Supreme Court “Inappropriate, Almost Bordering On Contempt”: SC Deprecates NCLAT Order Impeding Implementation Of SC Order Case Title: Indiabulls Housing Finance Ltd. v Iirf India Realty Xii Ltd. & Ors. Case No.: CIVIL APPEAL NO.9062/2022 The Supreme Court Bench comprising of Justice Sanjay Kishan Kaul and Justice Abhay S. Oka while adjudicating an appeal has set...
Supreme Court
Case Title: Indiabulls Housing Finance Ltd. v Iirf India Realty Xii Ltd. & Ors.
Case No.: CIVIL APPEAL NO.9062/2022
The Supreme Court Bench comprising of Justice Sanjay Kishan Kaul and Justice Abhay S. Oka while adjudicating an appeal has set aside a status quo order passed by NCLAT Delhi which impeded the implementation of an order passed by the Supreme Court. The Bench has deprecated the NCLAT order while observing that the same is inappropriate and almost bordering on contempt.
“We fail to appreciate how a status quo order could have been passed by a Bench of the NCLAT seeking to impede the implementation of the order of this Court. If there was a grievance about the implementation of the order of the Court, only this Court could have got into it. We consider the conduct of the Bench not only inappropriate but almost bordering on contempt. We strongly deprecate the order passed by the NCLAT Bench. We thus, set aside the order of status quo in those proceedings and insofar as that appeal i.e. Company Appeal (AT) (INS.) No.1472/2020, is concerned, the same be placed before a Bench presided over by the Chairman.”
Borrowers Enter OTS ; Supreme Court Directs Bank To Re-Consider Decision Of Wilful Default
Case Title: Orbitz Irrigation Pvt. Ltd. & Ors. v Bank Of Baroda & Anr.
Case No.: Special Leave to Appeal (C) No.15751/2022
The Supreme Court Bench comprising of Justice Surya Kant and Justice J.B. Pardiwala, has directed the Bank to re-consider its decision of declaring the Borrowers (Petitioners) as wilful defaulters in light of changed circumstances, as the Bank had subsequently entered into One Time Settlement (OTS) with the Borrowers. The Borrowers have been making payments towards the OTS. The Bench has also granted liberty to the Borrowers to avail legal remedy if the Bank’s decision on their representation is not favourable to them.
Case Title: Shekhar Resorts Limited vs Union of India
Case No.: 2023 LiveLaw (SC) 15, CA 8957 OF 2022
The Supreme Court Bench comprising of Justices M R Shah and Justice B V Nagarathna has remarked that “No one can be expected to do the impossible” while granting relief to a company which could not avail the benefit of settlement of tax dues under “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, due to moratorium under IBC being imposed on it. "The appellant cannot be punished for not doing something which was impossible for it to do. There was a legal impediment in the way of the appellant to make any payment during the moratorium. Even if the appellant wanted to deposit settlement amount within the stipulated period, it could not do so in view of the bar under the IBC as, during the moratorium, no payment could have been made. In that view of the matter, the appellant cannot be rendered remediless and should not be made to suffer due to a legal impediment which was the reason for it and/or not doing the act within the prescribed time." Allowing the appeal, the court directed that the payment of Rs.1,24,28,500/- already deposited by the appellant be appropriated towards settlement dues under “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019” and the appellant be issued discharge certificate.
IBC - Delay In Filing CIRP Application Condonable On Sufficient Reasons: Supreme Court
Case Title: Sabarmati Gas Limited v Shah Alloys Limited
Case No.: 2023 LiveLaw (SC) 9, CA 1669 of 2020
The Supreme Court Bench comprising of Justices Ajay Rastogi and Justice C T Ravikumar has held that delay in initiating Corporate Insolvency Resolution Process (CIRP) is condonable on sufficient grounds. "When the limitation period for initiating CIRP under Section 9, IBC is to be reckoned from the date of default, as opposed to the date of commencement of IBC and the period prescribed therefor, is three years as provided by Section 137 of the Limitation Act, 1963 and the same would commence from the date of default and is extendable only by application of Section 5 of the Limitation Act, 1963 it is incumbent on the Adjudicating Authority to consider the claim for condonation of the delay when once the proceeding concerned is found filed beyond the period of limitation..As relates Section 5 of the Limitation Act showing ‘sufficient cause’ is the only criterion for condoning delay. ‘Sufficient Cause’ is the cause for which a party could not be blamed.
NCLAT
AA Empowered To Direct Tenant To Vacate Premises Of Corporate Debtor: NCLAT Delhi
Case Title: M/s. Jhanvi Rajpal Automotive Pvt. Ltd. v R.P. of Rajpal Abhikaran Pvt. Ltd. & Anr.
Case No.: Company Appeal (AT) (Insolvency) No. 1417 of 2022
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Dr Alok Srivastava (Technical Member) and Mr. Barun Mitra (Technical Member), has held that the Adjudicating Authority is empowered under Section 60(5) of IBC to direct a tenant to vacate the property of Corporate Debtor. The NCLAT Bench has upheld the decision of Adjudicating Authority directing the Tenant to vacate the Corporate Debtor’s property, which impeded implementation of the approved Resolution Plan.
NCLAT Delhi Upholds Dismissal Of Wave Megacity’s Section 10 Application By AA
Case Title: Wave Megacity Centre Private Limited v Rakesh Taneja & Ors
Case No.: Company Appeal (AT) (Insolvency) No. 918 of 2022
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), had upheld the dismissal of Section 10 of IBC application on behalf of Wave Megacity Centre by the Adjudicating Authority. The Bench observed that the Adjudicating Authority is not obliged to admit application under Section 10 of IBC if the same has been filed fraudulently upon malicious intent.
When COC Approves A Resolution Plan, It Is Presumed To Be Viable And Feasible: NCLAT Delhi
Case Title: Rajesh Kumar & Ors. v Rabindra Kumar Mintri & Anr.
Case No.: Company Appeal (AT) (Insolvency) No.1489 of 2022
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Kanthi Narahari (Judicial Member) and Shri Barun Mitra (Technical Member), has held that when the Committee of Creditors (CoC) approves a Resolution Plan in its commercial wisdom, it is presumed that the Resolution Plan is viable and feasible. The Bench further observed that it is incumbent upon the Authorized Representative of the homebuyers to obtain instructions to vote for any agenda item where CoC obtain votes. Where there is no voting of the CoC in an agenda item, the Authorized Representative’s opinion can be taken note of and considered in the CoC meeting.
F.No. 23/4/2022-Estt./NCLAT
The National Company Law Appellate Tribunal (“NCLAT”) vide an Order dated 24.12.2022 has issued fresh directions for computation of limitation for filing of appeals before NCLAT. The period of limitation shall be computed from the date of e-filing and hard copy has to be filed within 7 days of e-filing. However, the Competent Authority is at liberty to extend the period of filing hard copy in case of any unforeseen exigency. If hard copy is filed after 7 days, the appeal will be placed before the Tribunal for appropriate order. Further, the requirement of filing Appeals by electronic mode shall continue along with mandatory filing of the Appeals as per Rule 22 of the NCLAT Rules, 2016.
The directions are effective from 24.12.2022 onwards. NCLAT has also recalled its previous circular dated 21.10.2022 bearing F.No.10/37/2018-NCLAT regarding computation of limitation.
Google V Competition Commission: NCLAT Directs Google To Deposit 10% Of Penalty As Interim Measure
Case Title: Google LLC & Anr. v Competition Commission of India
Case No.: Competition Appeal (AT) (ND) No.01 of 2023
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Rakesh Kumar (Judicial Member) and Dr. Alok Srivastava (Technical Member), has admitted Google’s appeal against CCI order dated 20.10.2022, subject to deposit of 10% of penalty amount of Rs. 1337.76 Crores. The Bench has declined to grant any interim relief. The appeal has been filed by Google against the order of Competition Commission of India (CCI), wherein it was concluded that Google perpetuated its dominant position in the online search market, resulting in denial of market access for competing search apps. Further, Google abused its dominant position in the Android OS app store market, to protect its position in online general search. The appeal before NCLAT is next listed on 03.04.2023 for final hearing.
Re-Constituted Bench Cannot Pass An Order Without Re-Hearing The Parties: NCLAT Delhi
Case Title: Rajesh Narang v Durha Vitrak Pvt. Ltd.
Case No.: COMPANY APPEAL (AT)(INS) NO.612/2021
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Rakesh Kumar (Judicial Member) and Dr. Ashok Kumar Mishra (Technical Member), has held that after re-constitution of Bench no order should be passed without re-hearing the matter. It was further observed that when the first order was passed on 20.05.2021, one of the Technical Member was not a party at the time of hearing and reserving orders. For this reason alone, the order dated 20.05.2021 was declared void and fresh hearing was conducted on 31.05.2021. The Bench observed that the order dated 20.05.2021 was reproduced in order dated 31.05.2021, without further hearing or rehearing. The Bench set aside the Order of liquidation dated 31.05.2021 and remitted the matter back to Adjudicating Authority to re-examine and consider changing the Resolution Professional.
Case Title: Hero Fincorp Limited v M/s Hema Automotive Private Limited
Case No.: Company Appeal (AT) (Insolvency) No.1540 of 2022
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Ms. Shreesha Merla (Technical Member), held that the Adjudicating Authority’s obligation to direct for liquidation shall arise only when the CoC’s decision to liquidate is in accordance with IBC. The CoC resolved to liquidate the Corporate Debtor after preparation of the Information Memorandum and before the period for inviting Expression of Interest could expire. The NCLAT Bench upheld the Adjudicating Authority’s decision to reject the liquidation application.
NCLAT Delhi Upholds Removal Of Shree Ram Urban Infrastructure’s Resolution Professional By AA
Case Title: Srigopal Choudary v SREI Equipment Finance Ltd.
Case No.: Company Appeal (AT) (Ins) No. 1443 of 2022
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Rakesh Kumar (Judicial Member) and Ms. Shreesha Merla (Technical Member), has upheld the Adjudicating Authority’s decision to remove the Resolution Professional of Shree Ram Urban Infrastructure Ltd. The Bench has held that an authority empowered to appoint also has the right to remove/dismiss. Further, if the Resolution Professional is not convening the meeting of CoC for his replacement, then Adjudicating Authority can invoke its inherent jurisdiction and replace the Resolution Professional.
Google Play Store Dispute: NCLAT Delhi Directs Google To Deposit 10% Of Penalty Amount
Case Title: Alphabet Inc. & Ors. v Competition Commission of India & Ors.
Case No.: Competition App. (AT) No. 4 of 2023
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Rakesh Kumar (Judicial Member) and Dr. Alok Srivastava (Technical Member), has admitted Google’s appeal against CCI order dated 25.10.2022 subject to deposit of 10% of penalty amount of Rs. 936.44 Crores. The Bench has declined to grant any interim relief. The matter is next listed on 17.04.2023.
On 25.10.2022, the CCI Bench by invoking its powers under Section 27 of the Competition Act, had imposed monetary penalty of Rs. 936.44 Crore on Google for abusing its dominant position with respect to its Play Store policies, apart from issuing a cease-and-desist order. The Commission had also directed Google to modify its conduct within a defined timeline. In January 2023, Google filed an appeal before the NCLAT, challenging the Order passed by CCI imposing a penalty of Rs. 936.44 Crore on Google.
“No Concept Of Automatic Restoration Of Any Water Connection”: NCLAT Delhi
Case Title: Maharashtra Industrial Development Corporation v Bhadrashree Steel & Power Ltd. & Ors.
Case No.: Company Appeal (AT) (Insolvency) No. 1497 of 2022
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that water connection cannot be automatically restored to a Successful Resolution Applicant. A proper application has to be made seeking restoration of water connection.
“We only observe that there is no concept of automatic restoration of any water connection and a proper application is required to be made following the procedure and only benefit Successful Resolution Applicant can claim is extinguishment of the dues which are not part of the Resolution Plan.”
NCLAT Delhi Upholds Dismissal Of Application Seeking Restraint On Oyo From Proceeding With IPO
Case Title: Jagadish v Oyo Hotels & Homes Pvt. Ltd.
Case No.: Company Appeal (AT) (Insolvency) No. 1408 of 2022
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has upheld the Adjudicating Authority’s order rejecting applications filed by Operational Creditor to direct Oyo not to proceed with its IPO and furnish its financial statements. The reliefs sought by the Operational Creditor have been regarded as premature, since CIRP has not yet been initiated against Oyo. Oyo Hotels & Homes Pvt. Ltd. (“Corporate Debtor”) owns and operates a chain of hotels across India under the banner ‘OYO’. Recently, the Corporate Debtor announced Initial Public Offering (IPO) of its shares and the IPO is still under process.
Case Title: Permali Wallace Pvt. Ltd. v Narbada Forest Industries Pvt. Ltd.
Case No.: Company Appeal (AT) (Insolvency) No. 36 of 2023
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held upheld the Adjudicating Authority’s dismissal of a Section 9 petition, which was filed merely for recovery of balance interest amount in view of a settlement agreement and not for resolution of the Corporate Debtor. The Bench placed reliance on the Supreme Court judgment in Swiss Ribbon Pvt. Ltd. v Union of India, (2019) 4 SCC 17, wherein it was held that IBC is not a recovery proceeding.
Section 17 Of Limitation Act Inapplicable Where Limitation Is Prescribed For Appeal: NCLAT Delhi
Case Title: Maharashtra State Electricity Distribution Company Ltd. v NRC Ltd. & Anr.
Case No.: Company Appeal (AT) (Insolvency) No. 13 of 2023.
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that Section 17(1) of Limitation Act, 1963 deals with period of limitation in the case of any suit or application. On the face of it, Section 17(1)(c) does not come into play in an Appeal when limitation is prescribed for an Appeal.
Landowner In A Development Agreement Not A Financial Creditor: NCLAT Delhi
Case Title: Ashoka Hi-Tech Builders Pvt. Ltd. v Sanjay Kundra & Anr.
Case No.: Company Appeal (AT) (Insolvency) No. 46 of 2023
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that a landowner in a development agreement is not a financial creditor within the meaning of Section 5(8) of IBC and cannot be included in the Committee of Creditors. The Bench observed that the Development Agreement clearly states that the Landowner was a collaborator in the development agreement and not a financial creditor. There was no disbursement for time value of money by the Landowner within meaning of Section 5(8) of the IBC.
Operational Creditors Only Entitled To Minimum Of The Liquidation Value: NCLAT Delhi
Case Title: Dharmindra Constructions Pvt. Ltd. & Anr. v Rajendra Kumar Jain
Case No.: Company Appeal (AT) (Insolvency) No.1477 of 2022
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that Operational Creditors are only entitled for minimum of the liquidation value.
The Bench observed that the Liquidation value of the Appellant/Operational Creditor was Nil. Even the Operational Creditors which are Government and whose verified claim is Rs. 295.18 Crores, were paid NIL. The requirement for the obligation for payment of amount to the Operational Creditor is under Section 30(2)(b) and the plan had not violated the said provision.
No Condonation Beyond 45 Days, IBC Overrides Limitation Act : NCLAT Chennai
Case Title: M/s. Platinum Rent A Car (India) Pvt. Ltd. v M/s. Quest Offices Limited
Case No.: Comp App (AT) (CH) (Ins) No.448/2022
The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that Section 238 of IBC overrides Section 12 of the Limitation Act, 1963. The Bench declined to condone a delay of 55 days in filing of appeal, which was caused due to time taken to obtain certified copy of order. The Bench further held that Rules of Procedure neither create any right in favour of a person, nor create a Cause of Action. If a Statute requires a certain remedy to be exercised in a particular manner and time, then the same cannot be exercised in any other manner except for the one specified.
After Adoption Of Swiss Challenge Method, RA Not Allowed To Submit Revised Plan: NCLAT Delhi
Case Title: Jindal Stainless Ltd. v Mr. Shailendra Ajmera
Case No.: Comp. App. (AT) (Ins.) No. 1058 of 2022
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that after adoption of Swiss Challenge Method to find out the best plan, one Resolution Applicant cannot be allowed to submit a revised plan. The Bench placed reliance on the Supreme Court judgment in Ngaitlang Dhar vs. Panna Pragati Infrastructure Private Limited & Ors., Civil Appeal Nos. 3665-3666 of 2020, and held that after adoption of Swiss Challenge Method to find out the best plan, one Resolution Applicant cannot be allowed to submit a revised plan.
The Bench observed that the decision of CoC to vote on the Resolution Plan after completion of Challenge Process and not to further accept any modification of the plan, should not be interfered with. The Application was filed by Shyam Sel and Power Ltd. on 07.08.2022, when CoC had already resolved the vote on all the plans and voting had also commenced w.e.f. 07.08.2022.
Withdrawal Application U/S 12a Can’t Be Entertained After Approval Of Resolution Plan By COC: NCLAT Delhi
Case Title: Hem Singh Bharana v M/s Pawan Doot Estate Pvt. Ltd. & Ors.
Case No.: Company Appeal (AT) (Insolvency) No.1481 of 2022.
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that once the Committee of Creditors approve a resolution plan, no withdrawal application under Section 12A of IBC can be entertained. Approval of a Resolution Plan by the CoC prohibits the Resolution Applicant to modify or withdraw from the Plan, the same embargo is placed on CoC from changing its stand. It was observed that the Supreme Court in Ebix Singapore laid down that after approval by the CoC of a Resolution Plan, CoC itself is bound by its decision and cannot be allowed to go back from its decision and pass any other resolution.
NCLAT Rejects Reliance Capital’s Creditor Plea To Vacate Status Quo Order
Case Title: Vistra ITCL v. Torrent Investments
Case No.: CA(AT)(Ins) 87/2023
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), disposed off the appeal filed by the Reliance Capital Creditor namely Vistra ITCL against the NCLT Mumbai order dated 23.01.2023. Torrent Investment which emerged as the successful bidder for Reliance Capital with a bid of Rs. 8640 Crores, filed an application before NCLT Mumbai challenging the fresh revised bid of Rs. 9400 Crores submitted by Hinduja Group and the NCLT Mumbai vide its order dated 03.01.2023 directed to maintain status quo.
Subsequently, the COC of Reliance Capital decided to hold another round of auction which was challenged by Torrent Investment before NCLT Mumbai. NCLT Mumbai heard the parties reserved the order on 23.01.2023 and directed the parties to maintain the status quo regarding the CIRP of Reliance Capital until the order is pronounced in the week commencing 30th January. Vistra ITCL contended that NCLT cannot interfere with the COC commercial wisdom to approve an extended round of challenge for the Prospective Resolution Applicants of Reliance Capital. The NCLAT Bench was not inclined to pass any interim order and thereafter Vistra ITCL sought permission to withdraw the appeal and accordingly, the appeal was dismissed as withdrawn.
Benefit U/S 10A Of IBC Can Only Be Claimed When Default Occurs During Prohibited Period: NCLAT Delhi
Case Title: Vishal Agarwal v ICICI Prudential Real Estate AIF-I & Anr.
Case No.: Company Appeal (AT) (Insolvency) No. 1016 of 2022.
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that benefit under Section 10A of IBC can only be claimed when there is clear default during the prohibited period. The Bench upheld admission of a Section 7 petition wherein default had occurred prior to 25.03.2020.
NCLT
Case Title: Dhanalaxmi Bank Ltd. v Dr. Bharath Chandran
Case No.: CP (IBC)/24/KOB/2022
The National Company Law Tribunal (“NCLT”), Kochi Bench, comprising of Shri. P. Mohan Raj (Judicial Member) and Shri. Satya Ranjan Prasad (Technical Member), has initiated Insolvency Resolution Process against Dr. Bharath Chandran, the personal guarantor and Promoter of M/s. Trivandrum International Health Services Ltd. The NCLT Bench observed that the Guarantor admitted the Deed of Guarantee, agreed to the terms therein unconditionally and also gave consent to the Creditor and the Borrower to vary the terms of the contract and securities.
Case Title: Minda TG Rubber Pvt. Ltd. v Toyoda Gosei Minda India Pvt. Ltd
Case No.: Company Petition (CAA) No. 111 (ND)/2021
The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Bachu Venkat Balaram Das (Judicial Member) and Shri L.N. Gupta (Technical Member), has rejected the Scheme of Amalgamation proposed by Minda TG Rubber Pvt. Ltd. for being non compliant of Section 72A(2) of the Income Tax Act, 1961. The Bench observed that the Scheme of Amalgamation was not compliant of Section 72A(2), as there was no undertaking that the Transferee Company shall not dispose of all the assets; shall hold at least three-fourths of the book value of fixed assets of the Transferor Company for at least 5 years; and it shall continue business of the Transferor Company for the next five years. The Bench declined to allow the carry forward and set off of loss and unabsorbed depreciation of Transferor Company in the Transferee Company, which is a condition stipulated in the Scheme.
NCLT Delhi Dismisses Insolvency Plea Against Hindustan Times; “Not A Dispute Redressal Forum”
Case Title: M/s JHS Svendgaard Ltd. v M/s HT Media Ltd.
Case No.: (IB) 400 ND/2022
The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Bachu Venkat Balaram Das (Judicial Member) and Shri L.N. Gupta (Technical Member), has declined to initiate Corporate Insolvency Resolution Process (CIRP) against Hindustan Times (HT Media Ltd.). The Bench further held that NCLT is not a dispute redressal forum. HT Media Ltd. (“Corporate Debtor”) is a mass media company engaged in the business of print, electronic and digital media. HT media’s flagship newspaper is Hindustan Times.
NCLT Mumbai Approves Adani Goodhome’s Resolution Plan For Radius Estates & Developers
Case Title: Beacon Trusteeship Ltd. v Radius Estates and Developers Pvt. Ltd.
Case No.: CP (IB) No: 1390 of 2020
The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Smt. Anuradha Sanjay Bhatia (Technical Member), has approved the Resolution Plan submitted by M/s. Adani Goodhomes Pvt. Ltd. for Radius Estates and Developers Pvt. Ltd. Radius Estates and Developers Pvt. Ltd. (“Corporate Debtor”) entered into a joint venture as co-developer with the MIG (Bandra) Realtors and Builders Pvt. Ltd., for redevelopment of a land situated at Bandra (East) Mumbai (“Project”). The Project included construction of residential flats/units for: (i) rehabilitation of the members of the Middle-Income Group Co-operative Housing Society; and (ii) as part of the free-sale component.
NCLT Delhi Admits Unibera Developers Into Insolvency
Case Title: Mahi Buildhome Pvt. Ltd. v M/s. Unibera Developers Pvt. Ltd.
Case No.: (IB)-505(ND)2022
The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Ashok Kumar Bhardwaj (Judicial Member) and Shri L. N. Gupta (Technical Member), has initiated Corporate Insolvency Resolution Process against Unibera Developers Pvt. Ltd. Mr. Ashok Kumar Jalan has been appointed as the Interim Resolution Professional (IRP). Unibera Developers Pvt. Ltd. (“Corporate Debtor”) is engaged in the development of residential, commercial and government real estate projects. The Corporate Debtor’s projects are located in NOIDA, Greater NOIDA, Ghaziabad and Bihar.
NCLT Mumbai Approves Promoter’s Resolution Plan For Srithik Ispat Pvt. Ltd.
Case Title: Swastik Coal Corporation Pvt. Ltd. v Srithik Ispat Pvt. Ltd
Case No.: CP (IB) No.4549/MB-IV/2018
The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Shri Kishore Vemulapalli (Judicial Member) and Shri Manoj Kumar Dubey (Technical Member), has approved the resolution plan submitted by the Promoter of the Corporate Debtor (Srithik Ispat Pvt. Ltd.). The Corporate Debtor is engaged in the business of iron sponge manufacturing in Goa.
NCLT Hyderabad Grants A Series Of Concessions/Waivers To The Successful Bidder
Case Title: State Bank of India v K.R.R Infraprojects Pvt. Ltd.
Case No.: CP (IB) No.430/7/HDB/2020
The National Company Law Tribunal (“NCLT”), Hyderabad Bench, comprising of Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri Sri Satya Ranjan Prasad (Technical Member), has granted several waivers/concessions to the Successful Bidder including waiver from penalties imposed by Registrar of Companies and other authorities. Further, the Bench has granted the Successful Bidder the liberty to approach the concerned authority for seeking offset of any loses as per Income Tax Act against future profits; and clearance from the secured financial creditors and filing of satisfaction of charge by them. The new management shall also not be liable for any payment arising out of the contingent liabilities on account of bank guarantees.
NCLT Prescribes Dress Code For Members, Lawyers, RP, Authorized Representative & Parties In Person
File No.: 25/02/2023-NCLT
The National Company Law Tribunal (“NCLT”) has issued an order dated 27.01.2023 specifying the following dress code:
· President and Members: Long trousers (White/Black, Black striped or Grey), National Dress with a shirt and collar band alongwith a black coat/buttoned up black coat. The Female President or Member are directed to wear a sober coloured saree, national dress and collar band with a black coat/buttoned up black coat.
- Legal Practioners: the dress code prescribed under the Bar Council of India Rules under Section 49(1)(gg) of the Advocates Act, 1961.
- Authroized Representative (Chartered Accountant, Company Secretary, Cost Accountant): professional dress, if any prescribed under their respective code of conduct. In case no dress code is prescribed, a male member shall wear sober coloured dress/national dress with a buttoned up coat, or a coat with tie. A female member shall wear a sober coloured saree or formal national dress. A suit or buttoned up coat is optional.
- Resolution Professional/Interim Resolution Professional: A male member shall wear sober coloured dress/national dress, a suit or buttoned up coat and tie. A female member shall wear a sober coloured saree or formal national dress. A suit or buttoned up coat is optional.
- Parties in person: national dress in a sober colour.
HIGH COURT
No Ipso Facto Absolvement Of Guarantor’s Liability Upon Approval Of Resolution Plan: Allahabad High Court
Case Title: Narendra Singh Panwar v Pashchimanchal Vidyut Vitran Nigam Limited & Ors.
Case No.: WRIT - C No. - 26355 of 2022
The High Court of Allahabad Bench comprising of Justice Sunita Agarwal and Justice Vipin Chandra Dixit, has held that approval of a resolution plan under Section 31 of the IBC, does not ipso facto absolve the surety/guarantor of the Corporate Debtor of his or her liability, which arises out of an independent contract of guarantee. To what extent, the liability of a guarantor can be pressed into service would depend on the terms of the guarantee/contract itself.
Avoidance Applications Survive CIRP, Can Be Heard After Approval Of Resolution Plan: Delhi High Court
Case Title: Tata Steel BSL Limited v Venus Recruiter Pvt. Ltd. & Ors.
Case No.: LPA 37/2021, Neutral Citation Number: 2023/DHC/000257.
The Delhi High Court Bench comprising of the Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad, has held that that avoidance applications filed under IBC survive even after approval of the resolution plan, in cases where Resolution Plans are unable to account for such applications. These applications can be heard even after CIRP stands concluded. The Bench observed, “…it cannot be accepted that avoidance applications will be rendered infructuous in situations wherein the resolution plan could not have accounted for avoidance applications due to exigencies that delayed initiation of action in respect of avoidable transactions beyond the submission of a resolution plan before the adjudicating authority. This is because such an interpretation will render the provisions pertaining to suspect transactions otiose and let the beneficiaries of such transactions walk away, scot-free……”.
MINISTRY OF CORPORATE AFFAIRS
Ministry Of Corporate Affairs Invites Public Comments On Proposed Changes In IBC
File No.- 30/38/2021-Insolvency
The Ministry of Corporate Affairs, Government of India, has issued a circular inviting comments from the public on the changes proposed to be made in the Insolvency and Bankruptcy Code, 2016 (“IBC”). The proposed changes relate to the admission of corporate insolvency resolution process (“CIRP”) applications, streamlining the insolvency resolution process, recasting the liquidation process, and the role of service providers under the IBC. The proposed amendments are:
- Mandatory to admit Section 7 application where occurrence of a default is established.
- Approval of multiple resolution plans in respect of the same CD.
- Improving recoveries for operational creditors in liquidation: unsecured creditors (Financial Creditors, Operational Creditors and any government or authority) other than the workmen and employees shall be treated equally for distribution under Section 53 of IBC.
- Improving outcomes in real estate cases: during a CIRP or a project specific resolution process, the allottees may request ownership and possession of a completed unit of the real estate project, which cannot be permitted during the moratorium under the IBC. To benefit such allottees, Section 28 of IBC may be amended to enable the Resolution Professional to transfer the ownership and possession of a plot, apartment or building to the allottees with the consent of the CoC.
- Reinstating CIRP: IBC to enable reinstatement of the CIRP during the liquidation process, where the liquidator continues to carry on the CD’s business, and it is possible to revive the CD as determined by the CoC.
- Intermingling the assets of the CD and its guarantors: in certain cases while a building, plant, or machinery may belong to the CD, the land on which it is situated may belong to a guarantor. It is proposed to include such assets of the guarantor in the general pool of assets available for the CIRP for efficient resolution of the CD.
- Protection of a resolution applicant post implementation of the resolution plan concerning civil liabilities.
- Direct Dissolution of the CD: CoC can request the AA to dissolve the CD if it believes that conducting the liquidation process in such circumstances may not be feasible or beneficial for the stakeholders.
- Replacement of the liquidator: CoC to seek replacement of the RP conducting the CIRP from becoming the liquidator by a vote of at least sixty-six per cent of voting shares.
- Use of technology.
- Increasing reliance on the record submitted with the Information Utilities during the Admission Process.
- Restricting the right of the promoters to propose an Interim Resolution Professional.
- Empowering the AA to impose penalties for violations of IBC.
- Expanding the applicability of the Pre-packaged Insolvency Resolution framework.