IBC Weekly Round Up [2nd December To 8th December, 2024]

Harsh Mehta Versus Securities and Exchange Board of India and Ors., WRIT PETITION NO. 4844 OF 2024

Prabhat Jain, Liquidator of Narmada Cereal Pvt. Ltd. vs MP Industrial Development Corporation Limited and Ors.,Comp. App. (AT) (Ins.) No. 697 of 2023 & I.A. No. 2322 of 2023

Decor Paper Mills Ltd. Versus Mahashakti Plasto Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 2022 of 2024 & I.A. No. 7591 of 2024

Central Transmission Utility of India Ltd. Versus Mr. Summit Binani and Anr., TA (AT) NO. 174/2021 (Company Appeal (AT) (Ins.) No. 1011/2020)

Fintech Restructuring LLP M/s Fairdeal Multifilament Private Limited and Ors., Company Appeal (AT) (Insolvency) No. 1823 of 2024

Bikram Bhadur Vs. Union Bank of India & Anr., Company Appeal (AT) (Insolvency) No. 1289 of 2024

Yogeshkumar Jashwantilal Thakkar and Anr. Versus George Samuel, Resolution Professional of Jason Dekor Private Limited and Anr., Company Appeal (AT) (Insolvency) No. 1417 of 2024

Commercial Tax Department Versus Mr. Mangesh Vitthal Kekre and Anr.,Company Appeal (AT) (Insolvency) No. 232 of 2024 & I.A. No. 737, 783 of 2024

Mr. Gajjala Yoganand versus Mr. Birendra Kumar Agarwal and Ors., IA No.373 of 2024 in CP(IB) No.296/7/HDB/2022

M/s Avani Towers Private Limited vs. M/s Energy Properties Private Limited, IA(IBC) No. 1299/ (KB)/ 2024 in Company Petition No. (IB)-1711/(KB)/2019

Jammu and Kashmir Bank Limited Vs. Mr. Kanumuru Raghu Rama Krishna Raju, CP (IB) No.54/95/HDB/2022

Embassy Commercial Projects (Whitefield) Private Limited Versus Pankaj Srivastava, I.A No. 545/2024 In CP (IB) No.74/BB/2023

Mr. Rajkumar Jhawar and Anr. Vs Mr. Arun Kapoor and Ors., IA No. 3390/2024 In CP (IB) 2517/MB/2018

High Court

Delisting Regulations Of SEBI Not Applicable To Delisting Of Equity Shares Under Resolution Plan: Bombay High Court

Case Title: Harsh Mehta Versus Securities and Exchange Board of India and Ors.

Case Number: WRIT PETITION NO. 4844 OF 2024

The Bombay High Court bench of Justices M.S.Sonak and Jitendra Jain has held that Delisting Regulations framed by the SEBI would not be applicable to the delisting of shares of the company in pursuance of the approval of a Resolution Plan under section 31 of the code.

NCLAT

Insolvency & Bankruptcy Code Does Not Override Public Body's Statutory Authority To Regulate Its Properties: NCLAT

Case Title: Prabhat Jain, Liquidator of Narmada Cereal Pvt. Ltd. vs MP Industrial Development Corporation Limited and Ors.

Case No.: Comp. App. (AT) (Ins.) No. 697 of 2023 & I.A. No. 2322 of 2023

The National Company Law Appellate Tribunal, New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Naresh Salecha (Technical Member) and Mr Indevar Pandey (Member) held a liquidator cannot not create sub-leases over public land without adhering to the statutory requirements. It was further held that Section 238 of the Insolvency and Bankruptcy Code, 2016 cannot override a public body's statutory authority to regulate its properties.

Application U/S 9 Of IBC Cannot Be Admitted For Invoices Covered By Prohibited Period U/S 10A Of Code: NCLAT

Case Title: Decor Paper Mills Ltd. Versus Mahashakti Plasto Pvt. Ltd.

Case Number: Company Appeal (AT) (Insolvency) No. 2022 of 2024 & I.A. No. 7591 of 2024

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has affirmed that application under section 9 of the code cannot be admitted for the invoices covered by prohibited period under section 10A of the code.

Pre-CIRP Dues Cannot Be Recovered After Admission Of Corporate Debtor Into Insolvency: NCLAT

Case Title: Central Transmission Utility of India Ltd. Versus Mr. Summit Binani and Anr.

Case Number: TA (AT) NO. 174/2021 (Company Appeal (AT) (Ins.) No. 1011/2020)

The NCLAT Chennai bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) has held that pre-CIRP dues cannot be recovered once the corporate debtor is admitted into insolvency due to moratorium under section 14 of the code. Any amount due to the corporate debtor can be recovered by filing claims before the IRP/RP as the case may be.

Resolution Professional Cannot Be Faulted To Revise Plans Multiple Times As Per Instructions Of CoC: NCLAT

Case Title: Fintech Restructuring LLP M/s Fairdeal Multifilament Private Limited and Ors.

Case Number: Company Appeal (AT) (Insolvency) No. 1823 of 2024

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Barun Mitra (Technical Member) has held that adverse remarks cannot be passed by the Adjudicating Authority against the RP for performing his duties in accordance with the commercial wisdom of the CoC. In this case, the Resolution Plans were revised multiple times for which the Adjudicating Authority found the RP responsible.

Declaration Of Loan Account/ Debt As NPA Can Be Considered As Date Of Default To File Petition U/S 7 Of IBC: NCLAT

Case Title: Bikram Bhadur Vs. Union Bank of India & Anr.

Case Number: Company Appeal (AT) (Insolvency) No. 1289 of 2024

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Barun Mitra (Technical Member) has held that upon declaration of the loan account/ debt as NPA that date can be reckoned as the date of default to enable the Financial Creditor to initiate action under Section 7 of the Code.

Approval Of Resolution Plan By CoC Cannot Be Interfered With Unless Section 30(2) Of Code Is Breached: NCLAT

Case Title: Yogeshkumar Jashwantilal Thakkar and Anr. Versus George Samuel, Resolution Professional of Jason Dekor Private Limited and Anr.

Case Number: Company Appeal (AT) (Insolvency) No. 1417 of 2024

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Barun Mitra (Technical Member) has held that approval of Resolution Plan by the Committee Of Creditors (CoC) cannot be interfered with unless it is violative of section 30(2) of the Code.

Section 43 Of IBC Cannot Be Attracted When No Transaction Was Made By Corporate Debtor: NCLAT

Case Title: Commercial Tax Department Versus Mr. Mangesh Vitthal Kekre and Anr.

Case Number: Company Appeal (AT) (Insolvency) No. 232 of 2024 & I.A. No. 737, 783 of 2024

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Barun Mitra (Technical Member) has held that section 43 of the code can be attracted only when the transaction in question is made by the corporate debtor and not when it is made by the third party in pursuance of a statutory demand.

NCLT

Decision To Consolidate CIRP Can Be Taken By CoC And Not By Suspended Director Of Corporate Debtors: NCLT Hyderabad

Case Title: Mr. Gajjala Yoganand versus Mr. Birendra Kumar Agarwal and Ors.

Case Number: IA No.373 of 2024 in CP(IB) No.296/7/HDB/2022

The NCLT Hyderabad bench of Sri Rajeev Bhardwaj (Judicial Member) and Sri Sanjay Puri (Technical Member) has affirmed that the decision to consolidate, or not, rests with the CoCs, who are not only better equipped to make such determinations but also have a vested interest in the outcome, and whose commercial wisdom is paramount in insolvency matters and beyond judicial review.

Related Party Can't Be Allowed Backdoor Entry Into CoC On Account Of Its Operational Debt: NCLT Kolkata

Case Title: M/s Avani Towers Private Limited vs. M/s Energy Properties Private Limited

Case Number: IA(IBC) No. 1299/ (KB)/ 2024 in Company Petition No. (IB)-1711/(KB)/2019

The NCLT, Kolkata bench of Justice Ashok Kumar Bhardwaj has held that once a Financial Creditor had been classified as a “related party”, it could not be allowed to gain entry into Committee of Creditors (CoC) on account of its Operational Debt as it would amount to defeating the legislative intent of keeping related parties out and running of CoC by external creditors. Reliance was placed upon the judgment of the Supreme Court in Phoenix Arc Private Limited vs. Spade Financial Services Private Limited & Ors. to hold that the exclusion referred to in first proviso to Section 21(2) of Insolvency and Bankruptcy Code, 2016 (IBC) lays emphasis on the relationship existing between the parties and not the debt itself.

Limitation Period For Both Corporate Debtor And Personal Guarantor Will Commence From Same Date: NCLT Hyderabad

Case Title: Jammu and Kashmir Bank Limited Vs. Mr. Kanumuru Raghu Rama Krishna Raju

Case Number: CP (IB) No.54/95/HDB/2022

The NCLT Hyderabad bench of Sri Rajeev Bhardwaj (Judicial Member) and Sri Sanjay Puri (Technical Member) has held that the Personal Guarantor should be treated on an equal legal footing with the Corporate Debtor, as it is clearly established by the law that the liability of Corporate Debtor and Personal Guarantor are co-extensive in nature. Therefore, the provisions of the Limitation Act must be applied consistently to both the Corporate Debtor and the Personal Guarantor. The limitation period for both the parties will commence from the same date.

All Claims Including Subject Matter Of Ongoing Arbitration Proceedings Stand Extinguished After Approval Of Resolution Plan: NCLT Bengaluru

Case Title:Embassy Commercial Projects (Whitefield) Private Limited Versus Pankaj Srivastava

Case Number: I.A No. 545/2024 In CP (IB) No.74/BB/2023

The NCLT Bengaluru bench of K. Biswal (Judicial Member) and Shri Manoj Kumar Dubey (Technical Member) has held that all claims including subject matter of ongoing arbitration proceedings will stand extinguished after the approval of the Resolution Plan under section 31 of the Code.

No Proceedings Against Corporate Debtor Can Be Initiated Or Continued Over Claim Which Is Not Part Of Resolution Plan: NCLT Mumbai

Case Title: Mr. Rajkumar Jhawar and Anr. Vs Mr. Arun Kapoor and Ors.

Case Number: IA No. 3390/2024 In CP (IB) 2517/MB/2018

The NCLT Mumbai bench of Anil Raj Chellan (Technical Member) and Kuldip Kumar Kareer (Judicial Member) has affirmed that once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of Section 31 of the Code, the claims as provided in the resolution plan shall stand frozen and will be binding on all stakeholders. Thereafter, no person will be entitled to initiate or continue any proceedings in respect to a claim which is not part of the resolution plan.