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Insolvency and Bankruptcy - Supreme Court - Case Laws
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- 2020 (10) TMI 548 - SUPREME COURT
Liquidation of Corporate Debtor - Section 33 of the Insolvency and Bankruptcy Code 2016 - HELD THAT:- Liquidation of the Corporate Debtor should be a matter of last resort. The IBC recognizes a wider public interest in resolving corporate insolvencies and its object is not the mere recovery of monies due and outstanding. The appellant has indicated its bona fides, at least prima facie at the present stage, by unconditionally agreeing to subject itself to the forfeiture of an amount of ₹ 20 crores, which has been deposited by it, in the event that it fails to comply with the requirement of depositing an additional amount of ₹ 50 crores within a period of three months in terms of the understanding that was arrived at on 25 February 2020. In order to enable the appellant to have one final opportunity to do so, we direct that the ....... + More
- 2020 (9) TMI 556 - SUPREME COURT
Maintainability of CIRP application - Corporate Debtor failed to make repayment of dues - NCLT allowed the application - NCLAT set aside the order of NCLT on the ground that applicant failed to prove that there was an outstanding amount - HELD THAT:- A bare reading of the NCLT order shows that it is only after a perusal of the documents, pleadings, and the supplementary affidavit of 03.08.2018, including the counter affidavit in the earlier section 7 application, that the NCLT came to the conclusion that a loan amount remained outstanding. The NCLAT, when it dealt with the NCLT order, wrongly recorded that documents which were already rejected by the adjudicating authority could not have been the basis of the order of admission. The NCLAT also wrongly recorded that there was no further evidence in support of the fact that any amount was o....... + More
- 2020 (9) TMI 172 - SUPREME COURT
Viability and feasibility of Resolution Plan - NCLAT remitted /remanded back the matter to the NCLT with a direction to have the Resolution Plan resubmitted before the Committee of Creditors - HELD THAT:- The law is now well settled - reliance can be placed in the case of K. Sashidhar vs. Indian Overseas Bank [2019 (2) TMI 1043 - SUPREME COURT]. The principles laid down in the aforesaid decision, make one thing very clear. If all the factors that need to be taken into account for determining whether or not the corporate debtor can be kept running as a going concern have been placed before the Committee of Creditors and the CoC has taken a conscious decision to approve the resolution plan, then the adjudicating authority will have to switch over to the hands off mode. It is not the case of the corporate debtor or its promoter/Director or a....... + More
- 2020 (9) TMI 124 - SUPREME COURT
Payment of AGR Dues - Exclusive privilege of establishing, maintaining, and working telegraphs - before initiation of insolvency proceedings, most of the telecom service providers who are under the insolvency proceedings had applied to the Department of Telecommunications to grant permission for trading of licence. The Central Government objected on the ground that it would not be possible for it to grant permission - Whether spectrum can be subjected to proceedings under the Code? HELD THAT:- Following directions issued: (i) That for the demand raised by the Department of Telecom in respect of the AGR dues based on the judgment of this Court, there shall not be any dispute raised by any of the Telecom Operators and that there shall not be any reassessment. (ii) That, at the first instance, the respective Telecom Operators shall make....... + More
- 2020 (8) TMI 741 - SUPREME COURT
Maintainability of application - initiation of CIRP - Advance made to Proprietorship firm in 2003 and 2004 - the firm was taken over by the Company - conversion of loan into share - Corporate Debtor failed to make repayment of its dues - time limitation - Existence of financial debit - HELD THAT:- This Applicant, has not placed any material disclosing how this debt is still alive after lapse of three years from the date of disbursement. Whenever any claim is made, when it is beyond three years period as envisaged under Article 136 of the Limitation Act, the person making claim is bound to disclose and explain as to how the debt claim is not barred by limitation. No such effort has been made by these Applicants to prove that this is within limitation. Even if the Corporate Debtor statement is taken as true, the limitation would start runni....... + More
- 2020 (8) TMI 345 - SUPREME COURT
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - three years from the date of the alleged default - whether the application made by respondent No. 2 before NCLAT under Section 7 of the Code is within limitation? - HELD THAT:- The Insolvency and Bankruptcy Code, 2016 has been enacted to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons and other entrepreneurs in a time bound manner so as to ensure maximisation of value of assets of such persons and to balance the interest of all the stakeholders. As regards corporate debtor, the primary focus of the Code is to ensure its revival and continuation by protecting it from its own management and, as far as feasible, to save i....... + More
- 2020 (6) TMI 597 - SUPREME COURT
Maintainability of application - by an order dated September 4, 2019 the petition of the appellant was rejected by the National Company Law Tribunal on the ground of admission of the petition of Dalmia Group Holdings on August 8, 2019 - HELD THAT:- Since the disputes between respondent No. 1 and Dalmia Group Holdings has been settled and the order dated September 19, 2019 has been set aside, it will be open to the appellant to proceed against respondent No. 1 before the National Company Law Tribunal by seeking recall of the order dated September 4, 2018 and revival of its application C. P. (I. B.) No. 4000/ MP/2018. Appeal disposed off.
- 2020 (4) TMI 516 - SUPREME COURT
Initiation of CIRP - Section 65 of the IBC - NCLAT dismissed the appeal on the ground that an objection for admitting application should be raised before NCLT first - It was submitted by the learned counsel appearing for Respondent No.2 that allegation of collusion is unfounded and has no merit - HELD THAT:- Considering the provision of Section 65 of the IBC, it is necessary for the Adjudicating Authority in case such an allegation is raised to go into the same. In case, such an objection is raised or application is filed before the Adjudicating Authority, obviously, it has to be dealt with in accordance with law. The plea of collusion could not have been raised for the first time in the appeal before the NCLAT or before this Court in this appeal - we relegate the appellant to the remedy before the Adjudicating Authority.
- 2020 (3) TMI 1240 - SUPREME COURT
Constitution of CoC - HELD THAT:- We are not inclined to interfere with the order passed by the Tribunal as the case is listed before the NCLAT on 12.03.2020. The NCLAT may decide the matter, if possible on 12.03.2020, or as expeditiously as possible. The CoC may hold the meeting, but the order not to be given effect to till 12.03.2020. The NCLAT may consider whether it is appropriate to extend the aforesaid order or not, of not giving effect to CoC decisions. Appeal disposed off.
- 2020 (3) TMI 34 - SUPREME COURT
Interpretation of Statute - Prohibition during the moratorium period - the recovery of any property by an owner or less or where such property is occupied by or in the possession of the corporate debtor - Section 14(1)(d) of the Insolvency and Bankruptcy Code, 2016 - whether Section 14(1)(d) of the Code will apply to statutorily freeze ‘occupation’ that may have been handed over under a Joint Development Agreement? - HELD THAT:- MHADA Act, as its preamble states, is an Act to unify, consolidate and amend the laws relating to housing, repairing and reconstructing dangerous buildings and carrying out improvement works in slum areas. By Section 4 of the Act, the Authority, i.e. the MHADA, is to be a corporate body, and is deemed to be a local authority for the purposes of the Act. By Section 5 the Rent Act, or any corresponding l....... + More
- 2020 (2) TMI 1259 - SUPREME COURT
Initiation of CIRP - Scope of IBC - Preferential transaction u/s 43 - JIL had committed a default in repayment of its dues - who is the financial creditors of the corporate debtor - mortgage created by the corporate debtor as collateral security of the debt of its holding company JAL - whether the transactions in question deserve to be avoided as being preferential, undervalued and fraudulent, in terms of Sections 43, 45 and 66 of the Code? - HELD THAT:- Looking to the legal fictions created by Section 43 and looking to the duties and responsibilities per Section 25, in our view, for the purpose of application of Section 43 of the Code in any insolvency resolution process, what a resolution professional is ordinarily required to do could be illustrated. (See para 28.1) On a motion made by the resolution professional after and in terms of ....... + More
- 2020 (1) TMI 1185 - SUPREME COURT
Removal of existing management of Unitech Limited and appointment of ten nominee directors - HELD THAT:- List the matters on 10 February 2020 at 2 pm.
- 2020 (1) TMI 903 - SUPREME COURT
Jurisdiction - allegation that NCLAT had exceeded its jurisdiction in directing matching of liquidation value in the resolution plan - HELD THAT:- MSL in the appeal have sought to sustain the resolution plan but their prayer in the interlocutory application is refund of the amount remitted coupled with the plea of withdrawal of resolution plan. However, their main case in the appeal is that final decision on resolution plan should be left to the commercial wisdom of the Committee of Creditors and there is no requirement that resolution plan should match the maximized asset value of the corporate debtors. No provision in the Code or Regulations has been brought to our notice under which the bid of any Resolution Applicant has to match liquidation value arrived at in the manner provided in Clause 35 of the Insolvency and Bankruptcy Board of....... + More
- 2019 (12) TMI 188 - SUPREME COURT
Whether the High Court ought to interfere, under Article 226/227 of the Constitution, with an Order passed by the National Company Law Tribunal in a proceeding under the Insolvency and Bankruptcy Code, 2016, ignoring the availability of a statutory remedy of appeal to the National Company Law Appellate Tribunal and if so, under what circumstances? - HELD THAT:- A lot of stress was made on the effect of Section 14 of IBC, 2016 on the deemed extension of lease. But we do not think that the moratorium provided for in Section 14 could have any impact upon the right of the Government to refuse the extension of lease. The purpose of moratorium is only to preserve the status quo and not to create a new right. Therefore nothing turns on Section 14 of IBC, 2016. Even Section 14 (1) (d), of IBC, 2016, which prohibits, during the period of moratoriu....... + More
- 2019 (11) TMI 1403 - SUPREME COURT
Reconsideration of nil payment to all Operational Creditors as per the Resolution Plan submitted by Committee of Creditors - whether the matter should be sent back to the Committee of Creditors to balance the interests of all the stakeholders and to reconsider the issue - HELD THAT:- It will be open for the parties to argue before the NCLT that the amount that has been paid by the Resolution Applicant should not be enhanced and that the secured creditors should be asked to take a call on whether a further hair-cut needs to be ordered so that the Operational Creditors may also receive some proportion of debts owed to them. All arguments will be open to all the parties to make before the NCLT which will be decided strictly in accordance with our latest judgment - the implementation of the Resolution Plan is not stayed. Appeal disposed off.
- 2019 (11) TMI 1280 - SUPREME COURT
Auction of property of Corporate Debtor - Stay on auction proceedings - CIRP - recovery of the workmen’s dues by sale of the assets of Respondent No. 4 - Company through a public auction - HELD THAT:- In view of the provisions of the IBC, the High Court ought not to have proceeded with the auction of the property of the Corporate Debtor - Respondent No. 4 herein, once the proceedings under the IBC had commenced, and an Order declaring moratorium was passed by the NCLT. The High Court passed the impugned Interim Orders dated 14.08.2019 and 05.09.2019 after the CIRP had commenced in this case. The moratorium having been declared by the NCLT on 04.06.2019, the High Court was not justified in passing the Orders dated 14.08.2019 and 05.09.2019 for carrying out auction of the assets of the Respondent No. 4-Company i.e. the Corporate Debto....... + More
- 2019 (11) TMI 844 - SUPREME COURT
Resolution plan against the owner of land namely SevenHills which was to be developed by the Municipal Corporation (MCGM) - MCGM filed an application claiming that it ought to be declared as a Financial Creditor and a Member of the Committee of Creditors. - Right to terminate the agreement - However, later during the proceedings, it opposed the resolution plan, arguing that being a public body as well as a planning authority, it had to comply with the provisions of the Mumbai Municipal Corporation Act, 1888 (“MMC Act”), which meant that all action and approval had to be taken by the Improvement Committee of the Corporation. - effect of section 92 of MMC Act - NCLT and NCLAT rejected the objection of MCGM HELD THAT:- In the present case, Section 92 of the MMC Act has no bearing on the validity of the resolution plan, the approv....... + More
- 2019 (11) TMI 731 - SUPREME COURT
Corporate Insolvency resolution process (CIRP) - Role of resolution applicants, resolution professionals, the Committee of Creditors that are constituted under the Insolvency and Bankruptcy Code, 2016 - constitutional validity of Sections 4 and 6 of the Insolvency and Bankruptcy Code (Amendment) Act, 2019. Role of the resolution professional in the revival of Corporate Debtor - HELD THAT:- The resolution professional is a person who is not only to manage the affairs of the corporate debtor as a going concern from the stage of admission of an application under Sections 7, 9 or 10 of the Code till a resolution plan is approved by the Adjudicating Authority, but is also a key person who is to appoint and convene meetings of the Committee of Creditors, so that they may decide upon resolution plans that are submitted in accordance with the det....... + More
- 2019 (11) TMI 449 - SUPREME COURT
Whether the finding that the financial creditor was discriminated against, leading the NCLAT to modify the adjudicating authority’s directions, and consequently imposing greater financial burdens on the resolution applicant, is justified? HELD THAT:- Section 30 lays out the duties of the resolution professional and the various steps that she or he has to take, as well as the considerations that are to weigh, in examining a resolution plan. The principle of fairness engrafted in the provision is that the plan should make a provision for repayment of debts of operational creditors having regard to the value, which shall not be less than what is prescribed by the Board (i.e. the Insolvency Board), repayable in the event of liquidation, spelt out in Section 53. Section 30(3) requires the resolution professional to present the resolution....... + More
- 2019 (11) TMI 316 - SUPREME COURT
Initiation of CIRP - Exclusion of period from 17th September, 2018 till 4th June, 2019 for the purpose of counting 270 days Corporate Resolution Process period - power of the NCLT or NCLAT, as the case may be, to exclude any period from the statutory period in exercise of inherent powers sans any express provision in the I & B Code in that regard - HELD THAT:- The inevitable fall out of accepting the stand taken by the appellants would be to set aside the impugned judgment and relegate the parties to a situation where the only option would be to proceed with the liquidation process concerning JIL under Chapter III of Part II of the I & B Code, on the premise that no resolution plan has been received before the expiry of the Insolvency Resolution Process under Section 12 of the I & B Code or being a case of rejection of the res....... + More