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Showing 401 to 420 of 779 Records
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2023 (6) TMI 1009
CIRP - assignment of trademark in favor of petitioner - Infringement of seven trademarks, having proprietary rights acquired through a deed of assignment - Refusal of grant an order of injunction restraining Duckbill from using the marks - serious allegation of fraud, misrepresentation and suppression of facts and cheating - HELD THAT:- There is every reason to believe that as a statutory functionary the liquidator acted regularly in the usual course of his duties and found fourteen registered trademarks in the name of the company. He found nothing in the records to suggest that out of those trademarks, seven had been transferred in 2017 - What is most significant is that these marks were assigned by the father-inlaw on behalf of the company to her daughter-in-law for only Rs. 7,000/- whereas about rupees 5 crores have been paid by Duckbill to purchase these marks.
The purported deed of assignment dated 3rd April, 2017 was sought to be lodged with the Registrar on 18th January, 2022 for registering the assignment. This application to record this assignment was made by filling up a form RM-P issued by the Trademark registry. This form provides for an application for post registration changes in a trademark. In the garb of making this application Poulami Mukherjee tried to record with the registry that Duckbill had assigned the seven trademarks to her (see page 168 of the application CAN 2 of 2023) and managed to get the assignment registered on 14th June, 2022.
Under Chapter V of the Trade Marks Act, 1999 the right of assignment and transmission is vested in the registered proprietor. In case of these seven marks, the registered proprietor was Duckbill, the custodian of whose assets was the liquidator. So the real proprietor was the liquidator - a deliberate attempt was made by Poulami and her father-in-law to divest Duckbill of its principal assets that is the trademarks and misappropriating them, by backdating a deed of assignment to 2017 and then filing it with the trademark registry five years later.
This appeal is dismissed by vacating our interim order dated 24th January, 2023. The impugned judgment and order is affirmed by substituting therein the reasons in this judgment and order.
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2023 (6) TMI 1008
Condonation of delay of 14 days in filing appeal - Period of Limitation specified under Section 61 (2) of the I & B Code, 2016 - HELD THAT:- In the present case, from the date of Certified Copy, being made ready Viz. 02.02.2023 and the date of filing of the instant Appeal, on 19.03.2023, the instant Appeal, came to be filed on 45th Day.
The contention of the Respondent is that, the impugned order, came to be passed on 31.01.2023, by the Adjudicating Authority / Tribunal, and the time starts from 01.02.2023 and when the instant Appeal, came to be filed on 19.03.2023, the 46 Days, had elapsed, which is impermissible, because of the fact that an Appeal, is to be filed, within 45 days (30 + 15 = 45 days), being the Outer Limit, and further that, there is no provision in the I & B Code, 2016, to Condone the Delay, beyond the period of 15 days, ofcourse, after the expiry of 30 days, mentioned in Section 61 (2) of the I & B Code, 2016.
As a matter of fact, the word requisite, means properly required, and it is for the Appellant, to show the necessity that no part of delay, beyond the prescribed period, is due to his Default.
Taking note of the primordial fact that the Certified True Copy of the Impugned Order, was made ready by the Office of the Registry of the Adjudicating Authority, on 02.02.2023 (Impugned Order, came to be passed on 31.01.2023), and the instant Appeal, came to be filed on 19.03.2023, before the Office of the Registry, this Tribunal, comes to an inevitable, inescapable and irresistible conclusion, by excluding the time taken by the Adjudicating Authority / Tribunal, to prepare an Order, that the instant Appeal, came to be filed on 45th day (30 + 15 = 45 Days), within the Permissible Time Period, and viewed in that perspective, Condones the Delay of 15 Days (after the expiry of 30 days, vide Section 61 (2) of the Code), that has occurred, in preferring the instant Appeal, before this Tribunal, by accepting the explanation offered, on the side of the Petitioner / Appellant.
Petition allowed.
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2023 (6) TMI 1007
Rejection of Resolution Plan - Section 31(1) of the ‘Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Having observed that the Resolution Plan preferred by one of the Resolution Applicants, required prior approval of RBI, the Adjudicating Authority, while rejecting the Resolution Plan passed an order for Liquidation. The Appellant herein is the Interim Resolution Professional (IRP) whose main grievance is that while ordering Liquidation of the Corporate Debtor, the Adjudicating Authority had appointed the 2nd Respondent herein as the Liquidator contrary to the Statutory Provisions, by disqualifying the Appellant under Section 34 (4)(a) of the Code.
In Company Appeal (AT) (CH) (Ins) No. 181 of 2022 [2023 (6) TMI 505 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI] has set aside the rejection of the Resolution Plan by the Adjudicating Authority holding that this ‘Tribunal’ is of the considered view that the Adjudicating Authority ought not to have rejected the Resolution Plan, more so, when the principal objective of the Code is that ‘revival of the Corporate Debtor and Resolution’. Liquidation ought to be the last resort, keeping in view the scope and spirit of the Code.
As Liquidation itself is set aside, this Company Appeal is rendered infructuous and for all the aforementioned reasons, the present Company Appeal is dismissed as an infructuous one - apepal dismissed.
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2023 (6) TMI 1006
Maintainability of Application for CIRP filed under Section 9 of I&B Code - Sub-contractor of the main contractor - Contractual Relationship between the Appellant and the Respondent or not - privity of contact - whether proceedings under IBC can be sustained on the basis of a promissory estoppel? - HELD THAT:- IEDCL had sub-Contracted the work to the ‘Appellant’/’Operational Creditor’ herein. IEDCL is one of the subsidiaries of IL&FS Solar Power Limited (ISPL)/ the main Contractor which had entered into a contract with ‘Embassy Energy Private Limited’/the ‘Respondent’ herein for operation of the Solar Power Project. It can be seen from the ‘Agreement for Civil Works and Construction’ entered into between Embassy Energy Private Limited/’Respondent’, the owner and ISPL that except for Clause 6.1.1 which deals with the name of the sub-Contractor, any ‘Contractual Obligation’ with the ‘Appellant’ herein is not established by way of any Written Agreement.
From the agreement it is clear that a sub-Contractor shall not have any Contractual Relationship with the owner and shall not be entitled to prefer any Claims against the owner. The material on record establishes that there is no Operational Relationship between the Appellant and the Respondent herein and it is pertinent to mention that the Respondent is not even a party to the Agreements entered into between ISPL and IEDCL and ISPL and the Appellant/Operational Creditor.
It is clear from the record that there are no goods and services supplied directly by the Operational Creditor to the Respondent herein and therefore it cannot be said that there is any Operational Debt between the Operational Creditor and the Respondent herein. Merely because the owner had given a bona fide assurance that if IEDCL fails to pay the amount they would pay the same on their behalf, the amount will not fall within the definition of Operational Debt as defined under Section 5(21) of the Code.
The Hon’ble Supreme Court in the matter of Essar Oil Limited Vs. Hindustan Shipyard Ltd. & Ors. [2015 (7) TMI 373 - SUPREME COURT], has held that when a principal employer grants a contract to a Construction Company the sub-Contractors cannot sue the principal employer for any issues, if payable, as there is no privity of contract between the sub-Contractors and the principal employer.
This Tribunal is of the considered view that any promise made in the letter dated 17.10.2018, specifically having regard to Clause 6.1.4 of the Agreement for Civil Works and Construction entered into between Embassy Energy Private Limited and ISPL, whereby and whereunder, it was clearly specified that the sub-Contractor, would not have any contractual relationship with the owner and would not be entitled to prefer any Claims against the owner, these amounts claimed cannot fall within the definition of acknowledgement of debt in the absence of any contractual relationship between the Operational Creditor and the Respondent herein.
The Respondent is a commercially solvent Company and the scope and objective of the Code is not to send a commercially Solvent Company to Insolvency specifically having regard to the facts of the attendant case on hand - Appeal dismissed.
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2023 (6) TMI 957
Admission of the claim only to the extent of 35.13% - inclusion of this amount in the Resolution Plan - It is submitted by the Learned Counsel for the Appellant that the RP had classified them as Operational Creditors without approving the Notice of the Adjudicating Authority - waterfall mechanism provided under Section 53 of I&B Code - HELD THAT:- In the Judgment of JET AIRCRAFT MAINTENANCE ENGINEERS WELFARE ASSOCIATION VERSUS ASHISH CHHAWCHHARIA RESOLUTION PROFESSIONAL OF JET AIRWAYS (INDIA) LTD. & ORS; ASSOCIATION OF AGGRIEVED WORKMEN OF JET AIRWAYS (INDIA) LTD. VERSUS JET AIRWAYS (INDIA) LTD. & ORS. [2022 (11) TMI 332 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI], a clear direction was given to the Successful Resolution Applicant to make payment of the admitted Claims towards Provident Fund dues and the same was upheld by the Hon’ble Apex Court in JALAN FRITSCH CONSORTIUM VERSUS REGIONAL PROVIDENT FUND COMMISSIONER & ANR. [2023 (3) TMI 223 - SUPREME COURT]. The Hon’ble Apex Court has laid down that the share of workmen dues shall be kept outside the ‘Liquidation assets and the concerned workmen / Employees shall have to be paid the same, out of such Provident fund, Gratuity Fund, if any available. The words, ‘if any available’, cannot be read to mean that the workmen and empolyees are not entitled for Provident fund, Gratuity Fund, Pension fund, if not available with the Liquidator.
As ratio of the Judgement in Jet Aircraft Maintenance Engineers Welfare Association Vs. Ashish Chhawchharia, Resolution Professional of Jet Airways (India) Ltd. & Ors. of this Tribunal was upheld by the Hon’ble Apex Court, this Tribunal is of the earnest view that both Provident Fund and Gratuity Fund is to be paid in full as per the Provisions of EPF and NP Act, 1952 and Payment of Gratuity Act, 1972.
Appeal allowed with a direction to include these amounts in the Resolution Plan.
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2023 (6) TMI 902
Seeking permission from the Adjudicating Authority/Tribunal, to purchase four separate Residential Apartments from the Corporate Debtor - Moratorium was ordered in terms of Section 14 of the Insolvency and Bankruptcy Code, 2016 at the time of Admission of the Application - HELD THAT:- A mere running of the eye over the contents of the ingredients of Section 43(2)(b) of the Insolvency and Bankruptcy Code, 2016 points out latently and patently that if the reliefs sought by the Appellant/Petitioner is granted by this Appellate Tribunal, it will be in the form of Alienating/Disposing/Transferring of the Corporate Debtor in relation to any of its Assets or Beneficial Interest or any Legal Rights arising thereto.
By so doing, the assets of the Corporate Debtor undoubtedly, in the considered subjective opinion of this Tribunal will change in diametrical term and it will also has to effect of placing such Creditor or Surety or Guarantor in the advantageous position than it would have been at the time of distribution of assets being made, in the teeth of ingredients of Section 53 of the Insolvency and Bankruptcy Code, 2016 - It is to be remembered that Moratorium was ordered in terms of Section 14 of the Insolvency and Bankruptcy Code, 2016 at the time of Admission of the Application and that is also not a favourable circumstance to in favour of the Appellant/Petitioner, as opined by this Tribunal.
This Tribunal comes to a resultant conclusion that the conclusion arrived at by the Adjudicating Authority/Tribunal in Dismissing the IA(IBC)/98(KOB)/2020 in IBA/11(KOB)/2020 (preferred by the Appellant/Applicant) by making an observation that the Appellant/Applicant is to wait till the CIRP is over and also that the Resolution Professional cannot handover possession of the four Apartments to the Appellant/Applicant are fee from any legal infirmities or does not suffer from any material irregularities.
Appeal dismissed.
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2023 (6) TMI 852
CIRP - Admissibility of application - pre-existing dispute - disputes were not raised prior to the issuance of the Demand Notice - disputes regarding the performance of the Engine and the quality of the spares that were supplied - HELD THAT:- It is clear that the service recipient ‘agrees to make payment irrespective of the fact whether the said engine is in operation or not at the time of the payment dates as above.’ This term categorically binds the Corporate Debtor to the payment of instalments.
It is found that no dispute regarding the quality of the spares was raised as on 11/09/2019. The MoU is dated 11/07/2018, the first supply of spare parts was made on 23/10/2018 and this email is dated 11/09/2019, from which it can be noted that a period of more than 13 months has lapsed. So, the contention of the Learned Counsel that it is only after the lapse of some time that the Engine efficiency can be ascertained and therefore, the lapse of 13 months from the date of supply of spare parts and 7 months of the Engine being made operational on 03/04/2019 for raising any dispute is justified, cannot be accepted.
In the instant case, the material on record evidences that the dispute raised is spurious, hypothetical and illusory as it was raised only after several months of supply and further there was also a Meeting, whereby there was an attempt to make a part payment. At this juncture, this ‘Tribunal’ pertinently points out that although the reply of the ‘Corporate Debtor’ was not taken on record by the ‘Adjudicating Authority’, all the issues raised by the Appellant have been addressed.
The case of the Appellant that it was ‘only after a lapse of some time’ that the engine efficiency can be ascertained and therefore, the lapse of 13 months in raising the dispute of the spare parts is justified cannot be sustained as ‘there is no specific time frame’ which is established by way of technical specifications to be guided by / or which were mentioned in the MoU with respect to this issue. The fact remains that the spare parts were supplied way back on 25/10/2018 and the first issue was raised almost 11 months thereafter. There is nothing on record to establish that 11 months’ time is required to ascertain the efficiency of an engine - this Tribunal is of the considered opinion that the dispute raised by the Corporate Debtor is only illusionary and moonshine.
There are no substantial grounds to interfere with the Order of the ‘Adjudicating Authority’ and hence this Appeal fails - appeal dismissed.
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2023 (6) TMI 851
Seeking directions to vacate the interim order dated 12.02.2021 passed in the present appeal - to allow the corporate insolvency resolution process of the Corporate Debtor - HELD THAT:- Since the main petition is pending before the Adjudicating Authority, we dispose of both the Appeals i.e. Company Appeal (AT) (Insolvency) No. 79 of 2021 and Company Appeal (AT) (Insolvency) No. 1095 of 2021 with a request to the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench) to decide the main petition on merit at an early date. The Appellant and Respondents are being given liberty to raise all issues, both about fact and law before the Adjudicating Authority.
These Appeals i.e. Company Appeal (AT) (Insolvency) No. 79 of 2021 and Company Appeal (AT) (Insolvency) No. 1095 of 2021 stand disposed of. The interim order dated 12.02.2021 passed by this Tribunal is hereby vacated. Accordingly, Contempt Case (AT) No. 10 of 2021 is also disposed of.
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2023 (6) TMI 795
Initiation of the insolvency process ordered to be proceeded with - principal was paid and there was dispute regarding balance amount - disputed claim - time limitation - Section 9 of IBC - HELD THAT:- In the present case, this Court is of the opinion that the facts which justified the appellants to contend that the amounts claimed by the respondent, were disputed did exist thus justifying the adjudicating authority’s decision to decline the application. The NCLAT in this Court’s opinion, fell into error and holding otherwise.
Appeal allowed.
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2023 (6) TMI 794
Withdrawal of CIRP after approval of Resolution Plan - Whether after approval of the Resolution Plan by Committee of Creditors under Section 30, sub-section (4) and filing an Application before the Adjudicating Authority for its approval, any Settlement Proposal under Section 12A (filed by Ex-Promoter) can be entertained deferring consideration of approval of Resolution Plan by the Adjudicating Authority - NCLAT [2022 (1) TMI 1323 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] held The Adjudicating Authority being not satisfied that there is adequate reason to accept the prayer of the Appellant, no error has been committed by the Adjudicating Authority in rejecting the Application - HELD THAT:- There are no good ground and reason to interfere with the impugned judgment, as the appellant, cannot invoke Section 12A of the Insolvency and Bankruptcy Code, 2016 in the absence of requisite concurrence/consent of 90% of the creditors.
Appeal dismissed.
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2023 (6) TMI 793
CIRP - Prohibition on recovery proceedings against the Corporate debtor - Imposition of moratorium - statutory bar imposed by Section 14 of the Insolvency and Bankruptcy Code, 2016 - resolution plan rejected - requirement of Liquidation of Corporate Debtor - HELD THAT:- The fact remains that the IRP was unable to obtain a resolution plan within the specified time and the resolution plan not having manifested and the request for extension of time has been rejected by the Tribunal, the consequences as provided by the proviso to Section 14 of the IB Code is deemed to have taken effect. The proviso stipulates that if the Adjudicating Authority approves the Resolution Plan under sub-section (1) of Section 31 of the IB Code or passes an order for liquidation of corporate debtor under Section 33 of the IB Code, the moratorium shall cease to have effect.
A conjoint reading of the proviso to Section 14 of the IB Code and the provisions of Section 33 of the IB Code, would show that where the resolution plan is rejected or not accepted, the Tribunal is required to pass an order requiring corporate debtor be liquidated in the manner laid down in the chapter and carry out such other actions as mandated therein.
From a reading of the above, it is apparent that the prohibition under Section 14 of the IB Code prohibiting the initiation of proceedings or continuation of proceedings was in place as on the date of filing of the appeal.
The instant appeal could not have been registered and the parties ought to have awaited the result of the proceedings pending before the NCLT, Chennai in IBA No. 483/2020 - the Registry is directed to return the papers with liberty to the appellant to re-present the same before this Court or before the Competent Forum, in accordance with law.
The appeal stands ordered accordingly and disposed off, for statistical purpose.
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2023 (6) TMI 757
CIRP - Withholding the payments to be made to the petitioner company in relation to the works executed by the petitioner company - allegation of substandard work - liquidated damages - HELD THAT:- It is an admitted fact that the petitioner company has entered into an agreement with the respondents on 27.05.2013 and thereafter in response to the request made by the petitioner, first extension was granted in favour of the petitioner company up to 26.05.2017. But however, though the petitioner company has completed 85% of the work, the balance work could not be completed in view of the change of scope of work which includes preparation of drawings and specifications and also extension of time under a fresh agreement as the specifications in relation to the contract of RE walls is not suitable and therefore the petitioner company suggested for construction of retaining walls with Reinforced Cement Concrete, for which, a fresh agreement was not entered with by the respondents because of which the petitioner’s company would not proceed with the work and thereafter the petitioner company also received a letter dated 11.08.2017 from the 4th respondent stating that the petitioner’s EOT proposals up to 26.12.2017 as requested by them was forwarded to the 3rd respondent vide letter dated 25.05.2017 and the EOT was awaited and it was also stated that the transactions were approved by the competent authority on 10.08.2017 and in view of the changed circumstances, instead of giving extension of time to the petitioner company the respondents got issued a fresh notification calling for tenders though the petitioner has completed 85% of the works.
It also appears that the financial creditors of the petitioner company have approached the NCLT, Chennai under the provisions of IBC Code, 2016 wherein an interim resolution professional was initially appointed and pending the proceedings before the NCLT a publication was made in relation to the claims of any third parties to which the respondents have not responded and have not choosen to file any claim before the NCLT and therefore a final order was passed on 20.07.2020 approving the resolution plan. In view of the same, the respondents are stopped from initiating any coercive measures against the petitioner company.
In view of the above Judgment of the Hon’ble Apex Court in GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR & ORS. [2021 (4) TMI 613 - SUPREME COURT], which was further followed by the High Court of Telangana in the case of The Sirpur Paper Mills Limited, vs. Union of India [2022 (1) TMI 977 - TELANGANA, HIGH COURT], this Court holds that any debt in respect of payment of dues arising under any law for the time being in force including the ones owed to the Central Government or any State Government, or any local authority which does not form a part of the approved resolution plan shall stand extinguished and once a resolution plan is duly approved by the Adjudicating Authority under sub-Section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan.
The writ petition is disposed of directing the respondents to clear the pending bills with regard to 85% of the work completed by the petitioner without deducting the vigilance claim.
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2023 (6) TMI 547
Initiation of CIRP - the claim of the applicant kept in abeyance - existence of dispute - pendency of arbitration - entitlement to participate in the CoC as per Section 21 - HELD THAT:- It transpires that on 17.11.2021, the Adjudicating Authority / Tribunal, had initiated the Corporate Insolvency Resolution Process, against the Respondent / Corporate Debtor, appointed an Interim Resolution Professional and declared Moratorium, as per Section 14 of the I & B Code, 2016.
It is represented on behalf of the Appellant that despite the baseless Claim of the Interim Resolution Professional, that no proof, was attached in regard to the Existence of Debt, the Appellant / Petitioner, had resubmitted the relevant documents, and submit further clarification and information, in their Reply, to the letter of the IRP, dated 8th December 2021, so as to facilitate the process of collation of claims, as undertaken by the Resolution Professional - Before the Adjudicating Authority, the Respondent / Resolution Professional of the Corporate Debtor, in the Counter to IA (IBC) No. 155 / 2022 in CP (IB) No. 58 / 9 / AMR / 2021, had mentioned that only after the Respondent, came to know that there is an Arbitration Proceedings, initiated by the Appellant / Applicant, which is pending, the Respondent / Resolution Professional, had kept the Financial Claim of the Appellant, in abeyance.
The clear cut stand of the Respondent is that, he took all measures to collate, verify, determine all the Valid Claims, which were submitted for the Payment, in the Corporate Insolvency Resolution Process of the Corporate Debtor, and complied with the Provisions of the Code, in a meticulous manner. Because of the Appellant’s Claim, is pending before the Arbitral Tribunal, and the outcome of the said Proceedings will determine, whether the Claim, is to be admitted or rejected, and if it is to be admitted, what is the quantum of Money Claimed and Interest? As such, the Respondent / Resolution Professional, was not in a position, to admit / reject the Claim, and hence, kept in abeyance.
In the instant case, the very fact that the Appellant’s Claim, cannot be admitted, till the counterclaim of the Corporate Debtor, is determined, which may end in set off of the Sum, payable to the Appellant / Petitioner, the plea of the Respondent / Resolution Professional, cannot be brushed aside and in an emergency and also when a situation arises, the Resolution Professional, is within his power and limit, to keep the Claims, in abeyance, for plurality of reasons.
The action of the Resolution Professional, in keeping the Claims, in abeyance, because of the pending Arbitration Proceedings, in regard to the counterclaim of the Corporate Debtor, only after which, the Claim Sum of the Appellant, can be determined with certainty - Appeal dismissed.
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2023 (6) TMI 505
Seeking approval of the Resolution Plan - Section 31(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is significant to mention that Section 238 of the Code, will prevail over any of the provisions of the SARFAESI Act, 2002, if it is inconsistent with any of the Provisions of the ‘I&B Code, 2016’ and therefore the Adjudicating Authority ought not to have placed reliance on Section 10(2) of the SARFAESI Act, 2002. It is also pertinent to mention that the CoC has approved the Resolution Plan by the majority of 98.70% in its 27th meeting, held on 19/10/2020. The Hon’ble Supreme Court in a Catena of Judgments has held that the commercial wisdom of the CoC is non-justifiable and in the instant case, there are no material irregularity, under Section 30(2) of the ‘IBC Code, 2016’.
Keeping in view, the clarification given by the Counsel for RBI that the ‘prior permission’ is not required, this ‘Tribunal’ is of the considered view that the Adjudicating Authority ought not to have rejected the Resolution Plan, more so, when the principal objective of the Code is that ‘revival of the Corporate Debtor and Resolution’. Liquidation ought to be the last resort, keeping in view the scope and spirit of the Code.
The Order of the Adjudicating Authority directing ‘Liquidation’ is set aside and the matter is remanded to the Adjudicating Authority for approval of the Resolution Plan under Section 31(1) of the IBC Code, 2016 - Appeal allowed.
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2023 (6) TMI 504
Initiation of CIRP - Recovery proceedings - Execution of Ex-parte order, passed in arbitration proceedings - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- A Dispute, in existence, means and includes raising a Dispute, before a Court of Law or an Arbitral Tribunal, before receipt of Notice, under Section 8 of the I & B Code, 2016. Further, Dispute, continues at stage, where challenge to an Arbitral Award, in an Appeal, is projected by a Party, as opined by this Tribunal - So long as a Dispute, truly exists in fact and it is not spurious or an imaginary, and not a hypothetical one, an Adjudicating Authority / Tribunal, is to reject, the Petition / Application, filed under the I & B Code, 2016 - an Arbitration Proceedings, and I & B Code Proceedings, cannot go on together, in the considered opinion of this Tribunal.
By virtue of the Arbitration Clause, as per Agreement, the Appellant, had secured the Ex-parte Award, and as against the same, the Respondent / Corporate Debtor, filed an Appeal, in terms of Section 34 of the Act. The very fact that an Appeal, was filed against the Ex-parte Award, by the Respondent, Prima Facie, there exists a Pre-existing Dispute - It cannot be gainsaid that, for initiating a Corporate Insolvency Resolution Process, against the Corporate Debtor, there ought to be no real dispute, existing between the respective Parties, to the Debt, owed in question. So long as the Arbitration Award, was challenged under the relevant Section of the Arbitration and Conciliation Act, 1996, the Operational Debt, in the instant Appeal, is considered to be under Dispute, as opined by this Tribunal.
In so far as the amount awarded in Award, is not Disputed, and in reality, due to efflux of time, the Interest, gets added on the Award Due Amount. As such, the difference in the Amount, mentioned in the Demand Notice, dated 21.02.2019, in the main Petition, and in service Record of Default, with the Information Utility, produced by the Appellant with Affidavit, dated 09.03.2021, will not exhibit any incompatibility, so as to be of any assistance, to the Respondent / Corporate Debtor.
This Tribunal, comes to an inescapable, inevitable and irresistible conclusion that the view arrived at by the Adjudicating Authority’ (‘National Company Law Tribunal’, Bengaluru Bench), in dismissing the main CP (IB) No. 276 / BB / 2019 (filed by the Appellant / Petitioner / Operational Creditor, for recovering the Sum, awarded in Arbitration Proceedings), is free from any Legal Errors - appeal dismissed.
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2023 (6) TMI 418
Application for intervention filed by an unfortunate financial creditor - seeking to intervene in the main appeal filed by the corporate debtor against the order of admission passed in another Corporate Insolvency Resolution Process (CIRP) initiated by another financial creditor - HELD THAT:- The CIRP initiated at the behest of the respondent in the above Civil Appeal is put on hold by this Court and the CIRP initiated by the proposed intervenor is put on hold by the NCLT. Therefore the intervenor is caught in the middle and hence he seeks appropriate directions.
The main contention of the corporate debtor who is the appellant in the above main appeal is that there cannot be two CIRPs simultaneously going on against the same debtor. The said contention is legally well-founded. But today, both CIRPs are on hold. This is despite the fact that the order passed in favour of the proposed intervenor in his own application under Section 7 IBC, by the NCLAT has attained finality and there is no impediment for the CIPR initiated by the proposed intervenor to proceed further - It is understandable that if the CIRP initiated by the respondent in the above civil appeal is on track. If it is not on track, at least the other CIPR should be allowed to proceed. The Corporate Debtor cannot be allowed to have benefit of the best of both the worlds.
Therefore the intervention application is disposed of clarifying that the intervenor may again move an application before the NCLT for restoration.
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2023 (6) TMI 417
Application for Condonation of Delay of 49 days in filing of the Claim under Form – C dismissed - the Claim was filed belatedly by the Applicant after the expiry of 90th day on 06.08.2022 - whether the Adjudicating Authority was justified in rejecting the Condonation of Delay of 49 days in filing the Claim together with the delay in filing the Application before the Adjudicating Authority?
HELD THAT:- A brief perusal of the material on record shows that the CIRP commenced on 21.03.2022, a public announcement was made on 25.03.2022, the last date for filing of the ‘Claims’ was 04.04.2022, the expiry of 90 days is 19.06.2022, whereas the ‘Appellant’ had filed the ‘Claim’ before the RP on 07.08.2022, which is indeed the 139th day of the commencement of the CIRP. The ground taken by the Counsel for the ‘Appellant’ that it was initially filed under ‘Form – B’ as an ‘Operational Creditor’ which was rejected vide email communication dated 03.08.2022, and thereafter the ‘Appellant’ had resubmitted her ‘Claim’ under ‘Form – C’ on 07.08.2022, does not strengthen or substantiate her case as the timelines given under IBC are to be strictly adhered to and any latches on behalf of the ‘Appellant’ in filing, the ‘Claim’ under a wrong category cannot be a substantial ground for condoning the delay.
Moreover, keeping in view the aforenoted dates, it is clear that the actual time period of delay in submitting the ‘Claim Form’ is 125 days. It is also significant to mention that the ‘Appellant’ approached the ‘Adjudicating Authority’, vide I.A.1589/22 with a further delay of 100 days, and the only reason that was given is that they were seeking ‘legal advise’, which the ‘Adjudicating Authority’ has rightly held is only a bald explanation and does not construe a ‘sufficient cause for the delay’.
Reliance placed on ‘Puneet Kaur’ [2022 (6) TMI 108 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI], in support of his case that the NCLAT Principal Bench condoned the delay of the Homebuyers in filing their ‘Claims’. The facts in that matter are distinguishable as the case relates to Homebuyers where there were Builder Buyer Agreements (‘BBA’) and it was held that rightfully some provisions in the Plan/submission of Claims are to be made for the genuine Homebuyers. This decision is not applicable to the facts of this case.
Appeal dismissed.
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2023 (6) TMI 416
Condonation of delay in filing the Appeal - exclusion of the period from 26.12.2022 to 01.05.2023 during which the Appellant - whether the Applicant is entitled for the benefit of Section 14 of the Limitation Act for purposes of the limitation for filing this Appeal under Section 61 of the Code?
HELD THAT:- The Law is well settled that even though Section 14 of the Limitation Act is not strictly applicable in the Appeal filed under Section 61 of the Code but the principles underlying Section 14 are clearly attracted.
The Hon’ble Supreme Court KALPRAJ DHARAMSHI & ANR. VERSUS KOTAK INVESTMENT ADVISORS LTD. & ANR. [2021 (3) TMI 496 - SUPREME COURT] which was a case where the question of applicability of Section 14 of the Limitation Act in an Appeal filed under Section 61 of the Code came for consideration held in the said Judgment that principles underlying Section 14 of the Limitation Act are clearly applicable while considering the limitation for filing an Appeal under Section 61 of the Code - The scope and ambit of Section 14 of the Limitation Act have been considered and explained by Hon’ble Supreme Court in several judgements. In Kalpraj Dharamshi case itself the Hon’ble Supreme Court has noted the conditions that are required to be fulfilled for invoking the provisions.
In Kalpraj Dharamshi case the Hon’ble Supreme Court extended the benefit of Section 14 of the Limitation Act in the Appeal filed under Section 61 of the Code before this Appellate Tribunal.
The expression used in Section 14 are “defect of jurisdiction or other cause of a like nature”. The expression “other cause of a like nature” has been explained and examined in large number of cases by Hon’ble Supreme Court - reference made to the Judgment of the Hon’ble Supreme Court in India Electric Works Ltd. vs. James Mantosh & Anr. [1970 (9) TMI 105 - SUPREME COURT], wherein the Hon’ble Supreme Court had occasion to consider the ambit and scope of Section 14 of the Limitation Act and both the expressions, “from defect of jurisdiction” or “other cause of like nature” came for consideration. The Hon’ble Supreme Court held that if the above words are read alongwith expression “is unable to entertain it”, they would denote that the defect must be of such a character as to make it impossible for the Court to entertain the suit or application either in its inception or at all events as to prevent it from deciding it on the merits.
When Hon’ble Supreme Court in Kalpraj Dharamshi has held that Appellant who has filed an Appeal under Section 61 is entitled for benefit of proceeding which was being prosecuted in the High Court under Article 226 which writ proceedings were also dismissed on the ground of availability of the alternative remedy - following the Judgment of the Hon’ble Supreme Court, the dismissal of writ petition is on the ground something similar or analogous and the benefit of Section 14 cannot be held to be denied to the Appellant.
Power of attorney - HELD THAT:- The fact of the matter is that power of attorney was executed on 01st August, 2022 which has been brought on record and we for the purposes of prosecuting this Appeal, are not persuaded to accept the submission of the Respondent that since power of attorney was executed on stamp paper which was purchased earlier, the Appeal and Application rejected on this ground. Power of attorney has been executed by the Appellant with regard to the Corporate Debtor in question, the objection of the Respondent to reject the Delay Condonation Application on this ground is not persuaded with.
The Appellant is entitled for the exclusion of period from 26th December, 2022 to 01st May, 2023. The Appeal having been e-filed on 19th May, 2023 and after excluding the aforesaid period by giving benefit of Section 14 of the Limitation Act to the Appellant, this Appeal under Section 61 of the Code has to be treated to be filed within 30 days from the date of the Impugned Order.
Appeal is held to be filed within limitation - application disposed off.
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2023 (6) TMI 415
Maintainability of application - initiation of CIRP - Confinement of CIRP to one project - absence of any Project financing being brought in by the Promotor - absence of any Project Wise Accounts - whether the Adjudicating Authority was justified in initially admitting the Section 7 Application against the Corporate Debtor and thereafter confining it to a single Project Dreamz Sumadhur Project only?
HELD THAT:- It is an admitted fact that the three Applicants/Homebuyers who had filed the Section 7 Application were related to Dreamz Sumadhur and subsequent to the calling of the Claims from all Homebuyers, there was lot of confusion and the IRP had filed multiple IAs before the Adjudicating Authority, subsequent to which, this Common Order dated 04.09.2020 was passed clarifying that the CIRP was with respect to one Project, namely Dreamz Sumadhur Project only - This Tribunal in the matter of Ram Kishor Arora Suspended Director of Supertech Ltd. Vs. Union Bank of India & Anr. [2022 (6) TMI 720 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI], passed by the Principal Bench, New Delhi has directed for Project Wise Resolution wherein the IRP was directed to separate the Claims received with regard to the Project.
The scope and objective of the Code is to see that there is Resolution of the Corporate Debtor Company and seek maximization of Assets. A three-Member Bench of the NCLAT, Principal Bench, New Delhi in the matter of Majestic Towers Flat Owners Association & Anr.’ Vs. ‘Housing Development and Infrastructure Ltd. & Ors. [2022 (1) TMI 166 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI], has held that Project Wise Insolvency can be granted to bring about better Resolution and prevent Liquidation as the sufferers would be the Homebuyers who are thousands in numbers in different Projects and if there is a possibility of Project Wise Resolution, reasonable time could be allowed by the Adjudicating Authority to bring about a proper Resolution.
The contention of the ERP/R-18 that another Bench of NCLT Bengaluru has erroneously admitted a Section 7 Application initiating CIRP against another Project namely Dreamz Sneh and that it has to be set aside, is completely unsustainable as the Order was passed in a separate Company Petition dated 15.02.2023, and is based on a different cause of action - Merely because the Adjudicating Authority had relied on Umang Realtech Pvt. Ltd. [2020 (2) TMI 1409 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI]], wherein reverse Insolvency was a principle laid down by the NCLAT Principal Bench, New Delhi, and this Project did not have a Promotor to infuse funds, which was the case in Umang Realtech Pvt. Ltd., the principle of Project Wise Insolvency also discussed in Umang Realtech Pvt. Ltd., cannot be overlooked and requires considerable attention as it applies to the facts of this case.
This Tribunal is of the earnest view that the Impugned Order has nowhere stated that the Promotor was interested in infusing funds into the Project and that reverse CIRP has to be undertaken. In fact, a reference was made to Umang Realtech Pvt. Ltd., decision to substantiate the advantages of Project Wise Resolution and to clarify that the CIRP was confined to Dreamz Sumadhur Project only. As regarding the different Applications filed by the RP seeking relief, this Tribunal is of the considered view that the Adjudicating Authority has rightly observed that most of the reliefs sought for were unrelated to Dreamz Sumadhur Project and are Civil in nature requiring adjudication in other fora as the Adjudicating Authority does not have jurisdiction to foray into matters of title and possession of land which are broadly matters of Civil Litigation and cannot be decided under the provisions of IBC.
As initially the Section 7 Application was admitted against the entire Project and thereafter the clarifications were given by the Adjudicating Authority that the CIRP was confined to Dreamz Sumadhur Project, in the interest of justice, this Tribunal is of the view that the adverse comments made against the RP may be expunged.
This Tribunal does not find any substantial grounds to interfere with the well-reasoned Order of the Adjudicating Authority, National Company Law Tribunal, Bengaluru Bench and hence application fails and is accordingly dismissed.
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2023 (6) TMI 408
Appointment of Interim Resolution Professional - Section 16(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Apparently, the impugned order having been passed on 22.12.2022, it is also pleaded in the writ petition itself that 23.12.2022 was the last working day of the National Company Law Appellate Tribunal and it was to reopen on 02.01.2023 and the petitioner had no notice whether any Vacation Bench was functioning and, therefore, it has been deprived of its statutory remedy of appeal under Section 61 of the Code. Resultantly, writ jurisdiction of this Court was being invoked.
The writ petition is disposed off with liberty to the petitioner to avail his statutory remedy of appeal before the above said Tribunal within a period of two weeks from today.
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