of the events, there are no bonafide reason which can explain the non-appearance of the Corporate Debtor before the Adjudicating Authority. It is true that on 11.07.2022, the counsel appearing on behalf of the Corporate Debtor informed the Court that an application for recall has been filed and the Adjudicating Authority on that date has ordered the application to the listed with the Company Petition but the application stood in defect and could not be listed and the matter was heard by the Adjudicating Authority. Even the vakalatnama of counsel for the Corporate Debtor was in defect and was not before the Court.
It has clearly been held that opportunity was given to the Corporate Debtor to appear and file reply and when after giving reasonable opportunity Corporate Debtor did not appear, order was passed to proceed ex-parte. I.A. filed by the Corporate Debtor having not listed, no fault can be found with the order passed by the Adjudicating Authority. The Adjudicating Authority has given reasons for admitting Section 9 application.
There are no error in the order of the Adjudicating Authority warranting interference in exercise of our appellate jurisdiction - Appeal is dismissed.
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2023 (9) TMI 1386
Seeking restoration of petition - condonation of delay in filing petition - non-prosecution of the case - HELD THAT:- There is no sufficient cause assigned by the Appellant for the purpose of allowing the present appeal. Without going into the merit of the case, it is observed that the Adjudicating Authority has rightly dismissed the petition for non-prosecution.
Appeal dismissed.
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2023 (9) TMI 1385
Approval of Resolution Plan - Non Consideration of GST liability as First Charge - failure to follow the requirements u/s 30(2) of the I&B Code which mandates that the 1st Respondent, to ensure that the ‘Resolution Plan’ conforms to the parameters prescribed in the said provision, in the I&B Code - HELD THAT:- This ‘Tribunal,’ pertinently points out that the ‘Appellant’ / ‘Applicant’ had filed a claim in Form-F for a sum of Rs.54,46,13,819/-, on 12.012.2018, after adjusting the receipts of Rs.30,36,36,873/-, in respect of GST Liability and the same was rejected by the 1st Respondent / Resolution Professional of the Corporate Debtor, because of the fact that the claim was resting upon the Estimates and Best Judgment Assessment orders, in the teeth of Section 62 of the KGST Act, 2017.
Considering the fact that Appellant / Petitioner, came up with the same ‘claim’, ‘sum’, which arose, based on ‘Best Judgment Assessment’ order, made on earlier occasion, and the ‘regular assessment’, was not made, hence, this Tribunal, is of the ‘cocksure’ opinion, that the ‘demand’ was not ‘ascertained’ and not crystalised and placed before the 1st Respondent / Resolution Professional for consideration of the ‘Committee of Creditors’. Suffice it, for this ‘Tribunal’, to pertinently point out that the Appellant / Petitioner, is prohibited, based on the ‘Principle of Res judicata’, and ‘by its conduct, is estopped’ from agitating the likewise, grounds for determination before the ‘Adjudicating Authority’ / ‘Tribunal’.
This Tribunal, ongoing through the impugned order passed by the ‘Adjudicating Authority’ / ‘NCLT Bengaluru Bench, is of the considered opinion, that the ‘observations’ made in paragraph 18 and 19 to the effect ‘that the claim of Applicant, would not be considered to have ‘First Charge’ at par with secured creditors under the mandatory provisions of Section 82 of the Karnataka Goods and Services Act, 2017, Section 82 of the Central Goods and Services Tax Act, 2017 and Section 20 of the integrated goods and Services Tax Act, 2017 and that ‘Section 20 of the IGST Act provides that certain provisions of CGST Act inter alia, those falling under Demands and recovery section of CGST Act shall, ‘mutatis mutandis’, apply, so far as may be, in relation to integrated tax, as they apply in relation to the ‘Central Tax’, as if they are enacted under the IGST Act etc.’ and that apart, a ‘specific exception to the provisions of the Code’ was prescribed in the aforesaid provisions, and expressly providing and overriding effect to the I&B Code, are ‘free from any legal errors’.
Appeal dismissed.
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2023 (9) TMI 1384
Recall of order admitting Section 7 application - non-service of notice - Appellant challenging the Order contends that it is true that registered office of the Corporate Debtor is at Mumbai however the said office is in the possession of official assignee since the year 2013 hence any notice issued to the said office in the name of Corporate Debtor has never been served.
HELD THAT:- From the facts which has been brought on record it does appear that notice which was sent by the Financial Creditor to the Corporate Debtor pre filing of Section 7 Application and post filing of section 7 application returned with the remark “left”. Affidavit which was filed on behalf of Financial Creditor also clearly mentioned this fact which has been brought on record at page 85 of the Appeal Paper Book - It appears that due to non-service effected on the corporate debtor, the Adjudicating Authority has passed an order for paper publication on 2nd July, 2019. There is no dispute that paper publication was made at Mumbai. In support of submission of the Appellant that registered office of the Corporate Debtor is in the possession of the official assignee since 2013, the Appellant has brought on record the letter issued from Official Assignee’s Office High Court, Bombay 30th July, 2021 (Page 77) which indicates that in pursuance of the Order Notice of Motion No. 1 of 2013, order dated 3rd June 2013 official assignee has asked for handing over the documents.
From the facts stated, it is clear that registered office at Mumbai was not in the possession and control of the Corporate Debtor and after 2013 correspondence was made by the Corporate Debtor from Jaipur Address which was also responded by the Financial Creditor on 08th May, 2014 - In the record, there is no proof that any step was taken for serving the email nor any affidavit was filed by the Financial Creditor before the Adjudicating Authority that both the modes were adopted for service as directed vide Order dated 2nd July, 2019.
The present is a case where corporate debtor was unaware of the proceedings and publication at Mumbai was not effective since registered office was not under the control and possession of the Corporate Debtor.
The objection of the Respondent that Appeal is not maintainable has no legs to stand - appeal allowed.
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2023 (9) TMI 1383
Rejection of application for extension of 60 days’ time from the date of expiry of CIRP for allowing the CoC to consider and vote upon approval of Resolution Plan - rejection on the ground that Appellate Tribunal can only extend the same - rejection also on the ground that Appellant before the Hon’ble Supreme Court was granted liberty of such extension and it cannot be granted to Resolution professional now.
HELD THAT:- This Tribunal by its order passed in GOVIND PRASAD TODI, SIDDHARTHA TODI VERSUS SATYA NARAYAN GUDDETI (LIQUIDATOR/ ERSTWHILE RESOLUTION PROFESSIONAL OF AJANTA OFFSET & PACKAGING LIMITED) , CANARA BANK, CORPORATION BANK, STATE BANK OF INDIA, EXIM BANK, TODI INVESTORS (INDIA) PVT. LTD., VINAYAK DEALERS PVT. LTD., SOUTH CITY PROJECTS (KOLKATA) LTD., EDCL INFRASTRUCTURE LTD., AMRITVANI EXIM PVT. LTD. [2023 (2) TMI 486 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] has extended the CIRP for a period of 90 days which order was challenged by Govind Prasad Todi and Siddhartha Todi before the Hon’ble Supreme Court in GOVIND PRASAD TODI & ANR. VERSUS SATYA NARAYAN GUDDETI & ORS. [2023 (3) TMI 1407 - SC ORDER], where the Hon’ble Supreme Court held After arguing the matter for some time, the learned senior counsel appearing for the appellants seeks leave to withdraw this appeal with a liberty that if occasion arises, he may be permitted to apply for extension of time.
The liberty was granted by the Hon’ble Supreme Court to apply for extension of time. Extension of time in the CIRP has to be applied by the Resolution Professional who is the official conducting the CIRP and further when CoC has instructed the Resolution Professional to seek extension of 60 days, the application could not have been rejected only on the ground that Govind Prasad Todi and Siddhartha Todi who were granted liberty, who have not filed the application. The liberty was granted to Govind Prasad Todi and Siddhartha Todi to also file application for extension but the order of the Hon’ble Supreme Court does not precluded the Resolution Professional to make application for extension of time.
In the facts of the present case, when in the CIRP plans have already been received which have to be voted upon, the ends of justice shall be served in extending the period of CIRP for 60 days.
Appeal allowed.
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2023 (9) TMI 1382
Rejection of Section 7 Application - dismissed as barred under Section 10A of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The liability of corporate guarantor to make the outstanding payment arose only when Corporate Guarantee was invoked vide Notice dated 12th June, 2020 as per the notice invoking the corporate guarantee. 16th June, 2020 was date on which default was committed which is a date admittedly covered by Section 10A prohibition. The Adjudicating Authority did not commit any error in rejecting Section 7 Application as barred by Section 10A.
There are no merit in the Appeal - the Appeal is dismissed.
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2023 (9) TMI 1293
CIRP - Transfer of property under auction - status of "charge" created on the property - Right and liability of the purchaser of property - whether once the property was sold by the liquidator in the public auction and on “as is where is basis”, the secured creditor cannot be allowed to assert an entry for the asset once sold? - HELD THAT:- Claims were invited and the State during the process failed to substantiate it and at the stage of liquidation did not lodge its claim. In light of the judicial pronouncement above the debt therefore did not form a part of the resolution plan and therefore stood extinguished - Admittedly state tax dues and the State would be a claimant as an operational creditor. The claim lodged during insolvency process stood rejected and during the liquidation, no such claim was lodged. This fact is reiterated at the cost of repetition as this would lead thus to examine the provisions of Section 52 and 53 of the IBC.
Reading Section 52 would indicate that a secured creditor in the liquidation proceedings may relinquish its security interest to the liquidation asset and receive proceeds on the sale of assets by the liquidation in the manner specified under section 53 or realise its security asset by enforcing its claim or settling it. In the facts of the present case having failed to assert its claim the State as an operational creditor/stakeholder/secured creditor would have to fall in line as per the “waterfall mechanism” under Section 53 of the IBC.
Once having relinquished its interest under Section 52, the State cannot continue the insistence of maintaining the charge in the revenue records and its claim will have to stand in priority.
The argument of the State that since the asset was sold on a condition of “AS IS WHERE IS BASIS”, the charge of the State was rightly recorded is misconceived as the deed already records that the purchaser shall not be liable for payment of any outstanding dues of the government. This too was, in the opinion of the Court a clause that would relieve the petitioner of the liability to pay tax dues - Even otherwise as per Section 100 of the Transfer of Property Act, a charge cannot be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of such charge. The State moved in to get a charge registered on 15.12.2022 much later.
The order dated 05.01.2022 is set aside - Petition allowed.
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2023 (9) TMI 1292
Admission of section 9 application - CIRP of Corporate Debtor initiated - it is contended that the Adjudicating Authority had failed to consider that nothing was due or payable by the Corporate Debtor to the Operational Creditor and that there was a pre-existing dispute subsisting between the two parties - HELD THAT:- The Adjudicating Authority has rightly observed after perusing the reply filed by the Corporate Debtor to the legal notice of 05.12.2019 as well as their reply to the demand notice dated 02.01.2020 that at no occasion the Corporate Debtor had raised complaints with regard to poor quality of goods with the Operational Creditor after issue of the two credit notes aggregating Rs.35,91,500/-. Neither any invoices have been furnished in support of their contention that the Corporate Debtor had supplied material to the Operational Creditor.
There are no communication which has been placed on record by which the Corporate Debtor had sent any reminder to the Operational Creditor in respect of their outstanding payments. It has also been rightly observed that disputes surrounding claims and counter-claims cannot be adjudicated or determined by the Adjudicating Authority given their summary jurisdiction.
The Adjudicating Authority in the present case has carefully considered the reply and submissions made by the Corporate Debtor and has correctly come to the conclusion that there is no ground to establish any real and substantial pre-existing dispute which can thwart the admission of section 9 application against the Corporate Debtor - there are no hesitation in observing that in the present case there is no real pre-existing disputes discernible from given facts and all other requisite conditions necessary to trigger CIRP under Section 9 stands fulfilled.
The Adjudicating Authority has rightly admitted the application of the Operational Creditor filed under Section 9 of IBC - the impugned order does not warrant any interference - Appeal dismissed.
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