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Insolvency and Bankruptcy - Case Laws
Showing 21 to 40 of 42 Records
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2018 (3) TMI 1696 - NATIONAL COMPANY LAW TRIBUNAL CHENNAI
Extension of the period of CIRP under section 12 of IBC, 2016 for a period of 90 days - Held that:- The Application is allowed. The CIRP period is extended for further period of 90 days with effect from 03.03.2018 onwards.
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2018 (3) TMI 1605 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Counting the period of ‘corporate insolvency resolution process’ - extend the period of Resolution process - Held that:- Adjudicating Authority has not hold that the subject matter of the case do not justify to extend the period. It has not been rejected on the ground that the committee of creditors or resolution professional has not justified their performance during the 180 days. Adjudicating Authority was required to extend the period of Resolution process to enable the Committee of Creditor to find out whether a suitable resolution plan is to be approved or not instead of passing order for liquidation, which is the last recourse to be taken on failure of resolution process.
We set aside the impugned order dated 9th January, 2018 and extend the period of resolution process for another 90 days to be counted from today. The period between 181st day and passing of this order shall not be counted for any purpose and is to be excluded for all purpose. Now the Resolution Professional, Committee of Creditors and the Adjudicating Authority will proceed in accordance with law.
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2018 (3) TMI 1455 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Initiation of Corporate Insolvency Resolution process - default in making repayment of the loan facility availed from the Bank on 31.05.2011 - Held that:- Referring to material papers filed by the petitioner, it is no doubt fact that the corporate debtor availed loan facilities from the Petitioner and thereafter defaulted in making repayment to the Petitioner Bank, therefore the only consideration left to be decided by this Bench is as to whether this claim is barred by limitation or not. This Bench being satisfied that the Petitioner furnished all the material papers reflecting existence of debt and default within limitation, and the name of the Resolution Professional proposed to act as Interim Resolution Professional, this Bench hereby admits this application
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2018 (3) TMI 1454 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Bar of jurisdiction under Insolvency & Bankruptcy Code - action by District Disaster Management Authority sinking FDD - impact on the corporate debtors - Held that:- the subject matter involved in this case is not auction of the FDD but it is an action in progress in pursuance of the order given under the Disaster Management Act, 2005. When such an action being ordered, can anybody remain waiting until the Resolution Professional/Corporate Debtor take necessary steps to remove the sinking FDD from the Port.
If for any reason, such salvage operations are put to stay in the light of the declaration of moratorium, what will happen if any grave occurrence taken place? Instead of applying equity, let us look into as to whether overriding effect and the moratorium directions given under Insolvency & Bankruptcy Code will have any bearing on the Disaster Management Act, 2005.
In view of the legal position as on today existing, can it be construed that Insolvency & Bankruptcy Code, simply for the reason of later enactment, prevails over the Act of 2005? To our belief, it can’t be, because this Tribunal is barred to interfere with the jurisdiction exercised by the Collector of Goa.
In the light of this background, we don’t even believe that we need to further clarify that operation of fields under both enactments is distinct and therefore overriding effect will not operate on the Act of 2005. Once jurisdiction itself is barred to this Adjudicating Authority under section 71 of the Act 2005, this Bench could not even look into the merits as to whether such order is right or wrong or into maintainability of the proceedings initiated or orders issued under the Act of 2005, let alone overriding effect of Insolvency & Bankruptcy Code on the Disaster Management Act, 2005.
This Corporate Debtor has to go before Hon’ble High Court of Bombay-Goa by way of filing Writ Petition or by making its grievance in the Writ Petition already pending before the Hon’ble High Court of Bombay-Goa.
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2018 (3) TMI 1320 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Institution of proceedings in NCLT - Held that:- No bar on NCLT to trigger an Insolvency Resolution Process on an application filed under sections 7,9 & 10 if a winding up petition is pending unless an official liquidator has been appointed and a winding up order is passed. The cognate question as to whether Insolvency Resolution Process could be triggered where official/provisional liquidator has been appointed is left open as in none of the cases before us such a question would arise.
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2018 (3) TMI 1319 - NATIONAL COMPANY LAW TRIBUNAL, CHANDIGARH
Initiate insolvency resolution process against the respondent-corporate debtor - existence of debt on the basis of assignment deed - application by competent person - Held that:- the document of assignment cannot be rejected by this Tribunal while disposing of the instant petition on the ground of being insufficiently stamped though the petitioner would be bound by the consequences if any adverse order on changing of stamp duty comes into play.
As the financial creditor has been able to show the existence of default committed by the respondent-corporate debtor on the basis of evidence furnished by the financial creditor.
There was no dispute of the respondent-corporate debtor to have borrowed the debt from the Bank and that the respondentcorporate debtor is in default as defined in Section 3(12) of the Code. The "default" means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not repaid by the debtor or the corporate debtor, as the case may be.
The other requirement of sub-Section (3) of Section 7 of the code is that the financial creditor is to propose the name of the Resolution Professional to act as Interim Resolution Professional. In this case, the financial creditor has proposed the name of Mr.Manoj Sehgal, registered Resolution Professional with the IBBI to act as Interim Resolution Professional and filed written communication in Form No.2 Annexure-116 which is found in order. He has furnished his registration number also.
The application being complete and it is made out that the corporate debtor has committed default, the petition deserves to be admitted.
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2018 (3) TMI 1267 - NATIONAL COMPANY LAW TRIBUNAL KOLKATA
Corporate insolvency process - Committee of Creditor (CoC) - whether the Resolution Professional has to take a decision regarding the Resolution applicants eligibility in considering the resolution plan before submission of the Resolution Plan to the CoC and is bound to communicate his decision as to eligibility of resolution applicants to the objectors who are not strangers but one among the resolution applicants - Held that:- Only that resolution plan meets the requirement as provided under sub section (2) of section 30 of the I&B code shall present to the CoC. Nothing in the reply affidavit to satisfy that the RP has taken a justifiable decision in regards eligibility of the resolution applicants whose plans were submitted to the CoC. What he relied as per the reply affidavit is the affidavit and documents submitted by the resolution applicants. Those documents not at all produced for the perusal of this Bench.
The decision taken by the RP regarding the eligibility of the resolution applicants as per section 29A of the Code is with out considering the objections raised by the applicants in the case in hand. Mere pleading in the reply affidavit that RP has considered all objections raised by the applicants seems to have devoid of any merit. More over the pleading in it indicate that the Ld.RP had no knowledge about the connected persons conviction detailed above in a foreign Court.
Whether the RP is duty bound to inform the decisions in respect of the objections regarding Eligibility of the resolution applicants to the objectors? - Held that:- RP has to record his reasons for taking any decisions he has to take in the process of finding out a resolution applicant, that he has to record all information and evidence he has collected for enabling to take a decision so as to see that a reasonable prudent person to take a view on the appropriateness of his decisions. What is prohibited is only in making any private communication with any of the stake holders. Even if he wishes to make such communication in the interest of finding out a reputable resolution applicant he can with prior permission of the Adjudicating Authority. Here in this case he neither produced any proof in support of his decisions along with the reply affidavit nor able to submit any materials for the perusal of the Bench at the time of hearing the applications.
Information in respect of decision taken by the RP in holding that Tata Steel Ltd, and Vedanta Ltd. is eligible and that what materials he relied upon for holding such a decision is not at all violate Clause 21 of IBBI (I P) Regulation as alleged. In view of the above said it appears to me that Ld. RP is obliged to communicate the decisions, he had taken in holding the eligibility of the disputed resolution applicants overruling the objections of the applicants.
Whether this Adjudicating Authority has to take a decision in respect of the eligibility of the resolution applicants under section 29A of the code - Held that:- Legislative intention behind introduction of section 29A and proviso to section 30 of the Code is with an object to prevent any tainted stakeholders or any stake holders whose related or connected parties or persons is a defaulter or a convict as per the provisions of section 29A and no such stake holders cannot in any way become a resolution applicant for participating in the bidding for stressed assets. The RP as well as CoC at present is equally responsible for safeguarding the interest and assets of a corporate debtor under the insolvency resolution process and would take as much caution in order to see any applicants or the applicants related or connected persons falls with in the purview of Section 29A. not at all an applicant qualified for submission of a resolution plan. That being the statutory duty upon CoC, it appears to me that this Bench cannot pass an order regarding the eligibility of the resolution applicants as it is under consideration of CoC.
Accordingly, these applications are liable to be allowed in part with following directions:-
(i) A copy of the decision taken by the RP in respect of eligibility of resolution applicant Tata Steal Ltd and Vedanta Ltd, as per section 29A, with supporting reasons for taking the decisions is to be given to the applicant with in three days of the date of this order with proper acknowledgement;
(ii) The applicants are allowed to submit its reply or its further objections if any to the decisions taken by the RP to him in person or through by e-mail with in three days of the date of receipt of the copy of the decision as directed above;
(iii) The RP is directed to place all the objections of the applicants with supporting documents before the CoC with a copy of this order for its independent consideration as per proviso to section 30 of the Code.
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2018 (3) TMI 1266 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Initiation of Corporate Insolvency Resolution Process - exintence of eligible debt - cancellation of allotment of shop - failure to handover the possession of shop - construction has not been commenced - Held that:- the present claim falls within the purview of contractual liability requiring investigation and not a simplicitor “financial debt”. It is pertinent to note here that Claims of home buyers and claims arising out of complex financial instruments preferred before IRP under the Regulations are treated as different category claims, distinct and separate from claims of financial and operational creditors. Such home buyers and contractual claimants on suo moto cancellation of their respective contracts cannot come within purview of financial creditor.
Neither the present claim can be termed as a financial debt nor do the applicants come within the meaning of financial creditor. Accordingly, the present application filed under Section 7 of the Code stands dismissed as not maintainable.
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2018 (3) TMI 903 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Initiation of Corporate Insolvency Resolution Process - Held that:- The Insolvency and Bankruptcy Code, 2016 is a complete Code in itself. The provisions of the Code are to be mandatorily followed. Tribunal cannot exercise the power as enshrined in Article 142 of the Constitution of India. Adherence to the statutory requirements has to be in toto. Section 10 (4) (a) of the Code mandates the Adjudicating Authority to admit the application if it is complete. When the language of the Code is clear and explicit the Adjudicating Authority must give effect to it, whatever may be the consequences.
The stand of Canara Bank that the applicant has not come with clean hands and has suppressed facts, cannot be a ground to reject the application if it is otherwise complete.
Also it is no longer res integra that pendency of a suit or court proceedings is no bar for initiation of insolvency proceedings under the Code. In view of the overriding effect given by the provisions of Section 238 of the Code, the initiation and pendency of proceedings before DRT is no bar for initiation of resolution and insolvency proceedings under the Code. Hence, the objections raised by the financial creditor cannot sustain.
The present application is complete and that the applicant corporate debtor has committed a default. Therefore, as the application is complete the present application is admitted under section 10 (4) (a) of the Code. The corporate insolvency resolution process shall commence from the date of this order under sub-section 5 of Section 10 of the Code.
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2018 (3) TMI 902 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Deed of guarantee executed by the guarantors duly stamped - whether or not this company petition be admitted basing on this deed of guarantee? - Held that:- For the Corporate Debtor themselves agreed that the right against the principal borrower and the corporate guarantors is co extensive, the creditor need not remain in waiting until the realisable claim is crystalized from the principal borrower. Since the right against the principal borrower not being extinguished in making the claim against the principal borrower, the creditor has every right as per law to proceed against the Corporate Debtors therefore, we have not found any merit in the arguments made by the Corporate Debtors Counsel.
Whether these proceedings are liable to be stayed as prayed by the corporate debtors.
On perusal of the provisions of the Insolvency & Bankruptcy Code as well as Indian Contract Act, we have not seen any impediment in proceeding against the guarantors under any provision of law, much less under Insolvency & Bankruptcy Code, whereby we have not found any sufficient cause to stay these proceedings against these Corporate Debtors.
On having already stated the Creditor has furnished the material showing existence of debt and default by the principal borrower, these Company Petitions are in fact fit to be admitted for declaration of moratorium as envisaged under Section 14 of the Code.
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2018 (3) TMI 657 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL COMPANY APPELLATE JURISDICTION
Stay of proceedings under SARFAESI Act 2002, including the auction notice - 'Moratorium’ applicability to the property of the ‘Corporate Debtor’ - Approval of resolution plan - ‘Financial Creditor’, including Appellant-State Bank of India to proceed against the ‘Personal Guarantor’ of the ‘Corporate Debtor’ - Held that:- Only institution of suits or continuation of pending suits or proceedings against the ‘Corporate Debtor’ are prohibited from proceedings, in terms of clause (b) of sub-section (1) of Section 14 of the ‘I&B Code’, transfer, encumbrance, alienation or disposal of any of its assets of the ‘Corporate Debtor’ and/ or any legal right or beneficial interest therein are prohibited. Clauses (c) & (d) of sub-section (1) of Section 14 of the ‘I&B Code’ prohibits recovery or enforcement of any security interest created by the corporate debtor in respect of its property including the property occupied by it or in the possession of the ‘Corporate Debtor’.
‘Resolution Plan’ if approved by the ‘Committee of Creditors’ under sub-section (4) of Section 30 and if the same meets the requirements as referred to in sub-section (2) of Section 30 and once approved by the ‘Adjudicating Authority’ is not only binding on the ‘Corporate Debtor’, but also on its employees, members, creditors, guarantors and other stakeholders involved in the ‘Resolution Plan’, including the ‘Personal Guarantor’.
Thus we hold that the ‘Moratorium’ will not only be applicable to the property of the ‘Corporate Debtor’ but also on the ‘Personal Guarantor’. Appeal dismissed.
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2018 (3) TMI 574 - DELHI HIGH COURT
Corporate insolvency process - Registration as an Insolvency Profession (I.P.) has been rejected - Held that:- What is not disputed by the learned counsel for the petitioner is that an FIR bearing No.RC/219/2012, dated 3.7.2012, has been registered against the petitioner. As a matter of fact, the registration of the FIR has been followed by the prosecution filing a chargesheet in the matter, on 17.02.2014.
Writ petition at this juncture is in a sense pre-mature. The petitioner, therefore, is given liberty to approach this Court, once the discharge application is disposed of by the concerned Trial Court. Given the fact that the discharge application was filed as far back as on 13.01.2016, the concerned Trial Court is requested to take up the application for adjudication and dispose of the same at the earliest.
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2018 (3) TMI 573 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Condonation of delay - Rejection of Financial Creditors claim by the Liquidator as per an order of rejection by way of an Electronic Mail - whether the adjudicating authority can condone the delay and direct the liquidator to reconsider the claim on its merits? - Held that:- On reading of Rules 177 and 178, of the Companies (Court) Rules, 1959 and reading section 40(1) of the Code, it appears that one more opportunity can be allowed to the claimant here in the instant case who failed in submission of its claim in time. But there is no undue delay though the reason for the delay in submission of the claim is found not at all satisfactory. Delay condoned.
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2018 (3) TMI 572 - NATIONAL COMPANY LAW TRIBUNAL, CHANDIGARH
Order of liquidation - period of 180 days for completion of the resolution process as provided under Section 12 (1) of IBC expired - Held that:- Admittedly the period of 180 days for completion of the resolution process as provided under Section 12 (1) of the Insolvency and Bankruptcy Code, 2016 expired on 08.01.2018. While monitoring the progress reports submitted by the Resolution Professional, Registrar of this Tribunal put up a note that the period of 180 days has expired and the Resolution Professional informed that the application for liquidation proceedings would be filed. The matter was directed to be listed on the judicial side with notice to the Resolution Professional.
In view of the mandate of Section 33 (1) of I & B Code there is no other alternative except to pass an order of liquidation. It was found fit to appoint a Liquidator from the panel of Liquidators/Insolvency Resolution Professionals circulated by Insolvency and Bankruptcy Board of India vide letter dated 10.01.2018 instead of Mr. Nipan Bansal who was appointed as the Resolution Professional, for the reasons stated in the order dated 31.01.2018.
Accordingly, an order is passed in accordance with Section 33 of the Code for liquidation of the Corporate Debtor appointing Mr. Dinesh Kumar Seth as the Liquidator. The Liquidator shall issue public announcement to the effect that the Corporate Debtor is in liquidation and to intimate the same to Registrar of Companies, Punjab about this order.
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2018 (3) TMI 390 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Initiation of Corporate Insolvency process - prior notice under Section 8 of the Code - Held that:- In view of the statutory provisions of the Code and settled precedents a prior notice under Section 8 of the Code is mandatory before filing of an application under Section 9 of the Code. In the present case admittedly after withdrawal of the earlier application no notice under Section 8 has been issued. It is also relevant to note here that non-issuance of Section 8 notice prior to filing of the present application is a non-curable defect, which cannot be cured at this stage. Issuance of notice under Section 8 is an act that should have been done prior to filing of the present application. In the absence of issuance of such notice, the present application is not maintainable.
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2018 (3) TMI 320 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Corporate insolvency process - existence of operational debt - failure to make payment against procurement of paddy - Held that:- As per the invoices issued by the Operational Creditor with regard to supply of paddy to the Operational Debtor it is proved beyond doubt that ‘goods’ in terms of Section 5(21) of the Code were procured by the Operational Debtor from the Operational Creditor on various occasions. It is patent from a perusal of the VAT D-2 form (from pg. 216-220) issued by the Respondent Company that it acknowledges the receipts of 1203 quintals of paddy from the petitioner firm. For determination of the aforesaid issue it would be necessary to read the definition of the expression ‘Operational Debt’ given in Section 5(21) of the Code
The definition of operational debt postulates that it is a claim, inter alia, in respect of the provision of ‘goods’ or ‘services’ including employment etc. A perusal of the invoices issued by the ‘Operational Creditor’ in the name of Operational Debtor clearly shows that ‘Operational Creditor’ has supplied paddy to the Operational Debtor on various occasions. Therefore, the debt which is due and payable by the Operational Debtor to the Operational Creditor is prima facie covered by Section 5(21).
It is also evident that Operational Debtor has committed default and the amount of ₹ 32,55,653/- has remained unpaid. Thus, there is default committed on the part of the Operational Debtor within the meaning of Section 3(12) read with Section 4 and Section 9(1) of the Code, 2016.
As a sequel to the above discussion, this petition is admitted. In pursuance of Section 13(2) of Code, we direct that Interim Insolvency Resolution Professional shall immediately make public announcement with regard to admission of this application under Section 7 of the Code.
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2018 (3) TMI 319 - NATIONAL COMPANY LAW TRIBUNAL, CHANDIGARH
Corporate insolvency process - existence of operational debt - failure to make payment against procurement of paddy - The petitioner- operational creditor is a commission agent and a middleman who used to procure the paddy from farmers to be supplied as per the demand in the open auction. - Held that:- As already observed in this case, the respondent had been making regular payments of the interest as well as the principal to the petitioner-operational creditor about three years after the transaction was completed, but raised an issue with regard to the quality-cut only after the first demand notice under Section 8 of the Code was sent. The present cannot be considered to be a case where the dispute has been raised before the receipt of the demand notice.
It is not the case of the respondent that it has settled the accounts of the present transaction with the Pacca Arthias nor it is averred in defence that Pacca Arthias filed any proceedings against the petitioner nor even the respondent has taken any proceedings against the petitioner except making the regular payments and is coming up with such plea, which on the face of it, deserves to be out rightly rejected. Then no document to show that the debit notes were ever set to the petitioner nor any other communication was sent to the petitioner, who has paid the price of the paddy to the farmers from whom it was procured. This is what should be understood as correct interpretation of the term dispute, while separating grain from the chaff and to reject the spurious defence, which is merely a bluster.
In view of the above, the application deserves to be admitted.
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2018 (3) TMI 318 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Initiation of corporate insolvency process - Whether failure to send reply to the demand notice received by one of the directors of the Corporate Debtor is fatal? - Held that:- Petitioner’s firm has some control over the respondent through 3rd petitioner and it has come out in evidence that petitioner’s firm is a party to the MOU above referred. It is a circumstance doubting the contact of Mr. Samrat Gupta who has got intimate friendship with the 3rd petitioner. So deliberate neglect on the side of him in not sending the reply to the demand notice received by him cannot be ruled out. Whether he has taken a decision reply on the basis of any decision approved by the board of directors of the respondent company is a question cannot be answered in this case. It requires larger evidence. Ld. Counsel also produced a copy of FIR at the time of final hearing. The respondent herein this case succeeded in establishing a case of certain control over the respondent company by the petitioner through the 3rd respondent. The unholy nexus between Mr. Samrat Gupta and the 3rd petitioner is probable to believe in the above said circumstance. In the above said peculiar circumstances we find failure on the side of the respondent in not sending reply is not fatal. This point is answered accordingly.
Whether Corporate debtor succeeded in establishing existence of any dispute? - Held that:- There exist a genuine dispute prior to the filing of the application and before the date of issuance of the demand notice. It appears to us that the contentions taken by the respondent are not feeble, mala fide or hypothetical. Existence of MOU in between the parties and pendency of Arbitral proceedings seen not mentioned in the application. Existence of MOU is an important document produced on the side of the respondent. It deals with sharing of profits and loss between Corporate Debtor and Operational Creditor. How it would be shared or not is not a question to be answered in the case in hand. The terms in between the parties as per MOU may have some relevancy in regards the settlement of the claim in hand. Non-mentioning the above said fact is therefore amount to suppression of material facts. Thus we are inclined to reject this application.
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2018 (3) TMI 233 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Corporate insolvency proceedings - contesting respondents eligibility as ‘Financial Creditor’ - liability of the guarantee in the books of corporate debtor is in the name of the daughter - Held that:- The amount of ₹ 29,97,000/-, is claimed to have been paid by the contesting respondents either to Captain V. K. Adukia or Captain Rajeev Chauhan or the Punjab National Bank. There is nothing on record to suggest that the amount has been ‘disbursed’ in favour of ‘Corporate Debtor’ against ‘consideration for the time value of money’. The contesting respondents have also failed to bring on record any evidence to suggest that the money was borrowed or raised by the ‘Corporate Debtor’ under any other transactions including sale or purchase or other mode having commercial effect of borrowing.
In view of the aforesaid finding, we hold that the contesting respondents do not come within the meaning of ‘Financial Creditor’ and the application under Section 7 at their instance was not maintainable. The Adjudicating Authority has failed to notice the aforesaid provisions and without going to the question as to whether the application at the instance of the contesting respondents was maintainable or not has admitted the application.
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2018 (3) TMI 232 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Corporate Insolvency Resolution Process - secured creditors’ right to deal with the secured assets - Held that:- In the instant application, the Insolvency Resolution Process is completed and a Liquidator has been appointed and the Corporate Debtor is undergoing the liquidation process. Therefore, the question of secured creditors’ right to deal with the secured assets, cannot be questioned by the Liquidator on account of application of moratorium, for the period, which has been already expired. But the Liquidator has got every right to have verification of security interests and the account. Here, in this application, the Bank does not interfere the right of the Liquidator regarding the verification of the security interests held by the Bank.
Subject to section 52(7) of the code the secured creditor can proceed with the remedy available to have recourse with the secured assets in accordance with Law for the time being in force. That being so, no directions interfering the right of a secured creditor can be passed in a case of this nature. Since the secured creditor already initiated action under section 13 of the SARFAESI Act, this Adjudicating Authority Cannot issue direction against the Bank holding that the Liquidator can have any manner of control over the assets secured to the Bank. However, the liquidator’s right to verify the account and participation in the sale proceedings if any to be initiated by the Bank so as to see the interest of workmen dues is to be safeguarded and to see whether any surplus comes out of the sale cannot be interfered by the Bank. Upon the above said observation this application is liable to be dismissed.
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