Supreme Court IBC | Cannot Ask Successful Resolution Applicant To Pay Arrears Payable By Corporate Debtor For Grant/Restoration Of Electricity Connection: Supreme Court Case Title: Tata Power Western Odisha Distribution Limited & Anr. V Jagannath Sponge Private Limited Citation: 2023 LiveLaw (SC) 788 The Supreme Court has held that under the Insolvency and Bankruptcy...
Supreme Court
IBC | Cannot Ask Successful Resolution Applicant To Pay Arrears Payable By Corporate Debtor For Grant/Restoration Of Electricity Connection: Supreme Court
Case Title: Tata Power Western Odisha Distribution Limited & Anr. V Jagannath Sponge Private Limited
Citation: 2023 LiveLaw (SC) 788
The Supreme Court has held that under the Insolvency and Bankruptcy Code, 2016 (“IBC”), once the Resolution Plan stands approved by the National Company Law Tribunal (NCLT), the Electricity Department cannot demand payment of arrears, which were payable by the Corporate Debtor, from the Successful Resolution Applicant for restoration/grant of electricity connection.
The Bench comprising Justice Sanjiv Khanna and Justice S.V.N Bhatti, has held that the ‘clean slate principle’ would stand negated if the Successful Resolution Applicant is asked to pay the arrears payable by the Corporate Debtor for the grant of an electricity connection in her/his name.
IBC- Admitting Claims After Resolution Plan Has Been Accepted By COC Would Make CIRP An Endless Process: Supreme Court
Case Title: M/S. RPS Infrastructure Ltd V. Mukul Kumar
Citation: 2023 LiveLaw (SC) 773 | Civil Appeal No. 5590 of 2021
The Supreme Court Bench comprising bench of Justice Sanjay Kishan Kaul and Justice Sudhanshu Dhulia, has held that admitting claims after the Resolution Plan has been accepted by the Committee of Creditors (COC) under IBC, even though the Adjudicating Authority has yet to approve the plan, would make the Corporate Insolvency Resolution Process (CIRP) an endless process.
The Court was considering whether the claim pertaining to an arbitral award, in appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (Act), could be admitted after the resolution plan had been approved by the COC. “We find it difficult to unleash the hydra-headed monster of undecided claims on the resolution applicant” the Apex Court said while dismissing the plea of the claimant.
“The mere fact that the Adjudicating Authority has yet not approved the plan does not imply that the plan can go back and forth, thereby making the CIRP an endless process. This would result in the reopening of the whole issue, particularly as there may be other similar persons who may jump onto the bandwagon. As described above, in Essar Steel, [1 (2020) 8 SCC 534] the Court cautioned against allowing claims after the resolution plan has been accepted by the COC.”
NCLAT
Case Title: Engineering Mazdoor Parishad Devas Through Its General Secretary vs. Teena Saraswat Pandey
Case No.: Comp. App. (AT) (Ins.) No. 1200 of 2023
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), dismissed an application seeking consideration and settling the claim of the Engineering Mazdoor Parishad Devas workers (Appellant) by the Resolution Professional (“RP”). Further, the Appellant has also challenged the order allowing the application for the approval of the Resolution Plan.
The NCLAT held that it is the Claimant's responsibility to provide all necessary records to support their claim. The Appellate Tribunal pointed out that there were no documents submitted to substantiate the workmen's claim.
NCLT Proceeded Ex-Parte Against CD On First Hearing After Notice, NCLAT Delhi Says Sufficient Opportunity Not Given As Per Rule 37(2) Of NCLT Rules
Case title: Ami Ashutosh Majumdar v Omkara Assets Reconstruction Pvt. Ltd. & Anr.
Case No.: Company Appeal (AT) (Ins.) No. 1492 of 2022
The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has set aside an ex-parte order initiating CIRP against the Corporate Debtor. The NCLT had proceeded ex-parte against the Corporate Debtor on the first hearing held post issuance of notice and when the time period to file a Reply had not lapsed. The Bench held that the NCLT ought to have granted an opportunity to file Reply to the Corporate Debtor.
“In view of the fact that notice by registry was received and served on 04.11.2022 which fact is not disputed, Adjudicating Authority ought to have given one more opportunity to file a reply. Proceeding ex-parte and reserving order is not giving sufficient opportunity to the appellant as contemplated by Rule 37 Sub Rule 2 of the NCLT Rule, 2016.”
NCLAT Delhi: CIRP Can’t Be Modified On Project Basis On Request Of Financial Creditor When CIRP Is Against Company
Case Title: Kotak Mahindra Bank Ltd. vs. Resolution Professional of Universal Buildwell Pvt. Ltd.
Case No.: Company Appeal (AT) (Ins.) No. 1000 of 2021
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), dismissed an application seeking to confine the Corporate Insolvency Resolution Process (“CIRP”) only in respect of one project of Universal Buildwell Pvt. Ltd. (Corporate Debtor).
The NCLAT held that when the NCLT initially ordered the commencement of insolvency proceedings against the Corporate Debtor based on the application of the Financial Creditor, it could not have modified the initiation of CIRP by confining it to only one project.
NCLAT Chennai Terminates Insolvency Proceedings Against Café Coffee Day’s Parent Company, Parties Enter Settlement
Case Title: Malavika Hegde v Indusind Bank Ltd. & Anr.
Case No.: Company Appeal (AT) (CH) (Ins) No.235/2023
The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Mrs. Shreesha Merla (Technical Member), has terminated the Corporate Insolvency Resolution Process (CIRP) of M/s Coffee Day Global Ltd. which was initiated by the NCLT on 20.07.2023, as the Parties have entered settlement and the debt has been assigned.
M/s Coffee Day Global Ltd. is the parent company of the Coffee Day Group and Coffee Day Enterprises Ltd., which runs a multinational coffeeshop named ‘Café Coffee Day’.
NCLT
NCLT Hyderabad Rejects Section 9 Petition For Incompliance Of Rule 5(2) Of Insolvency And Bankruptcy (Application To Adjudicating Authority) Rules, 2016
Case Title: M/s Tata International Limited v M/s Trident Sugars Ltd
Case No.: CP (IB) No. 221/9/HDB/2022
The National Company Law Tribunal (“NCLT”), Hyderabad Bench, comprising of Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri Charan Singh (Technical Member), has rejected a petition under Section 9 of IBC since the creditor failed to serve the Demand Notice as per the procedure laid down in Rule 5(2) Of Insolvency And Bankruptcy (Application To Adjudicating Authority) Rules, 2016.
The Corporate Debtor claimed that the Demand Notice was served to the Security Guard while the office was closed during Covid-19 pandemic. The Operational Creditor failed to place on record any document to depict that service of Demand Notice was made through Speed Post with “acknowledgement due”. Further, no proof was placed on record to show that Demand Notice was served through email to the Director of Corporate Debtor.
NCLT Kolkata: Resolution Professional Deserves Remuneration For Labor And Services As Approved By CoC
Case Title: Mr. Sanjeev Jhunjhunwala vs. Mr. Bimal Kanti Choudhury
Case No.: C.P. (IB) No. 1582/KB/2019
Bidisha Banerjee (Judicial Member) and Shri Balraj Joshi (Technical Member), has allowed an application seeking payment of Corporate Insolvency Resolution Process (“CIRP”) costs and pass an Order appointing another person as the Resolution Professional (“RP”) for the Corporate Debtor. The Tribunal held that an Insolvency Professional engaged as an RP deserves remuneration for their labor and services as approved by the CoC and once the fees have been approved it cannot be reduced without the consent of the Resolution Professional.
Post Occurrence Of Default, Parties Entered Into MoU And Re-Scheduled Payments: NCLT Hyderabad Declines To Initiate CIRP
Case Title: M/s Tata International Limited v M/s Trident Sugars Ltd
Case No.: CP (IB) No. 221/9/HDB/2022
The National Company Law Tribunal (“NCLT”), Hyderabad Bench, comprising of Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri Charan Singh (Technical Member), has rejected a petition filed under Section 9 of IBC based upon a default post which the Parties entered into a Memorandum of Understanding (MoU) and re-scheduled the payments. The Bench observed that the Section 9 petition did not disclose any default which occurred post execution of the MoU. Hence, no CIRP can be initiated upon a default which has ceased to exist in view of subsequent payment re-scheduling by the Parties.
NCLT Mumbai: No Claims To Be Taken After Approval Of Resolution Plan By CoC, Citing Disruption Of Time-Bound Resolution Process
Case Title: Suraksha Realty Limited vs. Mr. Anuj Bajpai
Case No.: C.P.(IB)2808/2018
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising of Mr. Kuldip Kumar Kareer (Judicial Member) and Mr. Anil Raj Chellan (Technical Member), has dismissed an application for consideration of belated claim of Rs. 19.93 crores as a financial debt. The claim was based on a loan agreement and a share pledge agreement.
The Tribunal held that no claims can be entertained after the approval of the Resolution Plan by the Committee of Creditors (CoC) as allowing such claims at a later stage could disrupt the entire time-bound resolution process.
No Provision In IBC For Re-Opening Of CIRP, A Petition Can Only Be Restored For Fresh Admission In Case Settlement Fails: NCLT Mumbai
Case Title: Amluckie Investment Company Limited v Skill Infrastructure Limited
Case No.: CP (IB) No.834/MB-IV/2020
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising of Shri Kishore Vemulapalli (Judicial Member) and Shri Prabhat Kumar (Technical Member), has held that the IBC does not contain any provision for restoration of CIRP which has once been closed by the Tribunal. In case liberty is given to restore the company petition in case the settlement between parties fail, then that would mean restoration of the petition for fresh admission and not restoration of the CIRP.
“This bench feels that if the words “to reopen the Corporate Insolvency Resolution Proceedings in accordance with Law” are interpreted to imply resumption of CIRP automatically on default, the Hon’ble NCLAT would have rather stayed the CIRP process for the period during which settlement amount was to be paid than to order the closure of CIRP. Further, the words “in accordance with the law” clearly suggest that the reopening of the proceedings has to be in accordance with the provisions of the code and not otherwise.”
NCLT Hyderabad: NCLT Cannot Exercise Inherent Powers To Condone Delay Under Section 42 Of IBC When There Is A Clear Statutory Bar
Case Title: IFCI Limited. vs. BS Limited.
Case No.: CP(IB) No.278/7/HDB/2018
The National Company Law Tribunal (“NCLT”), Hyderabad comprising of Justice Telaprolu Rajani (Judicial Member) and Sri Charan Singh (Technical Member), has dismissed an application seeking condonation of the delay of 184 days in approaching the NCLT for filing an appeal under Section 42 of IBC against the rejection of the claim order by the Liquidator of Corporate Debtor. The Tribunal held that it cannot exercise its inherent powers to condone delay when there is a clear statutory bar in entertaining an appeal filed beyond the period prescribed under IBC.
NCLT Indore: Regional Provident Fund Commissioner Prohibited From Taking Actions During Moratorium Under Section 14 Of IBC
Case Title: Shirani Automotive Pvt Ltd
Case No.: CP(IB)/22(MP)2021
The National Company Law Tribunal (NCLT), Indore comprising of Mr. P. Mohan Raj (Judicial Member) and Mr. Kaushalendra Kumar Singh (Technical Member) adjudicating a petition filed by the Liquidator of Shirani Automotive Pvt Ltd (Corporate Debtor) issued notice to the Regional Provident Fund Commissioner. It observed that during the Moratorium period under Section 14 of the Insolvency and Bankruptcy Code 2016, the Regional Provident Fund Commissioner is prohibited from taking any enforcement actions against the Liquidator.
NCLT Mumbai Admits Bagalkot Cement And Industries Ltd. Into Insolvency
Case Title: Vyshali Energy Private Limited v M/s. Bagalkot Cement and Industries Ltd.
Case No.: C.P.(IB)-724(MB)/2022
The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Mrs. Lakshmi Gurung (Judicial Member) and Shri Charanjeet Singh Gulati (Technical Member), has initiated Corporate Insolvency Resolution Process (“CIRP”) against M/s. Bagalkot Cement and Industries Ltd., a Kanoria Group company. Mr. Atul Gala has been appointed as the Interim Resolution Professional (“IRP”).
M/s. Bagalkot Cement and Industries Ltd. (“Corporate Debtor”) belongs to the Kanoria Group and is engaged in the business of cement production. The Corporate Debtor had acquired the cement division of Bagalkot Udyog Ltd., after the latter was declared sick company.
MCA
MCA Refuses To Disclose In RTI The List Of Candidates Recommended By Selection Committee For Post Of NCLT Members
The Ministry of Corporate Affairs, Government of India, has declined to disclose under the ‘Right to Information Act, 2005’ the list of candidates recommended by Selection Committee, headed by Chief Justice of India, for the post of Judicial Member and Technical Member in the National Company Law Tribunal (“NCLT”), as against vacancy circular dated 12.07.2022. The reason given for non-disclosure is that such list is a part of proposal being sent to the Cabinet Committee, thus exempted from disclosure under Section 8(1)(i) of the RTI Act, 2005.