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Insolvency and Bankruptcy - Case Laws
Showing 381 to 400 of 8707 Records
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2023 (11) TMI 51
Maintainability of application - initiation of CIRP - Financial Creditor had invoked the Corporate Guarantee on 25.08.2020, which is falling under the period specified under Section 10-A of the IBC, 2016 - HELD THAT:- Before the AA, in Form – I, Part IV, the Appellant had clearly stated that the Bank Guarantee was invoked on 25.08.2020. Since the Corporate Guarantee was invoked on 25.08.2020, the debt became due for payment thereafter. As per the provisions of Section 10-A of IBC, 2016, CIRP cannot be initiated for defaults arising in 12 months period beginning 25.03.2020.
Since the Deed of Guarantee was invoked on 25.08.2020, CIRP cannot be initiated for default in repayment as the default arises in the period excluded by provisions of Section 10A of IBC, 2016. The AA has rightly held that the default falls within the specified period in Section 10-A of the IBC, 2016 and the Application U/s 7 of IBC, 2016 is non maintainable.
Appeal dismissed.
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2023 (10) TMI 1387
Doctrine of merger - Seeking urgent directions for full and proper access to and inspection of all Aircraft documents, records, including its maintenance record/storage preservation records - HELD THAT:- The objection raised by Respondent/RPof Go Air on the doctrine of merger cannot be agreed upon. The doctrine of merger enunciated by the Supreme Court, does not have a universal or unlimited application. For a merger to operate, the superior court must examine the issues and record findings on merits.
The decision in KUNHAYAMMED AND OTHERS VERSUS STATE OF KERALA AND ANOTHER [2000 (7) TMI 67 - SUPREME COURT] also sets forth that doctrine of merger applies once a superior court has disposed of the lis before it. The Supreme Court in the case of Kaikhosrou (Chick) Kavasji Framji v. Union of India [2019 (3) TMI 1961 - SUPREME COURT] has reiterated this and clarified that the merger principle is applicable to a decision on merits.
Thus, the doctrine of merger is applicable only when an Appellate Court has gone into the merits of the case.
In any event, it has now been more than five months, since the Aircraft were grounded by the Respondent/RP of GoAir. A review of the documents and photographs filed by the Petitioners/Lessors show the evident cannibalization of the Aircraft. The Petitioners/Lessors have made out a prima facie case and it has become necessary for this Court to pass additional directions to protect these highly valuable equipment during the pendency of the present case - It is also deemed necessary that the Petitioners/Lessors be permitted to contract a 24 hour security services for all the Aircraft, to be provided at the expense of the Petitioners/Lessors.
The Respondent/RP of Go Air shall within the next fourteen days provide access to the Petitioners/Lessors of the documentations in relation to the Aircraft, the Airframe, its engines and other parts and components - application disposed off.
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2023 (10) TMI 1385
Approval of Resolution Plan - Department of State Tax is a secured creditor or not - HELD THAT:- The issues raised in the appeal are fully covered by the judgment of this Appellate Tribunal in DEPARTMENT OF STATE TAX, THROUGH THE DY. COMMISSIONER OF STATE TAX VERSUS ZICOM SAAS PVT. LTD. & ANR. [2023 (2) TMI 1170 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] where in the appeal filed by Department of State Tax similar issues were decided and it was held that Department of State Tax is not a secured creditor.
Appeal dismissed.
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2023 (10) TMI 1349
Grant of stay - appeal is pending before this Court arising out of a previous order - HELD THAT:- Since the proceedings are still pending before the NCLAT, we are not expressing any view on the merits. However, we grant permission to the appellant to apply before the NCLAT for modification of the order of stay or for vacating the stay - NCLAT may take up the application with all reasonable dispatch preferably within a period of two weeks from the date when the application for modification of the order of stay or for vacating the stay is filed.
Appeal disposed off.
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2023 (10) TMI 1344
Approval of Resolution Plan - Seeking out of turn hearing to record the approval of plan - HELD THAT:- Clause 1(f) in Chapter X of the Resolution Plan states that all claims prior to the NCLT approval date of Governmental Authorities in relation to all taxes which the Appellant was liable to pay shall stand extinguished on the approval date. Clause 1(o) declares that any tax, duty and legal liability for the period prior to approval date will be waived and extinguished. That the instant Appeal filed in 2012 is a claim which existed prior to approval date and stands extinguished by virtue of Resolution Plan. The payment schedules described in the Resolution Plan have been completed. The dispute underlying in the above appeal stands settled under Resolution Plan and nothing survives. It was prayed that appeal may be heard out of turn to record the approval of Resolution Plan by NCLT and the appeal may be disposed accordingly.
Taking note of the fact that the NCLT has approved the Resolution Plan in the insolvency proceedings in regard to the company, the Appeal does not survive any more - appeal dismissed.
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2023 (10) TMI 1305
Categorization of the respondent – Kanoria Chemicals and Industries Ltd. under one of the categories of operational creditors - HELD THAT:- The learned Senior Advocate appearing for the respondent - Kanoria Chemicals and Industries Ltd. states that in view of the order passed today, they will not press the contempt petition.
Appeal disposed off.
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2023 (10) TMI 1257
Rejection of application of the Liquidator - recoveries of customs duties - invocation of the Bank Guarantee(BG) allowed, during the moratorium period in force under section 14 of IBC - It was held by NCLAT that The appeal is devoid of merit and does not deserve to be admitted at the initial stage itself.
HELD THAT:- The appeal is accordingly dismissed.
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2023 (10) TMI 1256
Initiation of CIRP - NCLT admitted the application - Operational Creditors - serious pre-existing disputes between the Corporate Debtor and the Operational Creditor on account of discrepancies in invoices, and levy of bogus charges and overcharging - operational debt exceeds the threshold limit and is an undisputed debt or not - NCLAT held that There are no illegality in the impugned order of the Adjudicating Authority admitting the Section 9 application.
HELD THAT:- There are no reason to interfere with the order of the National Company Law Appellate Tribunal since no substantial question of law is involved in the appeal.
The appeal is accordingly dismissed.
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2023 (10) TMI 1172
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial creditors - existence of debt and dispute or not - It was held by NCLAT that The amount advance of Rs.1.2 Crore cannot be held to be financial debt and no error has been committed by the Adjudicating Authority in rejecting the Section 7 Application - HELD THAT:- There are no reason to interfere with the impugned order - appeal dismissed.
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2023 (10) TMI 1171
Maintainability of section 9 application - initiation of CIRP - Application dismissed on the ground that it is barred by limitation - arbitration clause present in the agreement - eligibility for benefit of Section 14 of the Limitation Act.
It is submitted that there is arbitration clause in the agreement and the suit could not have been decided on merits, hence, the benefit of Section 14 needs to be extended to the Appellant.
Time Limitation - HELD THAT:- Benefit of Section 14 of the Limitation Act was sought by the Appellant on the basis of filing of suit and pendency of the suit during the period 03.10.2017 till 18.07.2022. The suit was withdrawn without any liberty from the Court to institute a fresh proceeding and termination of suit cannot be held on ground of defect of jurisdiction on cause of like nature. Thus, an essential condition for extending the benefit of Section 14 is absent. Thus, the delay in filing Section 9 application with delay cannot be said to be a sufficient cause within the meaning of Section 5.
The benefit for exclusion of the time during which proceedings under SARFAESI Act was pending was based on the observation that the said proceedings are without jurisdiction, on which prima facie finding High Court has granted stay. Hon’ble Supreme Court in Sesh Nath Singh [2021 (3) TMI 1183 - SUPREME COURT] also observed that Section 5 of the Limitation Act is also applicable in proceedings under Section 9 and on sufficient cause, the said delay can be condoned - The Judgment of “Sesh Nath Singh” was in facts and grounds as noted above and does not help the Appellant in the present case.
It is further observed that that the proceedings under IBC are not proceedings for recovery of contractual dues, as is apparent from the facts of the present case the Operational Creditor has initiated proceeding for recovery of its contractual dues arising out of contract between the parties. Suit for recovery of dues was already filed by the Appellant which was withdrawn by the Appellant. It is, however, relevant to notice that withdrawal of the suit was not on the ground contended by the Appellant nor any liberty was granted by the Civil Court to institute a fresh suit nor Appellant at any point of time resorted to the proceeding of arbitration which according to the Appellant was reason for withdrawal of suit.
The present was a case filed by the Operational Creditor only for recovery of its contractual dues with regard to default committed as per the case of the Appellant on 30.04.2015 for stage 1 and 23.10.2018 for stage 2. The Adjudicating Authority did not commit any error in rejecting Section 9 application as barred by time - there are no merit in this Appeal - appeal dismissed.
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2023 (10) TMI 1121
CIRP - Distribution methodology as per categorisation of financial creditors based on the security structure - distribution of the amount of Rs. 351 Crores which has been deposited by the SRA - HELD THAT:- It is true that there was discussion regarding CoC expenses which was to reimburse from the amount as part of the upfront payment to the Financial Creditors but for the voting only two resolutions were put as noted above. The Resolution which received 74.41% vote and was approved was “Resolve that Resolution Plan shall be approved along with the distribution methodology which shall be as per categorisation of Financial Creditors based on the security structure and as discussed in 24th CoC Meeting”. The two discussion methodology was up for consideration that is one based on the share of voting of each financial creditor and other based on security structure of the Financial Creditor.
Even on accepting the argument saying that distribution methodology which was circulated by Process Advisor to all Members of CoC which was also discussed in the meeting it having not specifically approved in the minutes resolution can be read only to mean that distribution methodology based on security structure have been approved - it is clear that CoC expenses which is figured at 4.01 Crores was to be repaid by the members of the CoC which has contributed the COC expenses along with resolution proceeds which clearly indicates that said amount has to be deducted from Rs. 351 Crores Upfront amount.
The payment towards fee of Process Advisor to the CoC was to be contributed by the CoC which required to be reimbursed from the proceeds of the Resolution. The Respondents’ claim deduction of Rs. 4.01 Crores which is under heading COC Expense and Future Litigation Fund which is at page 18 of the Reply of Respondent No. 2 and 3, as held above COC expenses could have been very well deducted from the upfront payment but there is no requirement of deduction of future litigation fund. No Litigation Fund was required to be created nor for that said period any amount need to be deducted from the upfront payment - out of amount of Rs. 4.01 Crores only that much amount need to be deducted, which is COC expenses i.e. which is required to be reimbursed to the CoC as per their contribution.
The Adjudicating Authority ought not to have directed the Monitoring Agency to determine and appropriate the amount. The Adjudicating Authority itself could have considered the issue since there was divergent statement raised before the Adjudicating Authority which is reflected from the pleadings in the Application which was filed by the Respondent No. 1 i.e. I.A. No. 724/KB/2022 and detailed reply filed by the Appellant. The issue as to what is the correct amount to which the Appellant is entitled under the Resolution Plan was very much disputed and raised before the Adjudicating Authority and the Adjudicating Authority ought to have proceeded to determine and ought to have directed for issuance of NDC only after direction for payment of the Resolution Plan.
The Respondents are directed to make the payment of principal balance amount of Rs. 248,02,09,427/- along with accrued interest of Rs. 14,94,28,383/- (upto 10th July, 2024) along with further interest payable upto date of payment within one week from this order which amount shall be transferred in the account, details of which has already been communicated by the Appellant to the ex-RP - Out of Rs. 4.01 Crores which has been deducted towards COC expenses and Future Litigation Fund, only COC Expenses are required to be deducted and any amount towards Future Litigation Fund need not be deducted from the upfront payment. The Ex-RP shall recalculate the amount towards COC Expenses which need only to be deducted from the upfront payment and any amount kept under Future Litigation Fund need to be distributed to the Financial Creditors as per their Security Interest, which amount need to be paid to the Appellant as per its share of security interest and shall be paid by the Resolution Applicant - the Appellant shall issue a No Dues Certificate and execute the assignment agreement in terms of approved resolution plan and hand over title deeds of the corporate debtor within two weeks from the date of the receipt of the payment.
Appeal disposed off.
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2023 (10) TMI 1120
Rejection of application seeking a direction to the Resolution Professional to convene a meeting of the CoC to comply with the provision of Regulation 39(3)(b) of the CIRP - HELD THAT:- The time for filing the Affidavit already extended by order dated 18.09.2023. Now the CoC having approved the Resolution Plan with voting share of 99.84%, Resolution Professional seeks liberty to file an application before the Adjudicating Authority for approval of the Resolution Plan - Considering the facts of the present case, the highest Resolution Plan having now received the majority of votes, the Resolution Professional may file an application before the Adjudicating Authority for approval of the plan which may be done within three weeks from today.
Nothing survives to be decided in this Appeal - Appeal disposed off.
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2023 (10) TMI 1119
Violation of principles of natural justice - impugned order passed without perusing the law of the land (the Code) and also ignoring the precedent cases - Levy of penalty u/s 70 of IBC - HELD THAT:- It is concluded that clearly the Adjudicating Authority erred in passing the Impugned Order overlooking the law of the land (the Code) and also ignoring the precedent cases settled by this Appellate Tribunal.
The impugned order cannot be sustained - matter remanded back to the National Company Law Tribunal, New Delhi Bench, Court - III to have a fresh look of the case and decide in accordance with the law and pass suitable order.
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2023 (10) TMI 1096
Existence of vested right to file a Resolution Plan pursuant to the process in published Form – G - approval of Resolution Plan - HELD THAT:- The Appellant does not have any vested right in submitting the Resolution Plan in the absence of filing one Plan pursuant to Form – G, and taking the right steps at the appropriate time, specifically keeping in view that the Appellant had attended the 5th CoC Meeting when the entire contours of the Resolution Plan was discussed.
Reliance on the Judgment of the Hon’ble Apex Court in the matter of MAHARASHTRA SEAMLESS LIMITED VERSUS PADMANABHAN VENKATESH & OTHERS [2020 (1) TMI 903 - SUPREME COURT] in which the Hon’ble Apex Court has held Certain allegations were made by the MSL over failure on the part of the Resolution Professional in taking possession of the assets of the corporate debtor and subsequently in their failure in handing over the same to MSL. These issues are factual.
The ratio of the aforenoted Judgment directly contradicts the contention of the Appellant that the bid value has to match the liquidation value. It is significant to mention that the Resolution Plan has already been implemented and we do not wish to set the clock back.
This Tribunal is of the considered view that there is no illegality in the Order of the ‘Adjudicating Authority’ dismissing the Intervention Application - Appeal dismissed.
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2023 (10) TMI 1095
Seeking condonation of delay of 3 days in preferring the Appeal - Condonation sought on the ground that the Impugned Order was passed on 11/04/2023 and the Applicant had tried to apply for the Order copy on the very same date, but was informed by the Registry that the same could be applied after the Order was uploaded - HELD THAT:- From the Report sent by Deputy Registrar of NCLT, it is clear that the Order was uploaded on 19/04/2023 and that the Appellant had applied for the Certified Copy only on 04/05/2023, which was issued to the Counsel Mr. P. Gowthaman on the very same day. Therefore, even if we take into consideration, 45 days from the date of 19/04/2023, the time lapses on 02/06/2023 and this Appeal has been preferred on 06/06/2023, and is clearly barred by limitation.
Further the Hon’ble Supreme Court in the matter of ‘National Spot Exchange Limited Vs. Anil Kohli, Resolution Professional for Dunar Foods Limited’ [2021 (9) TMI 1156 - SUPREME COURT] held that as per the proviso to Section 61(2) of the Code, the Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of 30 days if it is satisfied that there was sufficient cause for not filing the appeal, but such period shall not exceed 15 days. Therefore, the Appellate Tribunal has no jurisdiction at all to condone the delay exceeding 15 days from the period of 30 days, as contemplated under Section 61(2) of the IB Code.
This Appeal is barred by limitation and is dismissed.
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2023 (10) TMI 1001
Challenge to resolution plan as approved by the CoC - Reduction of the claim of the home buyers / creditors - to be ranked at the top in terms of the waterfall mechanism or not - HELD THAT:- In the present facts of the case, it is found that the Appellants were given a chance to raise their objections before the RP as well as the Authorized Representative of the Home Buyers. The RP did not falter in accepting their claims in spite of expressing some reservations initially. The RP had also facilitated the Appellants in routing their objections to the Authorized Representative and the latter had provided them the window of opportunity of taking up their issues with the resolution applicants.
The RP and the Authorized Representative did not fail in the discharge of their responsibilities and no cause of action survives on this count.
Once the CoC has approved the resolution plan by requisite majority and the same is in consonance with applicable provisions of law the same cannot be a subject matter of judicial review and modification - the plea raised by the Appellants that the Adjudicating Authority had committed an error in rejecting their IA without having considered the main petition seeking approval of the resolution plan, is not impressing.
Merely because there is a reduction in the claim of any creditor does not make the resolution plan fall foul of law. We quite agree with the Adjudicating Authority that “resolution plan providing a lesser amount than admitted does not make it illegal”. Any clause in the resolution plan which requires creditors to take a hair-cut cannot be construed as being violative of Section 30(2)(e) of the IBC.
There is nothing to show that there has been transgression of the bounds of rules and regulations which have caused any serious miscarriage of justice to the Appellants - the Adjudicating Authority did not commit any error in dismissing Application.
There are no good grounds to entertain this appeal. Appeal is dismissed.
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2023 (10) TMI 1000
Initiation of CIRP - Rejection of Section 7 application - status of the decree-holder - Real Estate Allottee or not - NCLT held that, being a single allotment, does not meet the threshold requirement as per second proviso to Section 7(1) of the I&B Code - HELD THAT:- Respondent has relied on judgment of Hon’ble Supreme Court in VISHAL CHELANI & ORS. VERSUS DEBASHIS NANDA [2023 (10) TMI 949 - SUPREME COURT] where in it has been held that to treat a particular segment of that class differently for the purposes of another enactment, on the ground that one or some of them had elected to take back the deposits together with such interest as ordered by the competent authority, would be highly inequitable.
In view of the law laid down by the Hon’ble Supreme Court, it is now well settled that the status of the party i.e. allottee does not change and therefore the Adjudicating Authority has rightly concluded that threshold being not met one allottee cannot trigger the insolvency.
The rejection of Section 7 application cannot be faulted - there are no merit in the appeal - appeal dismissed.
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2023 (10) TMI 949
CIRP - Home Buyers - Contention that, Resolution Professional (RP) treated them differently from other home buyers allottees - Financial Creditors or not - scope of Financial Debt - HELD THAT:- With the introduction of the explanation home buyers and allottees of real estate projects were included in the class of “financial creditors” - because financial debt is owed to them. On a plain reading of Section 5 (8)(f) no distinction is per se made out between different classes of financial creditors for the purposes of drawing a resolution plan. Consequently, the reasoning of the Mumbai Bench of NCLT “Mr. Natwar Agrawal(HUF)” is correct in the opinion of this Court.
The Resolution Professional’s view appears to be that once an allottee seeks remedies under RERA, and opts for return of money in terms of the order made in her favour, it is not open for her to be treated in the class of home buyer. This Court is unpersuaded by the submission. It is only home buyers that can approach and seek remedies under RERA – no others. In such circumstances, to treat a particular segment of that class differently for the purposes of another enactment, on the ground that one or some of them had elected to take back the deposits together with such interest as ordered by the competent authority, would be highly inequitable.
As held in MR. NATWAR AGRAWAL (HUF) VERSUS MS. SSAKASH DEVELOPERS & BUILDERS PVT. LTD. [2023 (8) TMI 1362 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI] by the Mumbai Bench of National Company Law Tribunal the underlying claim of an aggrieved party is crystallized in the form of a Court order or decree. That does not alter or disturb the status of the concerned party, in the present case of allottees as financial creditors. Furthermore, Section 238 of the IBC contains a non obstante clause which gives overriding effect to its provisions.
The appellants are declared as financial creditors within the meaning of Section 5(8)(f) (Explanation) and entitled to be treated as such along with other home buyers/financial creditors for the purposes of the resolution plan which is awaiting final decision before the adjudicating authority.
Appeal allowed.
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2023 (10) TMI 895
Initiation of CIRP u/s 7 - NCLT / NCLAT admitted the application - time limitation - A request for one time settlement (OTC) was made - The NCLT treated this letter to be an acknowledgement of debt - composite claims of the banks - NPA - long history of litigation before DRT - non-revival of right to sue - HELD THAT:- This Court has construed the purpose of the said provision to include bringing an action under the IBC on the strength of Section 19(22) and (22A) of the 1993 Act. In the said provision, however, so far as bringing a winding-up action is concerned, the right of a recovery certificate-holder as a deemed-decree holder has been confined to companies registered under the Companies Act, 2013 and certain other entities with which we are not concerned here. But in relation to initiating proceeding under the IBC or making a claim under the said Code, the restriction does not remain confined to the Companies Act, 2013. The corporate debtor in this proceeding was incorporated under the Companies Act, 1956.
In the case of Kotak Mahindra [2022 (8) TMI 329 - SUPREME COURT], credit facilities were extended to the borrower entities in the years 199394. It is obvious that the three corporate entities involved in that case were incorporated under the Companies Act that prevailed prior to coming into operation of 2013 Act. The position of law to guide the subject proceeding should be the same. In the event a financial creditor wants to pursue a recovery certificate as a deemed decree, he would get twelve years’ time.
The argument of the appellant about maintainability of the application out of which this appeal arises on the ground of the application being barred under limitation, is not satisfying. The application with respect to the two recovery certificates issued in the year 2017 is maintainable. In the event the Appellate Tribunal is of opinion that the CIRP could not lie so far as the recovery certificate of 2015 is concerned, as the decree would be still alive, the claim based on the said recovery certificate could be segregated from the composite claim and the Committee of Creditors shall, in that event, treat the sum reflected in the said recovery certificate as part of the claims made in pursuance of the public announcement. This direction issued in exercise of our jurisdiction under Article 142 of the Constitution of India.
Appeal dismissed.
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2023 (10) TMI 894
Jurisdiction to extend the limitation for completion of the Corporate Insolvency Resolution Process (CIRP) beyond the statutory period as prescribed under Section 12 of IBC of 2016.
HELD THAT:- Hon’ble the Supreme Court in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT] while striking down the word “mandatorily”, was of the view that if the CIRP is on the verge of being settled, then in such exceptional cases, the time for completion of the process may be extended even beyond the period of 330 days as stipulated in second proviso to Section 12(3) of IBC of 2016. Thus, any proposal for extension of CIRP beyond 330 days should clearly reflect that the extension was being granted on account of the fact that the CIRP was nearing completion and grant of one further extension would result to a positive outcome so that the Corporate Debtor could be put back on its feet.
However, bare perusal of the order dated 25.08.2022, passed by the NCLT, Guwahati Bench makes it clear that there is no such indication in the order that the extension was being granted for the reason that the resolution plans submitted on record, were likely to revive and bring the Corporate Debtor back on its feet.
Rather a perusal of the order would indicate that the same has been rendered in gross ignorance to the mandate of first proviso to Section 12(3) of the IBC of 2016.
Appeal dismissed.
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