Belated Claims Of Homebuyers, If Reflected In The Records Of Corporate Debtor Shall Be Included In Information Memorandum By Resolution Professional: NCLAT

Case Title: Puneet Kaur v K V Developers Private Limited

Case No.: Company Appeal (AT) (Insolvency) No. 390 of 2022

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising of Justice Ashok Bhushan, Ms. Shreesha Merla, Mr. Naresh Salecha, has held that the claims of those homebuyers who could not file their claims within stipulated time but the same were reflected in the record of the Corporate Debtor ought to have been included in the information memorandum and the Resolution Applicant ought to have been take note of the same and deal with the in the Resolution Plan. It was observed that non-consideration of such claims, which are reflected from the record, leads to inequitable and unfair resolution as is seen in the present case. NCLAT directed the Resolution Professional to submit the details of homebuyers whose details are reflected in the record of the Corporate Debtor to the Successful Resolution Applicant, and the latter shall prepare an addendum to resolution plan which may be placed before the COC for consideration. The exercise is to be completed within a period of three months.

NCLAT Stays Insolvency Proceedings Against RHC Holdings Pvt. Ltd.

Case Title: Daiichi Sankyo Ltd. v Religare Comtrade Ltd. & Ors

Case No.: Company Appeal (AT) (Ins.) No. 645 of 2022

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising of Justice Ashok Bhushan and Mr. Naresh Salecha, has stayed the Corporate Insolvency Resolution Process ("CIRP") of RHC Holdings Pvt Ltd. initiated by NCLT New Delhi on 13.05.2022. RHC Holdings Pvt. Ltd. (RHC) is the company through which Singh Brothers namely Malvinder Singh and Shivinder Singh sold Ranbaxy India to Daiichi Sankyo. Daiichi Sankyo had filed an appeal before the NCLAT against the Order dated 13.05.2022, wherein NCLT had admitted the petition filed by Religare Comtrade Ltd. under Section 7 of the Insolvency & Bankruptcy Code, 2016. In fact, Religare had filed 23 petitions against various related entities of RHC under Section 7 of IBC to defeat the claim of Daiichi. NCLAT noted that the Supreme Court vide its order dated 05.04.2019 had stayed 23 petitions filed by Religare, and in furtherance of Supreme Court order NCLT itself stayed all proceedings on 11.04.2019. NCLAT stayed the CIRP initiated against RHC Holdings Pvt. Ltd. accordingly.

NCLAT Stays The Constitution Of COC In The CIRP Of Bombay Rayon Fashions Ltd.

Case Title: Prashant Agarwal v Vikash Parasprampuria

Case No.: Company Appeal (AT) (Ins.) No. 690 of 2022

The National Company Law Appellate Tribunal ("NCLAT"), New Delhi Bench, comprising of Justice M. Venugopal (Judicial Member) and Shri Kanthi Narahari (Technical Member), has stayed the constitution of the Committee of Creditors ("CoC") in the Corporate Insolvency Resolution Process ("CIRP") of Bombay Rayon Fashions Ltd.

The Respondent, Vikash Parasprampuria, has proposed settlement by submitting that it would be satisfied if Bombay Rayon pays the principal amount alongwith the CIRP cost towards settlement. Bombay Rayon is yet to seek instructions on the settlement proposal. The Bench has stayed the constitution of CoC in the CIRP of the Corporate Debtor, while the CIRP process would otherwise continue. The matter has been next listed on 07.07.2022 for the Appellant to accept or reject the settlement proposal of the Respondent. The order was passed on 15.06.2022.

NCLT Has Power To Recall Its Order: NCLAT

Case Title: Printland Digital (India) Pvt. Ltd. v Nirmal Trading Company

Case No.: Company Appeal (AT) (Insolvency) No. 504 of 2022

The National Company Law Appellate Tribunal (NCLAT) bench comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Alok Srivastva (Technical Member) recently held that the National Company Law Tribunal has the power to recall its order of closing the right to file reply. It was observed that there is a difference between recalling an order and review of an order where an issue is decided on merit by the Tribunal. "No doubt that the Adjudicating Authority has no jurisdiction to review its order after deciding a substantial issue but it has the jurisdiction to recall the order of the kind in dispute i.e., where the right to Reply was closed by an order on the ground that the opportunities granted were not availed." The order was passed on 30.05.2022.

NCLAT Terminates The CIRP Of Kanoria Sugar & General Manufacturing Co. Ltd., As Parties Enter Settlement

Case Title: Kanoria Sugar and General Manufacturing Co. Ltd. v Punjab National Bank

Case No.: Company Appeal (AT) (Ins.) No. 548 of 2022.

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Naresh Salecha (Technical Member), has terminated the Corporate Insolvency Resolution Process ("CIRP") of Kanoria Sugar and General Manufacturing Co. Ltd. ("Appellant"), which was initiated by NCLT vide an order dated 27.04.2022. A settlement was arrived at between the parties and a One Time Settlement (OTS) proposal dated 31.05.2022 was accepted by the Respondent Bank for an amount of Rs. 40 Crores. A joint application bearing I.A. No. 1782 of 2022 was filed by both the parties to bring the settlement on record. The NCLAT permitted the Respondent Bank to withdraw the Section 7 petition in view of settlement and the CIRP was terminated against the Appellant. The order was passed on 03.06.2022.

NCLAT Set Asides Insolvency ProcessAgainst HCL

Case Title: C Vijay Kumar v Sahaj Bharti Travels

Case No.: Company Appeal (AT) (Insolvency) No. 58 of 2022

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising of Justice Ashok Bhushan, Ms. Shreesha Merla and Mr. Naresh Salecha allowed the appeal filed by the suspended director of HCL Technologies (HCL) and set aside the Corporate Insolvency Resolution Process (CIRP) initiated against the HCL. NCLAT held that merely having a remedy under Arbitration and Conciliation Act, 1996 is a not a ground to deny relief under IBC but it has to be considered that IBC proceedings should not be converted into debt recovery proceedings.

The Bench observed that HCL is a globally renowned business entity and the Balance Sheet of HCL for the financial year ending on 31.03.2018 reflects a turnover of INR 61,786 Crores and a profit of INR 8,772 Crores. NCLAT ruled that the proceedings under IBC were only initiated by Operational Creditor for virtually establishing its claim of minimum guarantee amount which was never accepted or admitted by HCL and therefore, the present proceedings were initiated as a debt enforcement measure. Accordingly, NCLAT allowed the appeal filed by suspended director of HCL and set aside the insolvency admission order against HCL.

NCLAT Limits Supertech's Insolvency Process To One Project

Case Title: Ram Kishor Arora v. Union Bank of India

Case No.: Company Appeal (AT) (Insolvency) No. 406 of 2022

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising of Justice Ashok Bhushan and Mr. Naresh Salecha, has modified its stay order on constitution of Committee of Creditors of Supertech Ltd. (Supertech) and limited the Corporate Insolvency Resolution Process of Supertech to one project i.e., Eco Village II. Earlier, the NCLAT vide its order dated 12.04.2022 while granting time to the promoters of Supertech to settle the dispute with the Union Bank of India directed the Interim Resolution Professional not to constitute the COC. The Bench noted that as per the status report filed by IRP, out of the total 49,554 units Supertech has sold 38,603 units which is a substantial number.

The NCLAT modified its interim order and directed that project wise resolution to be started to test out the success of such resolution and directed that the construction of other projects shall continue under the supervision of IRP with the assistance of ex management. NCLAT directed the IRP that the COC be constituted only for the Eco Village II project and claims received regarding the Eco Village II project shall be separated and accordingly information memorandum shall be prepared only for Eco Village II. NCLAT also directed that no resolution plan shall be put to vote without the leave of NCLAT. The next date of hearing is 27.07.2022 for filing of status report by IRP. The order was passed on 10.06.2022.

NCLT

NCLT Kolkata Initiates InsolvencyProcess Against The Personal Guarantor Of Gontermann-Pipers (India) Ltd.

Case Title: UCO Bank v Vinod Kumar Mittal

Case No.: C.P.(IB)/24(KB)2021

The National Company Law Tribunal ("NCLT"), Kolkata Bench, comprising of Shri Rohit Kapoor (Judicial Member) and Shri Harish Chander Suri (Technical Member), has initiated Insolvency Resolution Process against Mr. Vinod Kumar Mittal, who is the Personal Guarantor to the loan sanctioned to Gontermann-Pipers (India) Limited by UCO Bank.

Incorporated in 1966, Gontermann-Pipers (India) Limited was a technical collaboration between Mr. H.K. Nathani of Calcutta and Gontermann-Peipers GmBH, Germany, the latter being a leading European manufacturer of rolling mill rolls since 1825. GPIL was a leading manufacturer of iron and steel rolls in India and is presently undergoing liquidation proceedings. Mr. Vinod Kumar Mittal is one of the Directors of GPIL and had furnished Personal Guarantee before UCO Bank in relation to the credit facilities availed by GPIL from the said Bank. When GPIL failed to repay the credit facilities, UCO Bank filed a petition under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 ("IBC") before the NCLT Kolkata, seeking initiation of Insolvency Resolution Process against Mr. Vinod Kumar Mittal, the Personal Guarantor in the concerned credit facilities. The NCLT Bench permitted initiation of insolvency process against the Personal Guarantor. The order was passed on 27.06.2022.

Under 'Right Of Subrogation' Guarantor Is Entitled To Initiate CIRP Against Principal Borrower: NCLT Kolkata

Case Title: Orbit Towers Pvt. Ltd. v Sampurna Suppliers Pvt. Ltd.

Case No.: C.P (IB) No. 2046/KB/2019

The National Company Law Tribunal ("NCLT"), Kolkata Bench, comprising of Shri Rohit Kapoor (Judicial Member) and Shri Harish Chander Suri (Technical Member), has held that if a Guarantor pays the debt on behalf of the Principal Borrower, then it steps into the shoes of the Creditor and can initiate Corporate Insolvency Resolution Process ("CIRP") against the Principal Borrower.

"Any agreement of guarantee between the Indian Bank and the Guarantor is sufficient for the purpose of bestowing all the rights of the Bank/creditor upon the Financial Creditor herein once the Financial Creditor has discharged all the liability of the Corporate Debtor towards Indian Bank. There may or may not be any agreement between the Financial Creditor and the Corporate Debtor. It does not make any difference at all. The Law is very clear that once the Guarantor/surety discharges the liability of the Principal borrower towards the creditor, all the rights of the Creditor to recover that money would automatically be transferred in favour of the surety/ Guarantor. This is exactly the right of subrogation". The order was passed on 27.06.2022.

Bank Of India V Future Retail: NCLT Mumbai Reserves Order On Amazon's Intervention Application

Case title: Bank of India v Future Retail Ltd.

Case No.: CP (IB) No. 527/MB/2022.

The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Justice P.N. Deshmukh (Judicial Member) and Shri Shyam Babu Gautam (Technical Member), has vide an order dated 27.06.2022 reserved the matter for orders on the intervention application.

Amazon has been opposing the insolvency plea filed by Bank of India. It has been argued by Amazon that Future Retail Ltd. (FRL) failed to honour the Emergency Arbitrator's Award passed in Singapore Arbitration proceedings in October 2020, whereby FRL was barred from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party. Therefore, the lenders could not have entered into a Framework Agreement with FRL in breach of the said Award.

Issuance Of Post Dated Cheques Is Not An Unqualified Admission Of Debt, NCLT Allahabad Dismisses Section 7 Application

Case Title: N.C. Goel & Maya Goel v Piyush Infrastructure India Private Limited

Case No.: CP (IB) No.453/ALD/2019

The National Company Law Tribunal ("NCLT"), Allahabad Bench, comprising of Shri Rajasekhar V.K. (Judicial Member) and Shri Virendra Kumar Gupta (Technical Member), has held that issuance of post dated cheques cannot be taken to be unqualified admission of debt, because the presumptions drawn under Section 118 and Section 139 of the Negotiable Instruments Act, 1881, are rebuttable presumptions.

The Bench further observed that the loans were given between 2011 to 2016 by the Applicants. However, in absence of any documentation, no date of default could be established. The date of default can only be calculated when the tenure of the loan is established, or when there is a demand for repayment. It was observed that receipt of interest was only evidenced through two letters of the Respondent, thus the claim regarding receipt of interest remain unsubstantiated. The order was passed on 13.06.2022.

NCLT Mumbai Initiates Insolvency Process Against Bombay Rayon Fashions Ltd.

Case Title: Vikash Parasprampuria v Bombay Rayon Fashions Limited

Case No.: CP (IB) No.1443/MB-IV/2020

The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Mr. Kishore Vemulapalli (Judicial Member) and Mr. Rajesh Sharma (Technical Member), has initiated Corporate Insolvency Resolution Process ("CIRP") against Bombay Rayon Fashions Ltd. and Mr. Santanu T Ray has been appointed as the Interim Resolution Professional. The order was passed on 07.06.2022.

Application By Chairman Of Monitoring Committee For CIRP Of Corporate Debtor's Debtor, Maintainable: NCLT Delhi

Case Title: Educomp Infrastructure & School Management Ltd. v Millenium Education Foundation

Case Title: C.P. No. (IB) 245/ND/2022.

The National Company Law Tribunal ("NCLT"), New Delhi Bench, comprising of Shri Abni Ranjan Kumar Sinha (Judicial Member) and Shri Hemant Sarangi (Technical Member), has held that a Chairman of Monitoring Committee can file an application under IBC for initiating Corporate Insolvency Resolution Process ("CIRP") against the Corporate Debtor's debtor.

It was observed that the Chairman of Monitoring Committee is covered under the purview of IBC by virtue of Section 2(d), which states that the provision of IBC is applicable to "such other body incorporated under any law for the time being in force, as the Central Government may, by notification, specify in this behalf". The Monitoring Committee is formed and its Chairman is appointed under the provisions of IBC. Therefore, the Chairman possesses the proper authority to take necessary steps to protect the Corporate Debtor's interest. The order was passed on 03.06.2022.

Preferential,Fraudulent Or Avoidable Transaction, Material Facts To Be Pleaded : NCLT Kolkata

Case Title: Star India Private Limited v Advance Multisystem Broadband Communications Limited

Case No.: C.P. (IB) No. 1510/KB/2018

The National Company Law Tribunal ("NCLT"), Kolkata Bench, comprising Mr. Rohit Kapoor (Judicial Member) and Mr. Harish Chander Suri (Technical Member), has held that a transaction cannot be alleged to be preferential, fraudulent or avoidable by the Resolution Professional, unless an enquiry has been conducted by the relevant experts and specific material facts have been stated as to why such transaction would be covered under Section 45, 46, 47 and 66 of the Insolvency and Bankruptcy Code, 2016 ("IBC").

The Bench opined that Resolution Professional can file an application under Section 25(2) (j) of the IBC only after being satisfied about the particular transactions being avoidable, fraudulent or undervalued. It was incumbent upon the Resolution Professional to seek assistance of the Forensic Audit if so required, to engage the services of accountants, legal or other professionals with a view to satisfy himself about the transactions being avoidable. Without meeting the aforesaid requirements, the Resolution Professional cannot not directly approach the Adjudicating. The order was passed on 30.05.2022.

NCLT Mumbai Initiates Insolvency Proceedings Against Nirmal Lifestyle (Kalyan) Pvt. Ltd.

Case Title: Srei Equipment Finance Limited v Nirmal Lifestyle (Kalyan) Private Limited

Case No.: CP (IB) No.1337/MB/2020

The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Mr. Kishore Vemulapalli (Judicial Member) and Mr. Rajesh Sharma (Technical Member), has initiated Corporate Insolvency Resolution Process ("CIRP") against Nirmal Lifestyle (Kalyan) Pvt. Ltd. ("Corporate Debtor") and has appointed Mr. DilipKumar Natvarlal Jagad as the Interim Resolution Professional. The order was passed on 16.06.2022.

The Adjudicating Authority observed that two defaults in Loan repayment dated 05.02.2020 and 05.03.2020 were amounting to Rs. 1,12,50,000/-. The remaining repayment defaults between 05.04.2020 and 05.09.2020 were hit by Section 10A of the IBC and therefore, could be considered as default. The Bench observed that the actual default made by the Corporate Debtor was Rs.1,12,73,387/- along with interest and hence CIRP could be initiated, as the default meets the minimum threshold of Rs. 1 Crore.

Corporate Debtor Cannot Be Dragged Into CIRP Mala Fide For Any Purpose Other Than Resolution Of Insolvency: NCLTMumbai

Case Title: Gateway Offshore Private Limited and Anr. v Runwal Realtors Private Limited

Case No.: CP (IB) 954/MB/C-I/2019

The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Justice P. N. Deshmukh (Judicial Member) and Mr. Kapal Kumar Vohra (Technical Member), has held that a written contract cannot be treated as a pre- requisite to prove the existence of a financial debt and the Adjudicating Authority must be satisfied that the Corporate Debtor is not being dragged into Corporate Insolvency Resolution Process ("CIRP") mala fide for any purpose other than the resolution of the Insolvency. The order was passed on 10.06.2022.

Claims That Were Not A Part Of The Resolution Plan, Can't Be Claimed After Approval Of The Resolution Plan: NCLT Mumbai Reiterates

Case Title: State Bank of India v Rohit Ferro Tech Limited

Case No.: C.P. (IB) No. 1214/KB/2018

The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Shri Rohit Kapoor (Judicial Member) and Shri Harish Chander Suri (Technical Member), has held that claims or reliefs which were not a part of the Resolution Plan, cannot be claimed after the said Resolution Plan is approved by the Adjudicating Authority. The Bench held that as the Applicant had not approached the Adjudicating Authority while the Resolution Plan was under consideration, therefore, the Applicant had no right to file any application or seek any relief after the approval of the Resolution Plan. The Order was passed on 14.06.2022.

Limitation Is Refreshed Each Year When Corporate Debtor Admits Debt In Its Financial Statements: NCLT Mumbai Initiates CIRP Against GIT Textiles

Case Title: UCO Bank v GIT Textiles Manufacturing Limited

Case No.: C.P (IB) No. 600/KB/2019

The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Shri Rohit Kapoor (Judicial Member) and Shri Harish Chander Suri (Technical Member), has initiated Corporate Insolvency Resolution Process ("CIRP") against GIT Textiles Manufacturing Ltd. for a default that had occurred in 2012 and has held that limitation refreshed each subsequent year when the Corporate Debtor acknowledged the financial debt in its Financial Statements. The Bench held that due to the specific admissions of debt by the Corporate Debtor, Section 18 of the Limitation Act, 1963 was applicable and it resulted in fresh computation of limitation period of three years from the date of acknowledgment in each balance sheet. "Since the last of such acknowledgments was made on 31.03.2019, the limitation period would last up till 31.03.2022. Thus, the present petition was held to be well within limitation."

NCLT Chennai Restraints Liquidator From Dealing With Assets Of Jeypore Sugar Co. Ltd.

Case Title: IDBI Bank v Jeypore Sugar Company Ltd.

Case No.: CP/1307/IB/2018

The National Company Law Tribunal ("NCLT"), Chennai Bench, comprising of Justice S. Ramathilagam (Judicial Member) and Shri Anil Kumar B (Technical Member), has restrained the liquidator from dealing with the assets of Jeypore Sugar Company Ltd. ("Corporate Debtor") till the pendency of the application filed by promoters of the Corporate Debtor.

The Promoters of the Corporate Debtor had filed an application before the NCLT, alleging that the Liquidator was selling the plant and machinery of the Corporate Debtor for a scrap value. The NCLT Bench observed that the NCLAT had imposed a stay on the order dated 17.11.2021 of the NCLT, which was in operation till date and hence the Liquidator cannot be permitted to sell the plant and machinery of the Corporate Debtor. It was held that, "The Liquidator shall not deal with any of the assets of the Corporate Debtor till the disposal of the present application. Further, Respondent No. 12 is also restrained from lifting any kind of machinery or scrap until the disposal of the present application." The order was passed on 03.06.2022.

Ansal Properties Pays The Dues Lately, NCLT Delhi Dismisses Insolvency Petition Imposing A Cost Of Rs. 1 Lakh On Ansal

Case Title: M/s. Dalmia Family Office Trust v M/s. Ansal Properties and Infrastructure Limited

Case No.: (IB)-639(ND)/2021

The National Company Law Tribunal ("NCLT"), New Delhi Bench, comprising of Shri. Abni Ranjan Kumar Sinha (Judicial Member) and Shri. L. N. Gupta (Technical Member), has dismissed the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("IBC"), seeking initiation of the Corporate Insolvency Resolution Process ("CIRP") against Ansal Properties and Infrastructure Ltd. after the outstanding dues were paid off. A cost of Rs. 1 Lakh has been imposed on Ansal Properties and Infrastructure Ltd. for delaying the proceedings and depositing the due amount in the account of Dalmia Family Office Trust without its consent and after the NCLT Bench had reserved the order. The Order was passed on 06.06.2022.

Wave Megacity Projects, NCLT Dismisses Wave's Insolvency Plea With A Cost Of One Crore

Case Title: In the Matter of Wave Megacity Centre Private Limited

Case No.: C.P. (IB) No. 197 (PB)/2021

The National Company Law Tribunal (NCLT), Principal bench, comprising of Shri Bhaskara Pantula Mohan (Member Judicial) and Shri Hemant Kumar Sarangi (Member Technical), dismissed the insolvency petition filed by Wave Megacity Centre Private Limited (Wave) under Section 10 of the Insolvency and Bankruptcy Code, 2016. The Bench also imposed a cost of INR One Crore on Wave for filing the insolvency petition against itself for malicious or fraudulent intent and also directed the Central Government to make necessary investigation into the affairs of Wave.

The bench held that the removal of the directors of Wave just before filing of the Section 10 Petition is an indicator that the management who was running the Wave wants to hide from the reasons of default and wants to immunize itself from the rigors of the Code. NCLT noted that there are around 285 cases pending against Wave and the possibility of filing the Section 10 Petition to escape the liability arising out of this pending litigation cannot be overlooked. "We have concluded that the application filed under Section 10 of IBC, 2016 was an attempt on the part of the Corporate Debtor to play fraud on thousands of homebuyers, Noida Authority, Government etc. Further greater prejudice must have caused to them if CIRP was triggered." Further, NCLT also directed the Central Government to make necessary investigation into the affairs of Wave as it has collected huge amount in cash and siphoned off the same.

NCLT Closes The Right To File Reply Due To Delay, NCLAT Delhi Allows Appeal And Directs To Take Reply On Record

Case Title: Samyak Metals Pvt. Ltd. v Ugro Capital Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 668 of 2022.

The National Company Law Appellate Tribunal ("NCLAT"), New Delhi Bench, comprising of Justice M. Venugopal (Judicial Member) and Shri Ashok Kumar Mishra (Technical Member), has permitted taking on record of a Reply, which was allegedly lying with the Registry for over 50 days for curing of defects and the Adjudicating Authority had thus refused to take it on record by closing the right to file reply. The order was passed on 08.06.2022.

The NCLAT observed that Rule 34 of the NCLT Rules, 2016 provides that in a situation not provided in these rules, the Tribunal (Adjudicating Authority) may determine in the procedure in a particular case in accordance with the Principles of Natural Justice, by recording reasons in writing. The Bench reiterated that every man must be given an opportunity of being heard. "The technical aspect of the Appellant keeping his Reply lying in the Registry based on the objection is not a proper one without delving deep in the matter any further and also at this stage this Tribunal is not expressing any opinion one way or other about the merits of the matter which is to be taken up on arguments on 09.06.2022."

IBBI

IBBI Suspends Insolvency Professional For Violation Of Code Of Conduct

Case No.: No. IBBI/DC/107/2022

The Disciplinary Committee of the Insolvency and Bankruptcy Board of India ("IBBI"), while adjudicating a Show Cause Notice in the matter of Mr. Kedarram Ramratan Laddha (Insolvency Professional), has suspended the Insolvency Professional for a period of one year for accepting assignment as an Interim Resolution Professional without having a valid Authorisation for Assignment ("AFA") and while disciplinary proceedings were pending against him. The Order was passed on 24.06.2022.

The Disciplinary Committee observed that "the Code of Conduct prescribed under Insolvency Professional Regulations mandates the Insolvency Professional to inform such persons under the IBC as may be required, of a misapprehension or wrongful consideration of a fact of which he becomes aware, as soon as may be practicable and not to conceal any material information or knowingly make a misleading statement to the IBBI, the Adjudicating Authority or any stakeholder, as applicable".

It was held that ample opportunities were available to Mr. Kedarram to disclose the facts before Adjudicating Authority regarding non possession of a valid AFA and pendency of disciplinary proceeding against him. Accordingly, the Disciplinary Committee found the conduct of Mr. Kedarram in accepting the assignment as IRP of the Corporate Debtor without holding valid AFA and during pendency of disciplinary proceedings, was in violation of the IBBI Circular No: LA/010/2018 dated 23.04.2018, Section 208(2)(a) and 208(2)(e) of the IBC read with regulation 7A, 7(2)(a) and 7(2)(h) of IP Regulations, Clause 1, 2, 11, 12 and 14 of the Code of Conduct prescribed under IP Regulations.

CIRP Conducted In A "Brazen Manner": IBBI Suspends Insolvency Professional For Three Years

Case No.: IBBI/DC/108/2022

The Disciplinary Committee of the Insolvency and Bankruptcy Board of India ("IBBI"), while adjudicating a Show Cause Notice dated 08.04.2022 in the matter of Mr. Partha Sarathy Sarkar (Insolvency Professional), has suspended the Insolvency Professional for a period of three years for acting in contravention of the Insolvency and Bankruptcy Code, 2016 ("IBC") and the IBBI (Insolvency Resolution process for Corporate Persons) Regulations, 2016 ("CIRP Regulations"). The specific violations were such that the Insolvency Professional had failed to make timely public announcement; did not seek extension from the Adjudicating Authority when CIRP period expired; failed to appoint registered valuers, maintain proper list of creditors and take control of the Corporate Debtor's assets. The Order was passed on 24.06.2022.

IBBI Amends Its Regulations On Information Utilities

The Insolvency and Bankruptcy Board of India has introduced second round of amendments to the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 ("Information Utility Regulations") vide a notification dated 14.06.2022, bearing No. IBBI/2022-23/GN/REG085 in order to improve the availability of information. These amendments have come into force on 14.06.2022.

The amendments are as follows:

1. Before filing an application to initiate Corporate Insolvency Resolution Process (CIRP) under Section 7 or 9 of the Insolvency and Bankruptcy Code, 2016 ("IBC"), the creditor shall have to file the information of default, with the Information Utility. The Information Utility shall process the said information for the purpose of issuing record of default in accordance with Regulation 21.
2. Previously only creditors were duty bound to submit their claims to the Resolution Professional, now the Corporate Debtor or its Promoter or any associate thereof is required to submit such information to the Resolution Professional in the prescribed format.
3. The Operational Creditors will have to furnish the extracts of E-way bill, Form GSTR-1 and Form GSTR-3B alongwith their application under Section 9 of the IBC, if the concerned laws are applicable to them.
4. In order to aid the Resolution Professional in preparation of the Information Memorandum, the creditors of the Corporate Debtor will have to share information with the Resolution Professional pertaining to the Corporate Debtor's assets, liabilities, latest financial statements and other financial information, as available with them.
5. The Financial and Operational Creditors will have to furnish their PAN number and email ID while filing application under Section 7 or 9 of IBC.

HIGH COURT

Cannot Invoke Article 226 If An Effective And Statutory Remedy Exists Before NCLAT: Madras High Court

Case Title: Sunku Vasundhara v State Bank of India

Case No.: W.P.Nos.14398 of 2022

The High Court of Madras Bench comprising of Justice T. Raja and Justice K. Kumaresh Babu, while adjudicating a writ petition filed in Sunku Vasundhara v State Bank of India, has held that when an effective and statutory remedy lies before the Appellate Authority i.e. National Company Law Appellate Tribunal (NCLAT), aggrieved parties cannot invoke Article 226 of the Constitution of India for relief. The order was passed on 15.06.2022.

The Petitioner had filed a Writ Petition under Article 226 of the Constitution of India before the High Court of Madras, seeking issuance of a Writ of Certiorari against an order passed by the National Company Law Tribunal ("NCLT"), Chennai Bench on 29.04.2022.

The High Court held that the Petitioner has an effective and statutory remedy before the Appellate Authority i.e. National Company Law Appellate Tribunal (NCLAT) and thus Article 226 of the Constitution of India cannot be invoked. An appeal should have been filed before the NCLAT and not the High Court.

Whether Income Tax Demand And Penalty Extinguished In CIRP? Delhi High Court Stays Demand Notice

Case Title: Indo Enviro Integrated Solution Limited v ACIT

Citation: W.P.(C) 8899/2022

The Delhi High​​ Court bench comprising of Justice Manmohan and Justice Manmeet Pritam Singh stayed an income tax assessment order, consequential demand and notice of penalty, which were assailed on grounds of being in contravention of the order of the National Company Law Tribunal (NCLT).

An application was filed by the Union of India (through the Ministry of Corporate Affairs) under Sections 241 and 242 of the Companies Act before the NCLT based on recommendations of the Ministry of Finance, Department of Economic Affairs. It was alleged that operations of the IL & FS Group of Companies were being carried out in a manner prejudicial to the public interest. The application was made under Sections 241 and 242 of the Companies Act. The Union of India could not file an application under the IBC as in India there exists no concept of group level insolvency resolution and, at the relevant date, financial services were outside the ambit of the IBC. The issue raised was whether government debts can be extinguished under the Companies Act resolution process (which is not the same as the IBC process). The court, while listing the matter on September 27, 2022, has stayed the order as well as consequential income tax notices of demand and penalty.