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IBC - Case Laws
Showing 241 to 260 of 779 Records
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2023 (9) TMI 82
CIRP - Liquidation Proceedings’ against the ‘Corporate Debtor - pendency of ‘Arbitral Proceedings’ - it is the stand of the ‘Appellant’ pendency of ‘Liquidation Proceedings’ against the ‘Corporate Debtor’ cannot legally extinguish claims or disputes between the parties which are pending ‘adjudication’ before the ‘Arbitration Tribunal’ or a ‘Court of Law’.
HELD THAT:- The Learned Counsel refers to the Order dated 18.01.2022 of the Principal Bench of this ‘Tribunal’ in the matter of M/S TEESTAVALLEY POWER TRANSMISSION LTD. VERSUS M/S ABIR INFRASTRUCTURE PVT. LTD. THROUGH ITS RESOLUTION PROFESSIONAL [2022 (1) TMI 1391 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI.] wherein at paragraphs 3 and 4 it is observed if the arbitration proceedings result in any award in favour of the ‘Appellant’, it shall be open to the Appellant to take such remedy as permissible under the law and impugned order shall not be come in his way in execution of the Arbitral Award.
On going through the ‘Impugned Order’ dated 25.05.2023 in IA/239/2022 in CP(IB) No.154/BB/2017 passed by the ‘Adjudicating Authority’/’Tribunal’ is of the considered view that the ‘Adjudicating Authority’/’Tribunal’ based on the facts and circumstances of the instant case and also keeping in mind of the ‘Order’ in Company Appeal (AT) (Ins) No.28 of 2022 to the effect that if the ‘Arbitration Proceedings’ result in any award in favour of the ‘Appellant’, it shall be open to the ‘Appellant’ to take such remedy, as permissible under the law and the ‘Impugned Order’ shall not come in his way in execution of the ‘Arbitral Award’ came to the conclusion that the ‘Liquidator’ had correctly rejected the ‘Appellant’/’Applicant’s claim by means of the reasons given in the letter dated 29.01.2022, considering the fact that the ‘Liquidation’ was a ‘time bound process’.
Appeal dismissed.
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2023 (8) TMI 1636
Admission of application u/s 7 filed by the Financial Creditor against the Appellant who was Corporate Guarantor - simultaneous initiation of proceedings u/s 7 of IBC against both the Principal Borrower and the Corporate Guarantor - HELD THAT:- The Adjudicating Authority has noted that the Notice was issued on 14.03.2018 by the Financial Creditor to Principal Borrower as well as the Corporate Guarantor that the Principal Borrower has defaulted in payment towards the outstanding amount - Appellant cannot be allowed to raise the issue of non-filing of the Corporate Guarantee on the record when the existence of Corporate Guarantee was not even disputed in the proceeding.
Conclusion - The law is well settled that proceeding under Section 7 can be initiated against both the Principal Borrower and Corporate Guarantor and there is no inhibition in proceeding against the Corporate Guarantor although proceeding against Principal Borrower under Section 7 was admitted.
There is no merit in the Appeal - Appeal is dismissed.
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2023 (8) TMI 1585
Oppression and mismanagement - Respondent No. 1 company is a quasi-partnership or not - Family settlements - Alleged acquisition of shares by Respondent No. 2 and Late Trimbak Bedekar with a view to reduce the petitioners to minority - it was held by NCLAT that 'The Petition is only partly allowed as against the Respondents No. 1 to 5 with an order that Respondents No. 1 to 5 shall buy out the shareholding of the Petitioners on a fair value to be determined by an independent registered valuer to be appointed on the basis of consensus between the parties within a period of one month from today.' - HELD THAT:- It is not required to interfere with the impugned order.
The civil appeal stands dismissed.
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2023 (8) TMI 1466
Condonation of delay in filing the appeal - delay of 38 days beyond the expiry of limitation - application u/s 7 has been dismissed as non-maintainable - HELD THAT:- The present is a case where it cannot be held that the application filed for restoration was in a wrong forum which could not be decided for the defect of jurisdiction or of like nature. Conditions as contemplated u/s 14 are not attracted to extend the benefit u/s 14 to the Appellant.
The judgement of Hon’ble Supreme Court in Sesh Nath Singh & Anr. Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd. & Anr. [2021 (3) TMI 1183 - SUPREME COURT] was a case where the benefit was extended u/s 14 of the Limitation Act with regard to period during which writ petition was pending challenging the proceedings under SARFAESI Act. Hon’ble Supreme Court in the said judgement has taken the view that the benefit of the proceedings could have been extended for the purpose - It was held that since SARFAESI proceedings which were stayed by the High Court which proceedings by the Cooperative Bank were without jurisdiction due to which the Financial Creditor was unable to proceed further under the SARFAESI Act - The facts of the case Sesh Nath Singh & Anr. are entirely different and are not attracted in the present case.
The Appellant has placed reliance on another judgement of the Hon’ble Supreme Court in M/s Laxmi Srinivasa R and P Boiled Ricel Mill Vs. The State of Andhra Pradesh & Anr. [2022 (12) TMI 822 - SUPREME COURT] In the case before the Supreme Court, the writ petition was filed in High Court and thereafter proceedings were initiated and the appeal was filed before the Appellate Tribunal for exclusion of the period. The Hon’ble Supreme Court directed the Appellate Authority to examine the appeal on merits - The above case was again the case where benefit of section 14 was allowed due to the proceedings of writ petition, which was held has not maintainable. The facts of the said case are also entirely different.
Appellant is not entitled to the benefit of Section 14 of the Limitation Act - the jurisdiction to condone the delay is limited to only 15 days - the prayer to condone the delay of 38 days beyond the expiry of limitation cannot be accepted.
The application for condonation of delay is rejected.
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2023 (8) TMI 1457
Maintainability of application under Section 7 of IBC - application barred by limitation which is prescribed under Article 137 of the Limitation Act, 1961 or not - Appellant made various payments up to February, 2017 but also on 07.03.2019 sent a proposal for one time settlement of term loan which tantamounts to acknowledgement - it was held by NCLAT that 'There is hardly any substance in the present appeal for the purpose of interfering in the order of admission on the ground of limitation.'
HELD THAT:- There are no good ground and reason to interfere with the impugned judgment and hence, the present appeal is dismissed.
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2023 (8) TMI 1402
Timelines provided under IBC not followed by Commissioner and employees of the EPFO - HELD THAT:- The Commissioner and employees of the EPFO must take steps to ensure that there is compliance with the timelines provided under the Insolvency and Bankruptcy Code, 2016 - Failure may have legal consequences. The employees of the EPFO must be aware of the consequences in order to ensure compliance. In case there is dereliction of duty, action should be taken against erring employees in accordance with law.
The impugned judgment does not, in any way, affect the rights of the EPFO to proceed in accordance with law, in view of Section 36(4)(a) (iii) of the IBC.
There are no good ground and reason to interfere with the conclusion(s) reached in the impugned judgment and hence, not inclined to issue notice - appeal dismissed.
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2023 (8) TMI 1399
Maintainability of application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 - time limitation - HELD THAT:- In the present case, the Adjudicating Authority has recorded a finding in favour of the Respondent that on 11.07.2017, when the first petition was filed by the alleged Financial Creditor, the date of recalling of the financial assistance in terms of clause 4 of the MOU dated 02.05.2012. However, this finding cannot be accepted, the date of default cannot be 11.07.2017 which in fact the date of filing of the petition under Section 7 of the Code because the date of default has to be mentioned in the petition and only thereafter, the application is filed under Section 7 of the Code. It means that the date of default has to be before the date of filing of application under Section 7 of the Code and the date of filing cannot be presumed to be the date of default. As a matter of fact, the Adjudicating Authority, while answering the contention of the Corporate Debtor that the application under Section 7 was not within limitation, has observed that “therefore, it can be said that the financial assistance was recalled on 11.07.2017. Since, the instant petition was filed on 16.03.2018, it cannot be said that the same is barred by limitation.
The application filed under Section 7 is not found to be within the period of limitation because the last payment was admittedly made on 27.02.2015. The application under Section 7 was filed on 16.03.2018 which is apparently beyond the period of three years and was barred by limitation had the date of default not been taken as 11.07.2017 by the Adjudicating Authority as the date of recall of the financial assistance.
Counsel for the Appellant has referred to Section 65 of the Code which provides in the punishment for fraudulent and malicious initiation of proceedings and contended that it is a case where there was collusion for the purpose of obtaining order of admission in regard to the initiation of CIRP against the Corporate Debtor. This aspect should have been looked into by the Adjudicating Authority and should not have brushed aside only on the ground that it is not required to look into for the purpose of consideration of admission of the CP.
In the end, even after taking into consideration the MOU dated 02.05.2012, which is the basis of the order of admission having been passed by the Adjudicating Authority and relied upon heavily by the alleged Financial Creditor, the application under Section 7 could not have been filed until and unless the financial assistance given by the Financial Creditor to the Corporate Debtor has been recalled which is a fact conspicuous by its absence in these proceedings - looking from any angle, the order of admission passed by the Adjudicating Authority is found to be patently illegal.
Appeal allowed.
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2023 (8) TMI 1390
Seeking Liquidation of the Corporate Debtor Company - HELD THAT:- There are no good grounds and reasons to interfere with the impugned judgment and hence, the appeal is dismissed.
It is clarified that the impugned judgment/order and the dismissal of the present appeal would not come in the way of M/s Cantors Fitzgerald from applying and submitting Expression of Interest in terms of sale notice dated 06.08.2023.
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2023 (8) TMI 1380
Amendment to cause title - merger of companies - HELD THAT:- Since the first respondent is stated to have been merged with TATA Steel Limited pursuant to an order dated 29 October 2021 of the National Company Law Tribunal, Mumbai, liberty is granted to the petitioners to amend the cause title to implead the successor entity.
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2023 (8) TMI 1379
Approval of acquisition plan submitted by the Respondent Nos. 5 to 8 - rejection of appointment of Independent Forensic Auditor - It was held by Arbitral Tribunal that Adjudicating Authority did not commit any error in passing the Order dated 11th May, 2022 approving the Auction of Corporate Debtor as a going concern in favour of Respondent Nos. 5 to 8. The Adjudicating Authority also did not commit any error in rejecting the Application filed by the Appellant praying for appointment of ‘Independent Forensic Auditor’ for conducting a forensic audit. The said application has rightly been rejected by the Adjudicating Authority.
HELD THAT:- There are no reason to interfere with the impugned order of the National Company Law Appellate Tribunal, since no substantial question of law is involved in the appeal. - appeal dismissed.
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2023 (8) TMI 1378
Rejection of Section 7 application - threshold limit involved in the appeal - deduction of interest amount - application rejected on the ground that Company Petition was filed below the threshold limit as per the Notification issued by the Ministry of Corporate Affairs vide Notification dated 24.03.2020.
Whether if the interest payments accrued during the Section 10A period whether the said interest amount is to be deducted while computing the threshold?
HELD THAT:- The Section 10 A provides that no application/proceedings under Section 7,9 & 10 is to be initiated for a default which is committed during Section 10A period. What is bar is initiation of proceedings when Corporate Debtor commits default in Section 10 A period. If the default is committed prior to Section 10A period and continues in the Section 10 A period the initiation of proceeding is not barred.
In the Judgment of this Tribunal delivered in RAGHAVENDRA JOSHI VERSUS AXIS BANK LIMITED; MR. AMIT CHANDRASHEKAR PODDAR [2023 (8) TMI 1376 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI] it is already held that if default was committed prior to Section 10 A period, Section 10 A shall not be applicable.
If the default is committed prior to Section 10 A period and default continues there is no prohibition in initiating proceedings under Section 7 and we are not persuaded to accept the submission of the counsel for the respondent that the liability of interest which accrued during Section 10 A period should be ignored or should not be computed in the amount while finding the threshold. Liability to pay interest which default committed prior to Section 10 A period continues and is not obliviated by Section 10 A - Adjudicating Authority committed error in rejecting the Section 7 application the threshold being complete.
The Adjudicating Authority is directed to pass fresh order admitted Section 7 application within 30 days from today - appeal allowed.
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2023 (8) TMI 1376
Rejection of Section 7 application - NPA was declared on 19th July, 2016 but the Corporate Debtor’s OTS was sanctioned on 14.02.2020 under which OTS, default was committed during Section 10A of IBC Period - applicability of section 10A on default under the OTS - HELD THAT:- The focus of the law which was brought by Section 10A was that when the Corporate Debtor suffers default on account of Covid-19, they should be protected from the filing of any Insolvency Application in the default committed during the said period - Section 10A never intended to cover the default which is continuing before Section 10A period. The present is a case where admittedly default has been committed by the Corporate Debtor since 2016. Admittedly NPA was declared on 19th July, 2016. Learned Counsel for the Respondent has rightly referred to acknowledgement made by the Corporate Debtor in its balance sheets for the financial year 2018-19, 2019-20 and 2020-21 where the dues were clearly acknowledged. Thus, the present is the case where default was committed prior to commencement of Section 10A period.
The submission that since default was also committed by the Corporate Debtor during the Section 10A period of the OTS amount which ultimately withdrawn on 25th January, 2021, the Application should be barred by Section 10A does not commend here. There being categorical default by the Corporate Debtor prior to Section 10A period, the Appellant was not clearly entitled for the benefit of Section 10A Period.
There are no merit in the contention of Learned Sr. Counsel for the Appellant that Application under Section 7 of I&B Code, 2016 was barred by Section 10A. The Adjudicating Authority did not commit any error in admitting Section 7 Application - appeal dismissed.
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2023 (8) TMI 1362
Maintainability of petition - Financial creditor or not - allottee holding a decree from RERA would fall under the class of Home Buyers within category of Financial Creditor or not - HELD THAT:- This bench is of the considered view that decree would be categorised as either financial or operational debt depending on the nature of the underlying claim which stands crystallised through the arbitral or court the nature of the debt due under decree would depend on the nature of transaction from which the decretal debt has arisen - In the present case the applicant had obtained a Decree from RERA in capacity of allottee in a Real Estate Project and allottee in Real Estate Project is covered under the definition of Financial Debt contained in under Explanation to Section 5(8)(f) of the Code. Accordingly, the applicant, being holder of a decree in capacity of allottee is a Financial Creditor.
In the present case, it is not in dispute that the threshold prescribed under second proviso to section 7(1) of the Code is not met in the present case, the application could not have been maintainable had the applicant filed this application without obtaining decree under RERA. Accordingly, the applicant cannot be allowed to claim eligibility to file application u/s 7 in terms of section 4 of the Code, because if it is made permissible it would tantamount to circumventing the provisions of second proviso to section 7(1) of the Code. In other words, what is not permissible directly shall become permissible via RERA decree route. Accordingly, this bench feels that present petition is hit by bar under second proviso to section 7(1) of the Code.
This bench is of the view that in such circumstances, that the present case deserves to be dismissed under Section 7 of the Insolvency and Bankruptcy Code, 2016 - Petition dismissed.
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2023 (8) TMI 1325
Admission of application u/s 9 of IBC - application under Section 9 was filed in the year 2021 inspite of notice issued by the Adjudicating Authority Corporate Debtor did not file any reply and apparently did not contest the proceedings - HELD THAT:- Before the Adjudicating Authority neither the Corporate Debtor nor the Operational Creditor brought all the facts into the notice of the Adjudicating Authority and Adjudicating authority without taking into consideration the subsequent events which have bearing on the CIRP process has admitted Section 9 application by initiating CIRP - appellants who have been handed over the projects and who under the statutory orders have submissions which need to be looked into by the Adjudicating Authority before passing any order under Section 9.
The order impugned cannot be sustained and is set aside, however, the application is revived before the Adjudicating Authority to be preceded and decided again in accordance with law - Appellants are impleaded to the Section 9 application and they are permitted to file their reply.
Appeal allowed.
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2023 (8) TMI 1324
CIRP - Trespass on a property, allegedly owned by the corporate debtor - Non application of mind and without any evidence finding given that the Appellant has trespassed on the said property - violation of principles of natural justice - HELD THAT:- A close perusal of the Impugned Order in respect of the furnishing of the original documents in possession in support of acquisition of land as appearing in the Audited Financial Statement shows that the Adjudicating Authority has only directed R-1 (Appellant) to provide all the original documents in his possession in support of acquisition of land as appearing in the financial statement of the liquidator. Such an order does not cause any prejudice to the appellant, but merely requires the appellant to produce original documents which may be in his possession in support of acquisition of said land.
It is seen from the judgment in Shailesh Chawla and Ors. Vs. Vinod Kumar Mahajan and Ors. [2020 (9) TMI 947 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] that an application is placed on the promoters and personnel of the corporate debtor to cooperate with the Interim Resolution Professional (IRP) and help in timely completion of the resolution or liquidation process.
The Impugned Order in both the appeals have been given to ensure that proper and adequate cooperation is rendered by the personnel, ex-promoters and directors of the corporate debtor to the Resolution Professional/Liquidator to ensure that the process of insolvency resolution or liquidation is completed in a timely manner, which is at the very heart of IBC.
The Impugned Order does not give any finding regarding the ownership of the said property, but merely requires that the Appellant or any other person should not trespass on the property of the corporate debtor and status quo regarding the scheduled property should be maintained till the successful completion of the liquidation process - such an order does not cause any prejudice to the Appellant and merely requires him to maintain status quo. The question of his ownership or otherwise of the said land is not the subject of section 19 application filed by the liquidator.
These appeals do not deserve to be admitted and are dismissed at the stage of admission.
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2023 (8) TMI 1323
Change in date of default - application filed by the Financial Creditor is hit by Section 10A of IBC or not - It is submitted that the date of default (30.04.2020) occurs during the period from 25.03.2020 to 25.03.2021, therefore, the petition could not ever have been filed.
Whether the date of default once mentioned in Part- IV by the Financial Creditor can be changed in view of a decision of the Hon’ble Supreme Court in the case of Ramesh Kymal [2021 (2) TMI 394 - SUPREME COURT] - Whether the Financial Creditor (Bank) who has already furnished ROD can change the date of default by a subsequent ROD on the basis of circular dated 03.04.2023 issued by the NCLT?
HELD THAT:- Since, we have found that there are arguable points involved in this appeal, therefore, we issue a formal notice to the Respondents who is already on caveat, enabling it to file its reply - Let the reply be filed within two weeks i.e. up to 25th August, 2023 and rejoinder, if any, be filed by the Appellant within two weeks thereafter i.e up to 14th September, 2023. List for hearing on 20th September, 2023.
In the meanwhile, till the next date of hearing, operation of the impugned order shall remain stayed.
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2023 (8) TMI 1304
CIRP - Del Credere Agent Agreement, entered into between the ‘Appellant’ and the ‘Principal' - Commercial Borrowing - Financial Debt’, due and payable by the ‘Respondent / Corporate Debtor’ or not - HELD THAT:- A perusal of the ‘Del Credere Agency Agreement’, dated 04.04.2017, entered into between ‘M/s. Chemplast Sanmar Limited’, and ‘M/s. Madras Chemicals & Polymers’ (‘Appellant / Firm’), represented by its ‘Proprietor’ Mr. Ashok Gupta (the ‘Agent’), in Clause 1, it is mentioned that the ‘Company’, hereby appoints ‘M/s. Madras Chemicals & Polymers (‘Agent’, as ‘Del Credere Agent’), to sell the said Products, manufactured by the ‘Company’, on ‘principal to principal basis’, in the City of Chennai and its Suburbs, Tamil Nadu, and Customers, nominated by ‘Chemplast’, on a ‘non-exclusive basis’.
It cannot be forgotten that the true relationship of ‘Agent’ and the ‘Principal’, is to be gathered from the nature of the ‘Contract’, its ‘Terms and Conditions’, and the ‘Terminology’, used by the ‘Parties’, is ‘not decisive’ of the ‘Legal Relationship’, as per decision of the Hon’ble Supreme Court of India in Snow White Industrial Corporation, Madras v. Collector of Central Excise, Madras [1989 (4) TMI 81 - SUPREME COURT].
It is to be remembered that the ‘Proceedings’, under I & B Code, 2016, are ‘summary in nature’, and it is not a ‘Debt Enforcement Procedure’. An ‘Adjudicating Authority’ / ‘Tribunal’, is not a ‘Recovery Forum’ or ‘Court’ and it does not determine any ‘Claim’ or ‘Suit’, in ‘Summary Proceeding’. No wonder, the ‘objective’ of the ‘I & B Code’, is to ‘consolidate’, and ‘amend the laws’, relating to ‘reorganisation’ and ‘insolvency resolution’ of ‘corporate persons’, ‘partnership firms’ and ‘individuals’, in a time bound manner for ‘maximization of value of assets of such persons’, to ‘promote entrepreneurship’, ‘availability of credit’ and ‘balance the interests of all the stakeholders’, including ‘alteration in the priority of payment of government dues’, and to ‘establish an Insolvency and Bankruptcy Fund, and matters connected therewith or incidental thereto’.
Going by the ‘Objective’ and ‘Scheme’ of the ‘I & B Code, 2016’, this ‘Tribunal’, on the basis of surrounding facts and circumstances of the instant case, in the teeth of Clause 15 of the ‘Del Credere Agency Agreement’, dated 04.04.2017 and keeping in mind of a prime fact that the ‘Default’, which took place, pertaining to the ‘Supply of Goods’, comes within the definition of ‘Operational Debt’, as per Section 5(21) of the I & B Code, 2016 and hence, Section 9 of the I & B Code, 2016, attracts in an ‘unambiguous manner’ - the ‘Debt’, in the present case, cannot be termed as ‘Financial Debt’, as per Section 5 (8) of the I & B Code, 2016, in the considered opinion of this ‘Tribunal’.
Considering the spirit and tenor of the ‘Del Credere Agency Agreement’, dated 04.04.2017, this ‘Tribunal’, comes to a clear cut conclusion that in the instant case, the ‘Default’, arose in relation to the supply of ‘PVC Suspension Resin’ (‘Goods’), to the ‘Respondent / Corporate Debtor’, and as such, the amount ‘Claimed’, to be in ‘Default’, by the ‘Corporate Debtor’, as on 20.07.2019, amounting to Rs.1,23,14,186.94/- (vide ‘Part – IV’ of the ‘Application’, under ‘Particulars of Financial Debt’), is an ‘Operational Debt’, and for the said ‘Operational Debt’, only an ‘Application’, under Section 9 of the ‘Code’, will ‘apply’, as opined by this ‘Tribunal’.
The conclusion arrived at, by the ‘Adjudicating Authority’ (‘National Company Law Tribunal’, Division Bench – I, Chennai), holding that the ‘Section 7 Application’ of ‘I & B Code, 2016’, is ‘not Maintainable’, and resultant dismissal of the same, are free from any ‘Legal Flaws’.
Appeal dismissed.
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2023 (8) TMI 1292
Maintainability of petition - initiation of CIRP - Operational Creditors - Tripartite Settlement or not - Power of Attorney executed in ‘China’ and after the execution, was received in India - applicability of Indian Stamp Act - HELD THAT:- The ‘Power of Attorney Document’, was not executed in the Stamp Papers of the Law of the Land (India), but the said Stamp Paper, was purchased in ‘India’, and prefaced, with the document. Viewed in that perspective, this ‘Tribunal’, unhesitatingly, comes to a clear cut conclusion that the ‘Power of Attorney Document’, projected before the ‘Adjudicating Authority’ / ‘Tribunal’, by the ‘Appellant / Petitioner / Operational Creditor’, is an ‘invalid’ and ‘unenforceable’ one, keeping in view of ‘Non-compliance’ of the necessary ingredients of the Indian Stamp Act, 1899.
It is to be remembered that an insufficiently stamped ‘Original Document’ or an ‘Unstamped Document’, can be ‘impounded’, and on behalf of the ‘Appellant / Petitioner’, before the ‘Adjudicating Authority’ / ‘Tribunal’, a photocopy of the ‘Instrument / Document’, was projected and hence this ‘Tribunal’, safely and securely holds that the ‘Non-compliance’ of the ingredients of the ‘Indian Stamp Act, 1899’, the ‘Kerala Stamp Act, 1959’, result in these documents not to be enforceable in ‘Law’.
One cannot brush aside, a ‘primordial fact’ that in the instant case, the main CP (IB) / 45 / KOB / 2022, before the ‘Adjudicating Authority’ / ‘Tribunal’ (filed by the ‘Appellant / Petitioner’) is founded upon the ‘Non Payment’, as per the ‘Settlement Agreement’ dated 16.07.2020. Although, in the ‘Settlement Agreement’, the Respondent / Corporate Debtor, was described as ‘Confirming Party’, the Respondent / Corporate Debtor, had specifically guaranteed to pay the ‘Appellant / Petitioner / Operational Creditor’, if the ‘Second Party’ commits ‘Default’ on the ‘Loan Obligation’ and ‘Instalment’.
The real ‘Date of Default’, fell during the ‘Suspended Period’, to initiate the ‘CIRP Proceedings’, against the concerned, under the ‘I & B Code, 2016’.
Taking note of the facts and circumstances of the instant case, in an integral manner, comes to an ‘inevitable’, ‘irresistible’ and ‘inescapable’ conclusion that the ‘impugned order’ passed by the ‘Adjudicating Authority’ (‘National Company Law Tribunal’, Kochi Bench), in ‘dismissing’ the ‘Section 9 Petition’, preferred by the ‘Appellant / Petitioner / Operational Creditor’, does not suffer from any material irregularity or patent illegality in the ‘eye of Law’ - Appeal dismissed.
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2023 (8) TMI 1291
CIRP - Bona fide Home Buyers’ of the Villa - purchase by way of Agreement of Sale’ and ‘Construction Agreement’, dated 12.07.2011, executed by ‘M/s. Samruddhi Realty Limited’ / ‘Corporate Debtor’, after having paid the ‘whole Sale Consideration’, and after securing ‘Possession - non-application of mind - violation of principles of natural justice - HELD THAT:- In the instant case on hand, it is crystalline clear that ‘No Security Interest’, is created to and in favour of the ‘Appellants / Petitioners’, considering the fact that admittedly, ‘no Registered Sale Deed’, was ‘executed’, by the ‘Appellants / Petitioners’ and the ‘Corporate Debtor’.
It cannot be disputed that the ‘Appellants / Petitioners’, are in ‘Possession of the Property’, in a permissive manner, because of the latent and patent fact that the ‘Corporate Debtor’, gave the key of the Villa to the ‘Appellants / Petitioners’, so as to enable them to start the ‘Interior Work’, and that the ‘Appellants / Petitioners’, had incurred an ‘Expenditure’ of Rs.4,63,000/-, in this regard - It cannot be gainsaid that only the ‘Assets’, that are charged as ‘Security Interest(s)’, will fall outside the ambit of ‘Liquidation Proceedings’. Furthermore, this ‘Tribunal’, bears in mind that the ‘Ownership of the Subject Property’, rests with the ‘Corporate Debtor’. Also, it cannot be brushed aside the ‘Appellants / Petitioners’, had in ‘Form – G’, preferred a Claim of Rs.6,65,191/- for the ‘remaining work’, to be completed in the ‘Subject Property’.
It cannot be gainsaid that in respect of a ‘Sale of an Immovable Property’, which is in ‘Value of more than Rs.100/-‘, it is to be ‘compulsorily Registered’, as per Section 17(1)(b) of the Registration Act, 1908, in the considered opinion of this ‘Tribunal’.
One cannot remain in oblivion of the primordial fact that the term ‘Conveys’ in ‘Section 5 of the Transfer of Property Act, 1882’, only meant for conveying ‘Ownership’, which visualises a ‘Completion’, only in respect of an ‘Execution’ and ‘Registration’ of the valid ‘Deed of Conveyance’.
This ‘Tribunal’, keeping in mind of the surrounding facts and circumstances of the instant case, on a careful consideration of respective contentions, advanced on either side, without ‘haziness’, comes to a resultant conclusion, that ‘to and in favour’ of the ‘Appellants / Petitioners’, ‘No Security Interest’, is created, especially, the admitted fact being, ‘no Registered Sale Deed’, was ‘executed’, and as such, ‘no relief(s)’, can be granted to the ‘Appellants / Petitioners’.
Appeal dismissed.
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2023 (8) TMI 1290
CIRP - approval the resolution plan - Failure to take notice of serious procedural irregularities on the part of the Resolution Professional in the conduct of CIRP - exercise of commercial wisdom of the CoC in approving the resolution plan of Respondent No.3, sustainable or not.
HELD THAT:- The CoC through the Resolution Professional has taken abundant precaution to keep the Adjudicating Authority duly apprised of the developments since the filing of the liquidation application. Thus, there is no lack of transparency on the part of the Resolution Professional or the CoC in updating the Adjudicating Authority of the new resolution plan before it and reasons for seeking its fresh directions. And on its part, the Adjudicating Authority allowed the CoC the opportunity to deliberate upon the resolution plan thereby not infringing on the commercial wisdom of the CoC.
The 19th CoC meeting clearly notes that multiple opportunities given to the Appellant to submit resolution proposal went futile. No viable resolution plans had been received from the PRAs in last two years. It is pertinent to note that the Appellant even at this stage did not make a murmur of protest of being denied a fair opportunity or level playing field in the CIRP process.
Present is a case where the Appellant having been given multiple opportunities to submit a Section 12-A proposal and having consistently failed to do so, there does not appear to be any sufficient ground for the Appellant to claim that prejudice has been caused to their interest in allowing Respondent No.3 to submit their resolution plan - It is also noticed that PRAs had also been afforded reasonable opportunity to submit plans after having issued Form G thrice. The principle of fairness and equity have been reasonably met well - the decision of the CoC to entertain the resolution plan from Respondent No.3 without publication of Form G cannot be viewed to be such a grave procedural non-compliance that the integrity of the entire resolution process was undermined.
There has been no suppression of material facts by the Resolution Professional in informing the CoC or the Adjudicating Authority on the proposal received from Respondent No.3 as PRA. Further, the CoC has approved all his actions including seeking the prior permission of the Adjudicating Authority - the CoC had duly considered and accepted the Resolution Plan for placing before the Adjudicating Authority and this was approved by the Adjudicating Authority vide the second impugned order.
When the CoC has approved a Resolution Plan by 100% voting share after considering its feasibility and viability, such decision of CoC is a commercial decision. There can be no fetters on the commercial wisdom of the CoC. It is settled law that commercial wisdom of CoC in approving the Resolution Plan is not to be interfered in the exercise of jurisdiction of judicial review either by the Adjudicating Authority or by this Tribunal in the exercise of its appellate powers - the Adjudicating Authority did not commit any error and therefore concur in the second impugned order of the Adjudicating Authority approving the resolution plan.
The Adjudicating Authority did not err in approving the resolution plan. In result, both impugned orders do not warrant any interference. Appeals being devoid of merit are dismissed.
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