IBC Resolution Plan Can't Ignore Government Dues: Supreme Court Dismisses Review Petitions Against 'Rainbow Papers'

Case title: Sanjay Agarwal v. State Tax Officer

Citation: 2023 LiveLaw (SC) 939

The Supreme Court has dismissed a batch of review petitions filed against a 2022 judgment which held that the definition of a secured creditor under the Insolvency and Bankruptcy Code, 2016 (“IBC”) 2016 included any government or governmental authority and that a resolution plan which ignored dues to the government was liable to be rejected.

A bench comprising Justices AS Bopanna and Justice Bela M. Trivedi was considering five review petitions filed against the 2022 judgment in State Tax Officer v. Rainbow Papers Ltd 2022 LiveLaw (SC) 743 delivered by a bench comprising Justices Indira Banerjee (since retired) and AS Bopanna.

“The submissions made by the counsels for petitioners that the court in the impugned judgment had failed to consider the waterfall mechanism as contained in Section 53 and failed to consider other provisions of IBC are factually incorrect. As evident from a bare reading of the judgment, the court had considered not only the waterfall mechanism under Section 53 but also other provisions of IBC for deciding the priority for the purpose of distributing proceeds from the sale as liquidation assets. In view of aforestated legal position, we are of the opinion the judgment sought to be reviewed does not fall within scope and ambit of review. So we’re dismissing all the review petitions.”

IBC | Tax & Customs Dues To Be Paid As Per Waterfall Mechanism Under Section 53: Supreme Court

Case Title: Principal Commissioner of Customs V Rajendra Prasad Tak & Ors.

Citation: 2023 LiveLaw (SC) 952

The Supreme Court Bench comprising Justice Sanjiv Khanna and Justice S.V.N. Bhatti, has clarified that the dues of the Central Board of Indirect Taxes & Customs, Department of Revenue, will be paid as per the waterfall mechanism given under Section 53 of the Insolvency and Bankruptcy Code, 2016 (“IBC”).

Section 53 of IBC provides the order of priority in which proceeds from sale of liquidation assets is to be distributed amongst Corporate Debtor’s creditors, stakeholders etc.

Supreme Court Upholds Constitutionality Of IBC Provisions Relating To Personal Guarantors; Says Adjudicatory Role Can't Be Read Into Sec 97

Case Title: Surendra B. Jiwrajika and Anr. vs. Omkara Assets Reconstruction Private Limited

Case No.: SLP(C) No. 016464/2021

The Supreme Court Bench comprising Chief Justice DY Chandrachud, Justices JB Pardiwala and Justice Manoj Misra, has upheld the constitutionality of the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC) relating to Personal Guarantors' Insolvency Resolution, which were introduced through the amendments made in 2019.

The Court held that these provisions (Section 95 to 100 of IBC) cannot be held as unconstitutional for not affording an opportunity of hearing to the personal guarantors before the insolvency petition filed by creditors is admitted against them and the moratorium is automatically applied against them as soon as the insolvency petition is filed.

"The statute (IBC) does not suffer from any manifest arbitrariness to violate Art 14 of the Constitution,"

The bench further held that it cannot read an adjudicatory role into these provisions and that the entire process of timelines would be rendered negatory if the role of adjudicator is changed. For the Court to change the adjudicatory role envisaged under these provisions would amount to "rewriting the legislative functions", the Court said.

IBC | No Casual Interference With Commercial Wisdom Of CoC: Supreme Court Sets Aside NCLT Direction To Reevaluate Corporate Debtor's Assets

Case Title: Ramkrishna Forgings Limited v Ravindra Loonkar & Anr.

Citation: 2023 LiveLaw (SC) 1007

The Supreme Court bench comprising Justice Vikram Nath and Justice Ahsanuddin Amanullah, has set aside an order whereby the National Company Law Tribunal (“NCLT”) kept the approval of a resolution plan in abeyance while directing an Official Liquidator to conduct re-valuation of the Corporate Debtor’s assets. Consequently, the order of National Company Law Appellate Tribunal (“NCLAT”) affirming the NCLT’s order has also been set aside.

An application under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (“IBC”) was filed by the Resolution Professional before NCLT, seeking approval of the resolution plan submitted by Successful Resolution Applicant(SRA). The valuation of Corporate Debtor’s assets was already done Resolution Professional as per the provisions of IBC and its Regulations. However, the NCLT kept the resolution plan in abeyance and appointed an Official Liquidator to conduct re-valuation of assets.

The Bench has held, “In the case at hand, we find that there was no occasion before the Adjudicating Authority NCLT to be swayed only on the per se ground that the hair-cut would be about 94.25% and that it was not convinced that the fair value of the assets have been projected in proper manner as the bid of the appellant was very close to the fair value of the assets of ACIL. Ordering revaluation of the assets, by the OL, Ministry of Corporate Affairs, Government of India, in-charge of the particular area, cannot be justified.”

IBC | For Rejection Of A Resolution Plan Under Section 31(2), NCLT Must Pass A Reasoned Order: Supreme Court

Case Title: Ramkrishna Forgings Limited v Ravindra Loonkar & Anr.

Citation: CIVIL APPEAL No.1527 OF 2022

The Supreme Court bench comprising Justice Vikram Nath and Justice Ahsanuddin Amanullah, has held that when the NCLT exercises its power under Section 31(2) of the Insolvency and Bankruptcy Code, 2016 to not approve a resolution plan, then a reasoned order must be passed. It was emphasized that recording of cogent reasons while passing an order is the duty of Courts and Tribunals.

The Supreme Court has set aside an order whereby the NCLT kept the approval of a resolution plan in abeyance while directing an Official Liquidator to conduct re-valuation of the Corporate Debtor’s assets. Consequently, the order of NCLAT affirming the NCLT’s order has also been set aside.

The Bench has further cautioned that the NCLT may direct re-valuation of Corporate Debtor’s assets when necessary, but strictly within the domain permitted by IBC.

The Bench has held, “It is worthwhile to note that the Adjudicating Authority has jurisdiction only under Section 31(2) of the Code, which gives power not to approve only when the Resolution Plan does not meet the requirement laid down under Section 31(1) of the Code, for which a reasoned order is required to be passed. We may state that the NCLT’s jurisdiction and powers as the Adjudicating Authority under the Code, flow only from the Code and the Regulations thereunder.”

NCLAT

NCLAT New Delhi: Jurisdiction Of NCLT Under IBC Is Summary In Nature, Not Extensive As A Civil Court To Enquire Into Disputes

Case Title: Sanjay Pandurang Kalate vs. Vistra ITCL (India) Ltd.

Case No.: Company Appeal (AT)(Insolvency) No. 742 of 2023

The National Company Law Appellate Tribunal (‘NCLAT’), Principal Bench, comprising of Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that the scope and jurisdiction of NCLT under the IBC being summary in nature, is distinctly not as extensive as that of a civil court to enquire into disputes arising out of Memorandum of Understanding (MoU) and related specific performance.

NCLAT New Delhi: Haircut In Resolution Plan Cannot Be Construed As Being Violative Of Section 30(2)(e) Of IBC

Case Title: Mr. Ankur Narang & Ors. vs. Mr. Nilesh Sharma RP & Ors.

Case No.: Company Appeal (AT)(Insolvency) No. 1240 of 2023

The National Company Law Appellate Tribunal (‘NCLAT’) Principal Bench, New Delhi comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member), has held that a haircut in Resolution Plan cannot be construed as being violative of Section 30(2)(e) of IBC and the minority homebuyers have to necessarily sail with the majority within the class.

NCLAT Delhi: Fine For Non-Cooperation By Ex-Management Under IBC Is A “Penalty” Not “Cost” And Outside NCLT’s Jurisdiction

Case Title: Rakesh Gupta & Ors. vs Mahesh Bansal.

Case No.: COMPANY APPEAL (AT) (Insolvency) No. 401 of 2022

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Anant Bijay Singh (Judicial Member) and Mr. Naresh Salecha (Technical Member), has held that the fine imposed on non-cooperation by ex-management u/s 19(2) or 34(3) of IBC is covered under the term “penalty” and not “cost” under Rule 149 of the National Company Law Tribunal Rules, 2016. The Bench further observed that imposing fines is outside the jurisdiction of NCLT.

NCLAT New Delhi: Operational Creditor Not Entitled To Benefit U/S 14 Of Limitation Act When Suit Filed By It Was Withdrawn By Itself Without Any Liberty To Institute Fresh suit

Case Title: GRI Towers India Pvt. Ltd. vs. Inox Wind Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 1106 of 2023

The National Company Law Appellate Tribunal (‘NCLAT’) Principal Bench, New Delhi comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member), has held that an Operational Creditor is not entitled for benefit of Section 14 of the Limitation Act, 1963 where the Suit filed by it was withdrawn on its own application without any liberty to institute a fresh suit.

NCLAT New Delhi: Dispute To Be ‘Truly In Existence’ At Time Of Reply Or Section 9 Application For Nullifying CIRP U/S 9 Of IBC

Case Title: Amrop India Pvt. Ltd. vs. The Hi-Tech Gears Ltd.

Case No.: Company Appeal (AT)(Insolvency) No. 1251 of 2023

The National Company Law Appellate Tribunal (‘NCLAT’), Principal Bench, comprising Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that the dispute raised must truly exist at the time of filing a reply to the Demand Notice under Section 8(2) of IBC or at the time of filing the Section 9 application for ‘pre-existing dispute’ to be a ground to nullify the CIRP application under Section 9 of IBC.

NCLAT Delhi: An Operational Creditor Who Is A Participant In Meetings Of CoC Has No Right To Seek A Copy Of Information Memorandum

Case Title: Vinay Kumar Singhal RP for PG Advertising Pvt. Ltd. Vs. Mahesh Bajaj

Case No.: Comp. App. (AT) (Ins) No. 645 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) has held that an Operational Creditor who is a participant in meetings of the Committee of Creditors (“CoC”) has no right to seek a copy of the Information Memorandum.

It was observed that both IBC and its Regulations are totally silent about the supply of the Information Memorandum to the participant. The legislature, however, has made a provision for providing a copy of the Information Memorandum to the member of the CoC and the Resolution Applicant but not to the participant of the meeting of the CoC. Therefore, a copy of the Information Memorandum need not be given to the Operational Creditor who is merely a participant of the CoC and not a member.

NCLAT Delhi: Claims Cannot Be Entertained After Approval Of Resolution Plan By CoC Even If Resolution Plan Is Still Pending For Approval By NCLT

Case Title: Suraksha Realty Ltd vs Anuj Bajpai Resolution Professional of Panache Aluminium Extrusion Pvt. Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 1389 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson), Mr Barun Mitra and Mr. Arun Baroka (Technical Members) has rejected an appeal and held that claims cannot be entertained after approval of the Resolution Plan by Committee of Creditors (“CoC”) even if the Resolution Plan is still pending for approval of the National Company Law Tribunal (“NCLT”).

NCLAT referred to the Supreme Court judgement in M/s. R.P.S. Infrastructure Limited Vs. Mukul Kumar and Anr. where the court has already taken the view that after approval of the plan by the CoC, any claims cannot be entertained.

Time Spent In Obtaining Legal Opinion And Engaging Counsel Is Not ‘Sufficient Cause’ For Condonation Of Delay In Filing Of Appeal: NCLAT Chennai

Case title: Anish Lawrence & Anr. v Renahan Vamakesan

Case No.: Company Appeal (AT) (CH) (Ins) No. 377 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that the time spent in obtaining legal opinion and engagement of counsel is not a ‘sufficient cause’ to condone the delay in filing of appeal under proviso to Section 61(2) of IBC.

The Bench was adjudicating an application for condonation of delay in filing of appeal wherein the Appellant had filed the appeal on exactly on the 45^th day after obtaining certified copy of order. The delay of beyond 30 days in filing of appeal had occurred due to the time was consumed in obtaining legal opinion and engaging a counsel. The Bench dismissed the application.

NCLAT Delhi: Benefit Under Section 17 Of Limitation Act Is Not Available When Fraud Was Played In Creditor Company And Not In Company Of Corporate Debtor

Case Title: Gyan Chandra Misra RP for Three C Green Developers Pvt. Ltd. Vs. Three C Universal Developers Pvt.

Case No.: Company Appeal (AT) (Insolvency) No.1316 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member), has that benefit under Section 17 of the Limitation Act, 1963 for filing a belated claim is not available when the fraud was played in the Creditor Company and not in the company of the Corporate Debtor.

NCLAT Delhi: Appellants Who Filed Their Claims As Real Estate Allottees Are A Part Of Home Buyers And Cannot Ask Refund Separately

Case Title: Rajib Biswas & Anr. Vs Arena Superstructures Pvt. Ltd. & Ors.

Case No.: Comp. App. (AT) (Ins) No. 1488 of 2022 & I.A. No. 4701 of 2022

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member), has held that the Appellants, who have filed their claims as Real Estate Allottees, are considered part of the home buyers. Therefore, if the home buyers have already been represented by an authorized representative who has approved the resolution plan, the Appellants cannot ask for a refund separately.

In Absence Of Rental Agreement Between Parties, RP Can’t Demand Payment Of Usage Charges For Corporate Debtor’s Machine; NCLAT Delhi

Case Title: Patsons Construction v Shri Ram Ratan Kanoongo

Case No.: Company Appeal (AT) (Ins.) No. 1269 of 2022

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has set aside a direction passed by the NCLT requiring a creditor to pay usage charges of a machine to the Corporate Debtor in absence of any rental agreement.

Prior to initiation of CIRP, the Corporate Debtor had given its Machine to an Operational Creditor to settle certain outstanding payments. The Operational Creditor was in possession of Machine for 2 years. Post CIRP commencement, the Resolution Professional filed an application before NCLT seeking handover of the Machine and payment of usage charge by the Operational Creditor to the Corporate Debtor at the rate of Rs. 2 Lakhs per month (total Rs. 48 Lakhs). The Bench held that in absence of any rental agreement between Parties in respect of the Machine, no usage charges can be demanded by the Resolution Professional.

NCLAT Delhi: Appellants Who Filed Their Claims As Real Estate Allottees Are A Part Of Home Buyers And Cannot Ask Refund Separately

Case Title: Rajib Biswas & Anr. Vs Arena Superstructures Pvt. Ltd. & Ors.

Case No.: Comp. App. (AT) (Ins) No. 1488 of 2022

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member), has held that the Appellants, who have filed their claims as Real Estate Allottees, are considered part of the home buyers. Therefore, if the home buyers have already been represented by an authorized representative who has approved the resolution plan, the Appellants cannot ask for a refund separately.

Corporate Debtor Denying Liability Prior To Issuance Of Demand Notice Is Pre Existing Dispute: NCLAT New Delhi

Case title: Panjwani Electrical Engineers and Consultants v Larsen And Toubro Ltd.

Case No.: Company Appeal (AT) (Insolvency) No.1399 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that when Corporate Debtor denied its liability to pay even prior to issuance of Demand Notice under Section 8 of IBC, then the petition under Section 9 of IBC is liable to be dismissed on the ground of pre-existing dispute.

NCLAT Delhi: Doctrine Of Promissory Estoppel Can’t Be Applied Against An Approved Resolution Plan

Case Title: Fervent Synergies Limited VS Manish Jaju

Case No.: Company Appeal (AT) (Insolvency) No.1338 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr Arun Baroka (Technical Member), has held that the doctrine of promissory estoppel cannot be applied against an approved Resolution Plan by the Committee of Creditors (“CoC”) under IBC.

“The mandatory contents of the Resolution Plan are laid down in the CIRP Regulations, 2016. If a Resolution Plan is compliant with the provision of Section 30, sub-section (2) of the IBC and the provisions of the Regulations, 2016, the Plan cannot be faulted on the ground of the promissory estoppel, which the Appellant is pressing against the Resolution Professional, who has admitted the claim.”

Section 7 Petition Seeking ‘Joint’ CIRP Of Separate Corporate Entities Involved In Common Real Estate Project Is Maintainable: NCLAT Delhi

Case title: Mist Avenue Pvt. Ltd. v Nitin Batra & Ors. and connected matters.

Case No.: Company Appeal (AT) (Insolvency) No. 127 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held that a petition under Section 7 of IBC, filed by allottees for joint CIRP of separate corporate entities involved in a common real estate project is maintainable.

Three separate companies were engaged in the development of a real estate project. When the construction of units was not completed within time, the Allottees filed a Section 7 petition under IBC, seeking initiation of joint CIRP against all three companies involved. The NCLAT while upholding the maintainability of such Section 7 petition, has observed as under:

“All the three Appellants being involved with the one single project in which the allottees have been allotted units, all are necessary ingredients of any resolution which may help the allottees to receive their units, in absence of any of the appellants in Corporate Insolvency Resolution Process, Resolution of project and revival of the Resolution of project is impossible………We are in agreement with the view expressed by the Adjudicating Authority that Section 7 Application filed against all the three appellants together is maintainable. The three appellants being part of one Common Real Estate Project and the Applicants of Section 7 Application being part of the said project they had every right to initiate Section 7 Application against all the three appellants together.”

CIRP Under Section 7 Can Commence Even If Claims Of Certain Allottees Are Time Barred Or Below Threshold Of Rs. 1 Crore: NCLAT Delhi

Case title: Mist Avenue Pvt. Ltd. v Nitin Batra & Ors. and connected matters.

Case No.: Company Appeal (AT) (Insolvency) No. 127 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held that in a petition under Section 7 of IBC jointly filed by real estate allottees, the debt of each individual allottee need not meet the minimum threshold of Rs. 1 Crore default or limitation requirements. The CIRP under Section 7 of IBC can commence even if only few Financial Creditors (allottees) fulfill the minimum threshold of Rs. 1 Crore default.

“The provision of Section 7(1) Second Proviso inserted by Act No. 1 of 2020 having been explained by the Hon’ble Supreme Court, the law is well settled that all applicants who have joined the Section 7 Application have not fulfilled the threshold individually nor claim of all the applicants individually has to be within time in event there is default of more than Rs. 1 Crore and default of Rs. 1 Crore on basis of which the application is filed is well within time. The mere fact that claim of some other barred by time is insignificant. Application under Section 7 of the Code triggered when default of Rs. 1 Crore qua some of the applicant or some other financial creditors is fulfilled, Insolvency Resolution Process under Section 7 can commence.”

Requirement Of Minimum 100 Allottees Under Section 7 To Be Met At The Date Of Filing, Subsequent Settlement By Allottees Inconsequential: NCLAT Delhi

Case title: Mist Avenue Pvt. Ltd. v Nitin Batra & Ors. and connected matters.

Case No.: Company Appeal (AT) (Insolvency) No. 127 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held that requirement of minimum 100 allottees to file a petition under Section 7 of IBC is to be met on the date of filing of the petition. If any allottee(s) enter settlement with the Corporate Debtor post filing of the petition, then they are not required to be excluded from the count of 100 allottees.

“In Manish Kumar itself it has been answered that requirement of threshold under proviso in Section 7(1) must be fulfilled as on the date of filing of the Application. The fact that eight allottees have settled the matter is thus inconsequential and eight allottees cannot be excluded in the counting of 100 allottees which are required to be fulfilled as threshold.”

Application For Certified Copy Filed Beyond Limitation, Not Entitled To Exclude Time In Preparation Of Certified Copy: NCLAT

Case Title: Nipan Bansal v Employees Provident Fund Organization

Case No.: Company Appeal (AT) (Insolvency) No. 1454 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that when the application for obtaining certified copy of an NCLT order is submitted beyond the limitation period for filing of appeal (i.e. 30 days), then the Appellant is not entitled to exclude the time consumed in preparation of certified order from the period of limitation for filing of appeal before NCLAT.

“When the application is filed beyond the period of limitation, the Appellant is not entitled to exclude the period during which period certified copy remains under preparation. Thus, the Appellant is not entitled for any exclusion of the period during which copy was under preparation.”

NCLAT Delhi: Refusal To Rehear A Matter After Reserving An Order In A Company Petition Does Not Result In A Miscarriage Of Justice

Case Title: Loramitra Rath Vs JM Financial Asset

Case No.: Company Appeal (AT)(Insolvency) No. 1359 & 1360 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr Arun Baroka (Technical Member), has held that refusal to rehear a matter after reserving an order in a company petition does not result in a miscarriage of justice.

NCLAT Delhi: Scope Of Enquiry By The Adjudicating Authority Under Section 31 Is Confined To Section 30(4) Compliance

Case Title: Sita Chaudhary Vs Haryana Telecom Limited

Case No.: Company Appeal (AT)(Insolvency) No. 727-728 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has dismissed an appeal and held that the scope of enquiry of the National Company Law Tribunal (“NCLT”) as per Section 31 of IBC is confined to scrutinising whether Section 30(4) IBC has been complied with.

The Bench further pointed out that when the Appellant did not challenge the Corporate Insolvency Resolution Process (“CIRP”) and the admission and constitution of the Committee of Creditors (“CoC “) at the right point of time, it cannot ask for rejection of the duly approved resolution plan.

NCLAT Delhi Upholds Initiation Of Insolvency Proceedings Against Birla Tyres Ltd., A B.K. Birla Group Company

Case title: Manav Investment & Trading Company Limited v SRF Limited & Anr.

Case No.: COMPANY APPEAL (AT) (Insolvency) No. 692 of 2022

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Shri Naresh Salecha (Technical Member), has upheld the order whereby the NCLT had initiated Corporate Insolvency Resolution Process (“CIRP”) against Birla Tyres Ltd.

Birla Tyres Ltd. is a part of B.K. Birla Group of Companies. In 1991, it was incorporated as a part of Kesoram Industries Ltd. but was later demerged in 2018 as a part of re-structuring plan. In Financial Year 2021, Birla Tyres had made losses to the tune of Rs 287.63 Crore, while total revenue stood at Rs 153.11 Crore

NCLAT Delhi: Distribution To Secured Creditor Must Be Made As Per Admitted Claim And Not As Per Security Interest Over Assets Of Corporate Debtor

Case Title: ICICI Bank Limited vs BKM Industries Limited

Case No.: Company Appeal (AT) (Insolvency) No.405 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr Arun Baroka (Technical Member), has held that distribution to Secured Creditor must be made as per admitted claim and not as per Security interest over assets of the Corporate Debtor. The Bench observed that a dissenting financial creditor is entitled to the liquidation value of his debt and the distribution among creditors is determined by the commercial wisdom of the Committee of Creditors (“CoC”).

Resolution Plan Providing For Extinguishment Of Personal Guarantees & Securities Of Dissenting Financial Creditors Is Not Violative Of Section 30(2) Of IBC: NCLAT Delhi

Case Title: Puro Naturals JV v Warana Sahakari Bank & Ors.

Case No.: Company Appeal (AT) (Insolvency) Nos.661-663 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held that a resolution plan providing for extinguishment of security interest and personal guarantees of dissenting financial creditors is not violative of Section 30(2) of IBC.

The Bench has approved the Resolution Plan submitted by Puro Naturals JV for Shivaji Cane Processors Limited.

NCLT

E-Auction Can’t Be Set Aside On Trivial Technical Grounds For No Fault Of Successful Bidder: NCLT Hyderabad

Case Title: M/s. Millenium Steel India Pvt. Ltd. v M/s Ind Barath Power Gencom Limited & Ors.

Case No.: CP(IB) No. 187/7/HDB/2019

The National Company Law Tribunal (NCLT), Hyderabad Bench, comprising of Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri Charan Singh (Technical Member), has held that an e-auction of Corporate Debtor’s asset done by Liquidator cannot be set aside on trivial technical grounds, for no fault of the successful bidder. The application for setting e-auction was filed after the distribution of proceeds as per Section 53 of IBC had taken place and the changes in Board of Directors were effectuated.

NCLT Bengaluru Condones Delay Of 1191 Days In Submission Of Proof Of Claim By SEBI Before Liquidator

Case Title: M/s. Edelwiss Assets Reconstruction Co. Ltd. v M/s. Falcon Tyres Ltd.

Case No.: C.P. (IB) No.14/BB/2017

The National Company Law Tribunal (NCLT), Bengaluru Bench, comprising of Shri P. Mohan Raj (Judicial Member) and Shri Manoj Kumar Dubey (Technical Member), has condoned the delay of 1191 days in submission of proof of claim by Securities and Exchange Board of India (“SEBI”) before the Liquidator of Corporate Debtor. The Liquidator has been directed to consider the belated claim since the Liquidation process is ongoing.

NCLT Kolkata: Registration Of Assignment Of Debt Is Not Mandatory For CIRP U/S 7 Of IBC

Case Title: Manavta Tradelink Pvt. Ltd. vs. Manikaran Vincom Pvt. Ltd.

Case No.: Company Petition (IB) No. 80/KB/2023

The National Company Law Tribunal (‘NCLT’) Kolkata Bench comprising Smt. Bidisha Banerjee (Judicial Member) and Shri Arvind Devanathan (Technical Member), has held that the registration of the assignment of debt is not mandatory for the Corporate Insolvency Resolution Process (‘CIRP’) under Section 7 of IBC. Further, the Corporate Debtor cannot go into the question of the legality of the assignment of debt since the assignment of debt was never disputed to date.

Mittal Corp Ltd. To Merge With Subsidiary Of Shyam Metalics & Energy, NCLT Mumbai Approves Resolution Plan

Case Title: Punjab National Bank v Mittal Corp Limited

Case No.: C.P. (IB) No. 434/MB/C-II/2018

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), has approved the Resolution Plan submitted by Shyam Sel and Power Limited (Subsidiary of Shyam Metalics & Energy Ltd.) for Mittal Corp Ltd. The resolution plan is valued at Rs. 351 Crores and provides for merger of the two companies post implementation of plan.

NCLT Delhi Approves Resolution Plan For ENN TEE International Limited

Case Title: ENN TEE International Limited vs Ritu Rastogi, Resolution Professional of ENN TEE International Limited.

Case No.: CP (IBPP) NO.01(PB)/2022

The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Justice Ramalingam Sudhakar (Retd.) (Judicial Member) and Shri Avinash Kumar Srivastava (Technical Member), has approved the Resolution Plan submitted by ENN TEE International Limited through its Promotor. The claims submitted by the Corporate Debtor’s creditors were admitted by the Resolution Professional to the extent of Rs.15.94 Crores. The Resolution Plan of SRA is valued at Rs.17.19 Crores.

NCLT Bengaluru: Issue Of Fixing EMD And Its Reasonableness In EOI, Is A Matter Which Comes Within The Scope Of CoC And Not NCLT

Case Title: Atharv Intertrade Private Limited Versus Mr Shivadutt Bannanje

Case No.: CP (IB) No.9/BB/2022

The National Company Law Tribunal (“NCLT”), Bengaluru Bench, comprising of Justice T Krishna Valli (Retd.) (Judicial Member) and Mr. Manoj Kumar (Technical Member) has held that the issue of fixing Earnest Money Deposit (“EMD”) and its reasonableness in Expression of Interest (“EOI”), is a matter that comes within the scope of the "Commercial Wisdom" of the Committee of Creditors (“CoC”) and is not a concern for the NCLT.

“This issue of fixing of refundable EMD and its reasonableness is a matter which comes within the scope of ‘Commercial Wisdom’ of the CoC. Hence, this Adjudicating Authority is not inclined to interfere with the decision of the CoC”

NCLT Mumbai Approves Liquidation Of TV Products India Private Limited

Case Title: Arsenius Skill Capital vs TV Products India Private Limited

Case No.: CP(IB)No. 2299/MB/C-II/2018

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member) has approved the Liquidation of TV Products India Private Limited.

NCLT Allahabad Allows SBI’s Application For Withdrawal Of Section 7 Petition Against Bajaj Hindustan Sugar

Case Title: State Bank of India vs. Bajaj Hindusthan Sugar Ltd.

Case No.: CP (IB) No.79/ALD/2022

The National Company Law Tribunal (‘NCLT’) Allahabad Bench comprising of Shri Praveen Gupta (Judicial Member) and Shri Ashish Verma (Technical Member), has allowed the State Bank of India’s application for withdrawal of the Section 7 petition filed under IBC against Bajaj Hindusthan Sugar.

Bajaj Hindusthan Sugar Ltd. is one of the largest sugar and ethanol producers in India and holds a significant position within the industry. It operates 14 sugar plants, all strategically situated in the state of Uttar Pradesh.

SBI submitted that the Corporate Debtor during the pendency of the main petition has deposited the overdue amount towards the Term Loan and OCD coupons and has also assured to pay the future overdue with interest as and when the same becomes due and payable.

NCLT Mumbai: Mere Mention Of SARFAESI Proceeding Is Not “Sufficient Cause” For The Condonation Of Delay Under Section 5 Of Limitation Act, 1963

Case Title: State Bank of India Vs. M/s. Ace Agro Industries Pvt. Ltd. & Ors

Case No.: Company Petition No. 3454/2019

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Justice Virendrasingh Bisht (Retd.) (Judicial Member) and Mr. Prabhat Kumar (Technical Member) has rejected an application filed under Section 5 Limitation Act, 1963 (“Limitation Act”) for condonation of delay in filing Section 7 petition under IBC.NCLT observed that the mere initiation of SARFAESI Proceedings wasn't sufficient reason to condone delay in filing a time-barred petition under Section 7 of IBC.

“No reasonable and acceptable explanation for the huge delay is given except mentioning the prosecution of SARFAESI proceeding and the settlement (fact of settlement). No evidence of subsequent proceedings or communication from the Corporate Debtor in any form is placed on record. According to us, applicant has miserably failed to give any acceptable and cogent reason sufficient to condone such huge delay. Simply stating the present is a case of gross negligence and smacks of bonafides.”

NCLT Kochi: Moratorium U/S 96 And 101 Of IBC Cannot Be Meant To Prohibit The Right To Action U/S 7, 9 Or 10 Of IBC

Case Title: Furnace Fabrica (India) Limited vs State Bank of India

Case No.: CP(IBC)/14/KOB/2023

The National Company Law Tribunal (“NCLT”), Kochi Bench, comprising of Justice T Krishna Valli (Retd.) (Judicial Member) and Shri. Shyam Babu Gautam (Technical Member) dismissed a stay application and has held that the moratorium under sections 96 and 101 of IBC cannot be meant to prohibit the right to action under sections 7, 9 or 10 of IBC as it lies against a company or body corporate and not against an individual.

The Bench has further observed that the words ‘in relation to debt’ should be read in harmony with other parts of IBC and due importance should be given to the purpose and terms of a contract of guarantee and loan agreements.

No NCLT Bench To Deny Hearing Through Hybrid Mode Or Video Conferencing; NCLT Issues Circular

Ref. File No.: 25/02/2023-NCLT

The National Company Law Tribunal (“NCLT”) has issued a Circular dated 31.10.2023, directing that no NCLT Bench will deny access to video conferencing facility or hearing through hybrid mode to any Bar Member or Litigant, who is desirous of availing such facility.

The Supreme Court of India vide its order dated 15.09.2023 passed in Sarvesh Mathur v Registrar General High Court of Punjab & Haryana, W.P. (CRL) No. 351/2023, had issued directions regarding hybrid/Video Conferencing mode of hearing in all Courts and Tribunals.

The Circular dated 31.10.2023 has been issued in view of the directions of Supreme Court in the said order dated 15.09.2023.

NCLT Ahmedabad: Application U/S 9 Is Not Maintainable If Operational Creditors Return Principal Amount Paid During The Pendency Of The CIRP Application

Case Title: Shah Paper Mills Ltd v Shree Rama Newsprint & Papers Ltd.

Case No.: C.P. No.251 of 2019

The National Company Law Tribunal (“NCLT”), Ahmedabad Bench, comprising of Mr. Shammi Khan (Judicial Member) and Mr. Kaushalendra Kumar Singh (Technical Member) has held that any application filed under Section 9 of IBC is not maintainable if Operational Creditors returns the principal amount which was paid during proceedings for initiation of Corporate Insolvency Resolution Process (“CIRP”). The Bench further observed that the spirit of legislation of IBC is for ‘resolution of debt’ and not for ‘recovery’.

Operational Creditor Can’t Object To Approval Of Resolution Plan Before NCLT: NCLT Mumbai

Case Title: Ericsson India Pvt Ltd v Reliance Communications Ltd.

Case No.: C.P.(IB) No. 1387/MB/2017

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising of Justice V.G. Bisht (Retd.) (Judicial Member) and Shri Prabhat Kumar (Technical Member), has held that an Operational Creditor whose claim has been admitted by the Resolution Professional, cannot be made a respondent in application for approval of resolution plan pending before the NCLT. Further, the Operational Creditor cannot be allowed to object to the approval of resolution plan. The Bench has imposed a cost of Rs. 50,000/- on the Operational Creditor for making such plea.

“As regards prayer for supply of copy of Resolution Plan Application, it is trite law that the Resolution Plan is a confidential document till it is approved by this Tribunal and only the financial creditors are eligible to receive copy of such plan. There is no doubt on this legal proposition. Further, the applicant being an operational creditor whose claim has been admitted by the Resolution professional cannot be made a Respondent and given opportunity to object to the approval of the plan.”

NCLT Delhi: Section 9 Application Can’t Be Allowed If Corporate Debtor Is Inactive, Due To Default In Filing Statutory Returns

Case Title: R.J. Industries vs United Food Private Limited.

Case No.: IB-643(ND)/2022

The National Company Law Tribunal (“NCLT”), Delhi Bench, comprising of Shri Bachu Venkat Balaram Das (Judicial Member) and Shri Atul Chaturvedi (Technical Member) has held that any application under Section 9 of IBC for initiation of Corporate Insolvency Resolution Process (“CIRP”) cannot be allowed if the Corporate Debtor is inactive, due to default in filing of statutory return for the last two years as per the Ministry of Corporate Affairs (“MCA”) portal.

“It seems that there are no business opportunities left for the Corporate Debtor and the prospect of future business also seems bleak thus there seems no possibility of reviving the Company, if the Corporate Debtor is put in the CIRP for its revival/resolution. Further, this Adjudicating Authority is of the view that initiating CIRP against the Corporate Debtor is not in the interest of its stakeholders, because the Corporate Debtor is inactive. Therefore, without going into the merits of this case, as required under Section 9 of the Code, this Adjudicating Authority dismisses this application, as there is hardly any possibility of any Resolution plan likely to be received if the CIRP is initiated against the Corporate Debtor”

NCLT Delhi: Criteria For Determination Of Limitation Period And Date Of Default With Respect To Debt Are Distinct Questions Of Law And Fact And Cannot Be Evaluated Similarly

Case Title: M/s. DB Power Limited vs M/s Kreate Energy (I) Private Limited.

Case No: COMPANY PETITION NO. (IB)-521/ND/2022

The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Mr. Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Binod Kumar Sinha (Technical Member), has rejected an application and held that as per Sec 10A of IBC no insolvency proceedings can be initiated against the Corporate Debtor for the default which has occurred between the period from 25.03.2020 till 24.03.2021. The Bench further observed that the criteria for deciding the limitation period for a debt and the criteria for determining the date of default for that debt are two distinct questions of law and fact that cannot be evaluated on the same basis.

NCLT Mumbai: 10-Day Demand Notice Period Cannot Be Excluded When Calculating The Limitation Period For Filing A Petition U/S 9 IBC

Case Title: WPIL Limited vs Gammon India Limited

Case No.: C.P. (IB) 3621/MB/2019

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 a petition and held that Insolvency and Bankruptcy Code, 2016 (“IBC”) has no provision that a 10-day period of Demand Notice is liable to be excluded while reckoning the period of limitation for filing the petition under Section 9 of IBC.

ArcelorMittal’s Resolution Plan For Essar Steel, A Creditor Files Recall Application; NCLT Ahmedabad Issues Notice

Case Title: State Bank of India v Essar Steels Ltd

Case No.: CP(IB) 40 of 2017

The National Company Law Tribunal (“NCLT”), Ahmedabad Bench, comprising of Shri Shammi Khan (Judicial Member) and Dr. Velamur G Venkata Chalapathy (Technical Member), has issued notice in an application seeking recall of the order dated 08.03.2019 whereby the resolution plan of ArcelorMittal India Pvt. Ltd. was approved for Essar Steels India Ltd. by the NCLT.

The Applicants are creditors of Essar Steels India Ltd., who have alleged that the plan approval order was obtained by casting fraud upon the NCLT by the Resolution Professional, ArcelorMittal India Pvt. Ltd. and their concerned legal team.

NCLT Ahmedabad Rejects Resolution Plan For Failing To Address Issues Of Cash Flow, Value Of Assets And Statutory Dues

Case Title: Eco Green Products Private Limited v Gajanand Corporation Pvt. Ltd.

Case No.: CP(IB)/70(AHM)2021

The National Company Law Tribunal (“NCLT”), Ahmedabad Bench, comprising of Mrs. Chitra Hankare (Judicial Member) and Dr. Velamur G Venkata Chalapathy (Technical Member), has declined to approve a resolution plan which failed to address the issue of cash flows, value of assets, statutory dues and proposed payment of merely Rs. 1,000/- towards employees’ dues.

“The Resolution Plan does not address the cash flows and value of the Assets enumerated and the Operational Debt claims received from Statutory Authorities. The valuation report (only a summary is submitted) of the assets is not satisfactory. The Resolution Plan presupposes approval and ignores the claim that has been received from the Income Tax Department of dues to be paid. It also proposes to pay only Rs 1000 to employees in 90 days after the approval of the Plan. The Resolution Plan is rejected as it does not satisfy the provisions of Section 31(2) of IBC 2016 and Regulations 36 of the Act of the Code.”

NCLT Mumbai Urges IBBI To Conduct Training Session For Forensic Auditors Regarding Avoidance Transactions Under IBC

Case Title: IDBI Bank Limited v Pawar Electro Systems Pvt. Ltd.

Case No.: C.P.(IB) No. 1587/MB/2019

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising of Justice V.G. Bisht (Retd.) (Judicial Member) and Shri Prabhat Kumar (Technical Member), has urged the Insolvency and Bankruptcy Board of India (“IBBI”) to look into qualitative aspect of Forensic and Transaction Auditor’s Report and to conduct training session for concerned Auditors on provisions relating to Avoidance Transactions under IBC.

“The IBBI may look into the qualitative aspect of Forensic and Transaction Auditor’s Report and may consider to hold one training session so as to equip them with the basic nuances of provisions relation to Avoidance Transactions contained in the Code and the expectation of the stake-holders from them in this regard.”

The Bench while dismissing an avoidance application under Section 43 of IBC, has deprecated the casual approach of Resolution Professional and Forensic Auditor in dealing with such an important part of CIRP.

Liquidator Can’t Reject A Rectified Claim For Being Time Barred: NCLT Mumbai

Case Title: IDBI Bank Limited v EPC Constructions India Limited

Case No.: CP (IB) No. 1832/MB/C-II/2017

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), has held that when a creditor submits a claim before Liquidator within stipulated timeline though not in proper Form, then the Liquidator cannot reject such creditor’s claim on the premise that rectified claim was submitted after due date. The re-submission of rectified claim is a mere technical formality.

NCLT Mumbai: Base Resolution Plan, An Attempt To Circumvent SEBI Takeover Regulation, Can’t Be Approved Under Section 54C Of IBC

Case Title: Garodia Chemicals Limited

Case No.: CP(IBPP) NO. 02 OF 2023

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of (Retd.) Justice Virendra Singh G Bisht (Judicial Member) and Shri Prabhat Kumar (Technical Member), has dismissed a petition under held that a Base Resolution Plan which attempts to circumvent SEBI Takeover Regulations, in respect of the acquisition of a shareholding in a listed entity beyond the specified threshold limit, cannot be approved even under Sec. 54C of IBC for initiation of Pre-Packed Insolvency Resolution Process.

Fixation Of Reserve Price For Auction Being Commercial Decision Of Stakeholders Consultation Committee, NCLT Can’t Sit In Appeal; NCLT Kolkata

Case Title: Sauria Corporation v Kohinoor Pulp & Paper Private Limited

Case No.: C.P (I.B) 511/KB/2018

The National Company Law Tribunal (NCLT), Kolkata Bench, comprising of Shri Rohit Kapoor (Judicial Member) and Shri Balraj Joshi (Technical Member), has held that fixation of reserve price for auction is a commercial decision of Stakeholders Consultation Committee (SCC) and the NCLT would not sit in appeal over such decision.

“We are of the considered opinion, this is a commercial decision of the Stakeholders Consultation Committee (SCC) arrived at after due deliberations. Applicant has stated that he engaged two valuators to determine the value of these assets. This Adjudicating Authority is not expected to sit in appeal over it. We are also of the view, it is the SCC who are in a position to reasonably assess the value of the assets.”

The Liquidator and the Stakeholders Consultation Committee differed on the amount of reserve price fixed for auction of Corporate Debtor’s plant and machinery. The NCLT directed the Liquidator to opt for the reserve price fixed by the Stakeholders Consultation Committee.

NCLT Ahmedabad Directs Promoters To Deposit Rs. 7.78 Crores With Corporate Debtor Based On Forensic Audit Report

Case Title: State Bank of India & Ors. v Sidharth Bharatbhushan Jain & Ors.

Case No.: CP(IB) 62 of 2021

The National Company Law Tribunal (“NCLT”), Ahmedabad Bench, comprising of Shri Shammi Khan (Judicial Member) and Shri Sameer Kakar (Technical Member), has directed the Promoters/Suspended Management of Sysco Industries Ltd. (Corporate Debtor) to deposit Rs. 7.78 Crores with the Corporate Debtor on the basis of a forensic audit report. The Resolution Plan for the Corporate Debtor was approved by NCLT in 2022. Further, the amount of Rs. 7.78 Crores is to be distributed to the erstwhile CoC members in their respective share.

The Resolution Professional had filed an application under Section 43 of IBC based on a forensic audit report, seeking reversal of amounts to the Corporate Debtor, in view of preferential transactions undertaken by the Promoters/Suspended Management with a related party.

Failure of Liquidator To Comply With Regulation 45 Of Liquidation Regulations, NCLT Kolkata Rejects Application For Dissolution, Recommends Investigation Against Liquidator

Case Title: Religare Finvest Ltd. v Venkateshwara Capital Management Ltd.

Case No.: C.P.(I.B.) No. 1096/KB/2018

The National Company Law Tribunal (NCLT), Kolkata Bench, comprising of Ms. Bidisha Banerjee (Judicial Member) and Shri Balraj Joshi (Technical Member), has rejected an application for dissolution of Corporate Debtor since the Liquidator failed to comply with requirements under Regulation 45 of IBBI (Liquidation Process) Regulations 2016. The Bench has further recommended IBBI to conduct an investigation on the conduct of the Liquidator.

NCLT Delhi: Application U/s 7 IBC Cannot Be Initiated Against A Struck-off Company; NCLT cant Suo Motu Restore The Name

Case Title: Mr. Satyabrata Mitra & Ors. Vs Earth Towne Infrastructure Pvt Ltd

Case No: IB/196/ND/2023

The National Company Law Tribunal (“NCLT”), Delhi Bench, comprising Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr Binod Kumar Sinha (Technical Member), has held that proceedings under Section 7 of IBC cannot be initiated against a company struck off by Registrar of Company (“RoC”) and the power to restore the name of such a company under section 252 of Companies Act, 2013 is not a Suo motu power of NCLT.

NCLT Bangalore: BCCI Files Petition U/S 9 IBC Against Byju’s Over Unpaid Dues

Case Title: The Board and Control for Cricket in India Vs Think & Learn Pvt ltd

Case No.: CP(IB) No. 149/BB/2023

The Board of Control and Cricket in India (“BCCI”) has moved to the National Company Law Tribunal (“NCLT”), Bengaluru Bench, against edtech major Byju’s over pending dues related to the sponsorship of the Indian cricket team’s jerseys. A petition has been filed under Section 9 of IBC against the parent company of Byju’s i.e., Think & Learn Pvt Ltd. The case was initially filed on 8^th September 2023 and was registered on November 15 2023. BCCI has been represented by Argus Partners. The next hearing is scheduled for December 22 2023 and is to be heard by Justice K Biswal and Shri Manoj Dubey.

Byju's had earlier signed three large branding partnerships with BCCI, the International Cricket Council (“ICC”), and Federation Internationale de Football Association (“FIFA”). It took over the sponsorship of the Indian cricket team in 2019 from OPPO until the end of March 2022.

Following this, BYJU’s requested an extension of the sponsorship until the end of 2023, reportedly for a total of $55 million. However, in December 2022, BYJU’S abruptly terminated its jersey sponsorship deal with the BCCI due to financial troubles amidst the challenging funding environment in the Indian startup ecosystem

HIGH COURT

Insolvency & Bankruptcy Code: Section 14 Does Not Bar Finalization Of Assessment, Adjudication Proceedings: Kerala High Court

Case Title: Platino Classic Motors India Pvt. Ltd. v. Deputy Commissioner of Central Tax and Central Excise & Ors.

Citation: 2023 LiveLaw (Ker) 656

The Kerala High Court bench comprising Justice Dinesh Kumar Singh has laid down that assessment orders could not be set aside on the ground of the Official Liquidator not having been heard while finalizing the assessment, since Section 14 of IBC does not bar finalisation of the assessment and adjudication proceedings in respect of the taxes.

"On the resolution once the reference has been admitted, there is moratorium for recovery of the tax dues but, there is no bar for finalisation of the assessment and adjudication”.

IBC | Mere Uploading Of Application U/S 96 Cannot Be Regarded As 'Filing' For Interim Moratorium To Operate: Kerala High Court

Case Title: Jeny Thankachan v. Union of India & Ors.

Citation: 2023 LiveLaw (Ker) 665

The Kerala High Court bench comprising Justice N. Nagaresh, has laid down that mere uploading of an application under Section 96 of the Insolvency and Bankruptcy Code, 2016 (IBC), cannot be regarded as filing of an application for the interim moratorium to operate.

Section 96 of IBC provides that when an application is filed under Section 94, an interim moratorium shall commence on the date of the application in respect to all the debts and shall cease to have effect on the date of admission of such application.

The Bench explained that the operation of interim and final moratorium under Sections 96 and 101 of the IBC have serious repercussions, as the legal proceedings against would be deemed to have been stayed and creditors of the debtor would not be able to initiate any legal action proceeding in respect of any debt of the debtor, once an application is filed. The Bench thus said that such provision would have to be strictly construed.

No Recovery Towards TAS Can Be Made Towards Deductee Even If Deductor Is Undergoing CIRP: Delhi High Court

Case Title: BDR Finvest Pvt. Ltd. Versus DCIT

Case No.: W.P.(C) 9043/2021 & CM No.55881/2023

The Delhi High Court has held that no recovery towards Tax at Source (TAS) can be made towards the deductee even if the deductor is undergoing the Corporate Insolvency Resolution Process (CIRP).

The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that the deductee (petitioner) followed the regime framed in the Act for collecting TAS through an agent (Ninex) of the government, i.e., the deductor. It was the agent who was required to deposit the tax with the government. The agent is undergoing CIRP; therefore, possibly, the ability of the Central Government to recover the amount from the agent may seem remote.

Gujarat High Court: Protection Granted U/S 32A(2) & 33(5) Of IBC Overrides The Power Of Enforcement Directorate To Attach The Properties Under PMLA

Case Title: AM Mining India Private Limited vs Union of India

Case No.: R/SPECIAL CIVIL APPLICATION NO. 808 of 2023

The Gujarat High Court bench comprising Justice Vaibhavi D. Nanavati, has held that the protection granted under Section32A(2) and Section 33(5) of the Insolvency and Bankruptcy Code, 2016 (“IBC”) would override the power of Enforcement Directorate to attach the properties under Section 5 of the Prevention of Money Laundering Act, 2002 (“PMLA”).

The Bench opined that the Enforcement Directorate has proceeded to confirm the order of provisional attachment passed under Section 5(1) of PMLA without any application of mind.

“In the opinion of this Court, confirmation of attachment interdicts and interferes with the consummation of the sale process which is part of liquidation of ABG Shipyard in the opinion of this Court, is in teeth of the provisions of Sections 32A, 33(5) and 238 of the IBC”