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2020 (6) TMI 755 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - financial debt - default or not - application was brought before the Adjudicating Authority at the instance of Vishnu Dutt Gupta, the Appeal claims that Vishnu Dutt Gupta was not authorized and the list of dates states that Vishnu Dutt Gupta was removed as MD from the Board on 6th February, 2019 - HELD THAT:- The fact remains that Vishnu Dutt Gupta still appears to be Director of the Corporate Debtor and the Adjudicating Authority, accepted the material pointed out by the said Director, which was found to be relevant. We do not intend to interfere. The Appellants may deny that they were not signatories to the Subordination Agreement but in the face of Affidavit of the Officer of Canara Bank and Subordination Agreement pointed out by the Officer, it can be said that the Appellants cannot maintain the Application under Section 7. The Adjudicating Authority need not settle and decide the claim of the Appellants denying the signatures in the Subordination Agreement of 2014. That is not necessary for the Adjudicating Authority to decide in proceeding under Section 7 of IBC. Considering the documents executed in favour of Canara Bank in ordinary course of business which is admitted by Ajay Kumar Agarwal, it must be said that the Appellants failed to establish that the loan extended by them is payable and hence there is “default”. In the absence of settling dues of Canara Bank, Appellants cannot claim that their dues have become payable, and thus there is “default”.
The Adjudicating Authority has after considering the record, found that there was material in the form of MOU dated 29.04.2007 and Agreement dated 8th February, 2012 which dealt with interest free unsecured loan and equity shares to be allotted to both the parties and concluded that there was no time value of money and that it was not financial debt. Keeping in view the relationships between the parties and record, we find no reason to interfere with such findings recorded by the Adjudicating Authority.
There are no substance in the Appeal - appeal dismissed.
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2020 (6) TMI 754 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Delay of 10 days in filing the Resolution Plan application - Section 31 of the ‘Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Admittedly, the ‘resolution plan’ of Mr. Surender Kumar Chawla has been approved by the ‘Committee of Creditors’ within the extended timelines duly allowed by this Appellate Tribunal and the process of the approval of the ‘resolution plan’ of Mr. Surender Kumar Chawla by the ‘Committee of Creditors’ was completed within the extended period as allowed by this Appellate Tribunal - However, since only one day was left for the ‘Resolution Professional’ to file an application under Section 31 of the ‘I&B Code’ for placing the approved ‘resolution plan’ before the Adjudicating Authority for approval which despite diligence and best efforts on his part was improbable as he was left only with one day to complete all legal formalities including seeking performance guarantee in terms of the approved ‘resolution plan’, further extension of time by 10 days enabling the ‘Resolution Professional’ to seek approval of the ‘resolution plan’ from the Adjudicating Authority is warranted.
This is a fit case for exercising the jurisdiction by this Appellate Tribunal being an exceptional case to depart from the general rule of 330 days being outer limit prescribed under the law for completion of the ‘corporate insolvency resolution process’ inclusive of period of judicial intervention - Refusal to exercise discretion by the Adjudicating Authority, has resulted in miscarriage of justice and frustrating the object of the ‘I&B Code’ - Appeal allowed.
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2020 (6) TMI 753 - KERALA HIGH COURT
Unaccompanied baggage - main legal contention set up by the petitioners was that though sanction was obtained under Section 19 of the Prevention of Corruption Act, the prosecuting agency did not comply with the procedure under section 155 of the Customs Act - HELD THAT:- In COSTAO FERNANDES VERSUS STATE AT THE INSTANCE OF DSP., CBI, BOMBAY [1996 (2) TMI 137 - SUPREME COURT], a customs officer faced prosecution for offence under section 302 IPC for killing a smuggler by shooting with official revolver, who had attempted to flee with smuggled gold, while being intercepted by the above customs officer. The defence set up was that he was entitled for protection under section 155 of the Customs Act. Holding that Section 155 has nexus with the official duty of the petitioner and analysing the conduct of the petitioner in the background of section 106 of the Customs Act, it was held that facts disclosed that the petitioner caused the death of the smuggler while discharging his official duties. Hon'ble Supreme Court held that the petitioner was entitled for protection under section 155 and consequently the proceeding was quashed.
In an identical situation, the learned Single Judge of Delhi High court in ATUL DIKSHIT VERSUS C.B.I. [2017 (1) TMI 1308 - DELHI HIGH COURT] and another judge of Rajasthan High Court in RAVINDRA KUMAR S/O SH. RAMESHWAR LAL VERSUS UNION OF INDIA [2016 (11) TMI 468 - RAJASTHAN HIGH COURT] took views contrary to the views of Calcutta High Court and Punjab and Haryana High Court discussed above. In both the above cases, respective accused challenged the prosecution alleging breach of section 155 (2) of the Customs Act -
it was noticed by the learned single judge that section 40 of the Central Excise Act 1944 had undergone drastic amendment in 1973. It was noticed that though section 40 (2) of the Excise Act after amendment of 1973, was in pari materia with section 155 (2) of the Customs Act, S. 40(2), prior to amendment, it was not. However, Supreme Court proceeded as if both were in pari materia. It was held that sub section (2) of Section 40 of Central Excise and Salt Act, 1944 which existed prior to 1973 was not at all in pari materia with section 155(2) of the Customs Act, 1962. The learned Single Judge proceeded to hold that the words "no proceeding" appearing on sub section (2) of section 155 of the Customs Act do not include criminal prosecution as for the protection pertaining to prosecution, there was a specific provision under sub section (1) of section 155 of the Customs Act.
Section 155 (1) uses the words "suit, prosecution or other legal proceedings". Evidently each word is expressed independently and each is used to express one in contra distinction with another. Clearly, when the above expressions are used to denote three separate category of proceedings and when statute has explicitly used "prosecution" or "other legal proceedings" separately to denote separate proceedings, it is evident that Parliament was conscious that the term " other legal proceedings" does not include a prosecution under the Criminal Law.
The contention of the learned counsel for the petitioners that the prosecution of the petitioners is bad for non compliance of section 155 (2) of Customs Act is not sustainable and is rejected - Application dismissed.
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2020 (6) TMI 752 - CESTAT CHENNAI
Job-Work - Exemption to specified items if manufactured in a factory as a job work and used in the manufacture of final products - appellant receive cones from the principal manufacturers and after processing, return the same to them - applicability of N/N. 214/1986-C.E., dated 25-3-1986 or Rule 4(5) of CCR, 2004.
Whether the appellant has operated under Notification No. 214/1986-C.E., dated 25-3-1986 as asserted by the assessee or not operated under it, as asserted by the department? - HELD THAT:- There is no scope for discharging Excise duty on the “value addition” component of the goods only under this notification. It is not open for the appellant to pick and chose parts of the notification or modify it to suit their business model - It has been held by the Constitutional Bench of Hon’ble Apex Court in the case of COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY & ORS. [2018 (7) TMI 1826 - SUPREME COURT] that an exemption notification must be strictly interpreted and the benefit of doubt will go against the assessee. So, there is no scope for the Notification to be read as “exempted from duty except the value addition”, when the notification “exempts from the whole of duty”.
From the facts recorded in the impugned orders, it cannot be concluded whether the assessee appellant has operated under the Notification No. 214/1986-C.E., dated 25-3-1986 or otherwise. The assessee appellant also claimed that they have operated under Rule 4(5) of CCR, 2004. It is not clear as to whether this rule was used for some other consignments. If the assessee’s claim is that they have operated both under Notification No. 214/1986-C.E., dated 25-3-1986 and also under Rule 4(5) of CCR, 2004, it is not clear the provision under which they could have done so - The taxable event is the critical factor while determining whether a tax is leviable or otherwise. The taxable event in the case of Excise duty is the manufacture, in case of sales tax, it is the act of selling, in case of Customs it is the act of import or export, in case of Income Tax, it is the act of earning income, etc. There is no tax with “value addition” as the taxable event. There is indeed value addition in the economy at various stages but no Excise duty is leviable on it and Excise duty is leviable only on the manufacture.
Measure of Tax - HELD THAT:- The measure of tax in case of Excise duty is determined by Section 4 of the Central Excise Act, Central Excise Valuation Rules, 2000 and the Central Excise Tariff. We find that neither Section 4 nor the Central Excise Valuation Rules have any provision under which Excise duty can be levied on the manufacturer only to the extent of his “value addition” - there are no basis for such a scheme of operation by the assessee appellant.
These are fit cases to be remanded to the original authority to verify from records whether the appellant has operated under Notification No. 214/1986-C.E., dated 25-3-1986 or under Rule 4(5)(a) of CCR, 2004 or otherwise. If they claimed the benefit of Notification No. 214/1986-C.E., dated 25-3-1986 and fulfilled all the conditions required therein, there is no question of any Excise duty being leviable upon the appellant. Therefore, any amount paid by them claiming to be Excise duty is definitely not so. Similarly, if they are operated under Rule 4(5)(a) of CCR, 2004, appropriate provisions would apply. If the appellant has not operated under Notification No. 214/1986-C.E., dated 25-3-1986, they are required to pay Excise duty as applicable to any job worker.
Appeal allowed by way of remand.
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2020 (6) TMI 751 - ITAT MUMBAI
Accrual of interest - CIT(A) held that interest of assessee has accrued for F.Y. 2008-09 and not 2007-08 - as per DR assessee had paid to its sister’s concern to buy lands on behalf of assessee and made a huge payment of advance - HELD THAT:- From the records we notice that it was submitted before CIT(A) that the funds were arranged by TATA sons and no interest bearing funds were utlilized to advance. In order to facilitate the transfer of lands from Unitec Group to the assessee, it was agreed to conduct due diligence and accordingly MOU was entered. We notice that AO observed that these funds were utilized to acquire the UAS License and it is only make to believe transaction. We do not agree with the AO that how the funds were utilized by Unitec group is irrelevant and what is relevant is, whether Unitec held the lands as per MOU on the date of transaction and whether due diligence activities were carried on or not. In the records, we found that there is evidence of existence of above said conditions and no contrary evidence was brought on record by revenue. In our view, the transaction entered by the assessee seems to be genuine and within the business dealings. It is also relevant to note that as soon as the period given for carrying out due diligence over, Assessee modified the MOU entered and accordingly purchased only those lands which are as per agreement terms and for the balance advanced amount claimed interest @18.5%.
AO has calculated the interest from the date of entering the agreement (MOU) and date of payment on 10.10.2007. But, it is natural for the assessee to allow time to the other party to carry out due diligence as per terms of MOU. It is between the parties to decide, how much time to allow in the execution of contract. Therefore, assessee has given time up to 05.04.2008. Beyond that, assessee has claimed penal interest and declared the same in its financial statement in the subsequent assessment year. In our view, the action of the assessee in this transaction is within the business acceptable practices. Therefore, we are inclined to accept the findings of Ld. CIT(A). - Decided against revenue.
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2020 (6) TMI 750 - NATIONAL COMPANY LAW TRIBUNAL — BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - HELD THAT:- The primary conditions require to be fulfilled to file an application filed under section 9 of the Code, are that claim in question, there should be proper notice under the provisions of the Code on the other side ; debt should be prima facie established and it should not be in dispute - In the instant case, it is not in dispute that the demand notice dated November 18, 2019 issued by the petitioner, which was stated to have received by the respondent on December 6, 2019 was replied by the respondent vide its reply dated December 9, 2019 by bringing to the notice of the petitioner about the defective notice as well as pendency of the arbitration application as stated supra. The demand notice was issued on November 18, 2019 by the petitioner by, inter alia, stating that "if the respondent dispute the existence or amount of unpaid operational debt of ₹ 8,44,49,943 provide the undersigned within ten days of the receipt of this letter, of the pending of the suit or arbitration proceedings in relation to such dispute filed before the receipt of this letter notice".
The instant company petition was filed before expiry of 10 days' time from the date of the receipt of the copy of the demand notice. Therefore, the petitioner without giving any sufficient opportunity to the respondent has rushed to this Adjudicating Authority by filing the instant application by not disclosing the material facts of the case. The petitioner is supposed to advert to the arbitration application filed by the respondent.
The instant company petition is filed with an intention to recover the disputed outstanding amount in question, which is not permissible under law - instant petition is disposed off by granting liberty to the parties to prosecute arbitration application, which is already pending, and to take next course of legal action, after arbitration. proceedings concluded
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2020 (6) TMI 749 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Compliance with the direction to effect paper publication in vernacular in "Malai Chudar" vide Order dated 08.06.2020 - HELD THAT:- For publication of advertisement when approached the office of "Malai Chudar" seems to be closed and hence the Petitioner is not in a position to comply with the Order dated 08.06.2020. In the circumstances, the applicants seeks for an alternative in relation to effect the publication before the date of hearing on 09.07.2020 in vernacular i.e., "Dinamani" Tamil Nadu edition instead of "Malai Chudar".
The Application stands allowed and the Petitioner Companies are directed to effect paper publication in vernacular "Dinamani" Tamil Nadu edition as sought for in the Application instead of "Malai Chudar' as originally ordered - Application allowed.
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2020 (6) TMI 748 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Joint petition for admission and for fixing a date of hearing of the main Company Petition as well as for a direction in relation to publication in press to be effected and notices to be issued - HELD THAT:- The date of hearing of the Petition filed by the Petitioners for the sanction of the Scheme is fixed on 9th July 2020 - Notice of the hearing shall be advertised in the newspapers viz., the "Business Standard" (English, Chennai edition) and "Maalai Chudar" (Tamil, Chennai edition) not less than 10 days before the aforesaid date fixed for hearing.
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2020 (6) TMI 747 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI
Maintainability of application - initiation of CIRP - Corporate Debtor had failed to redeem the Optionally Convertible Redeemable Preference Shares (OCRPS) on or before 15.04.2019 in terms of the Share Subscription and Shareholders Agreement (SSSA) - existence of debt and dispute or not - HELD THAT:- It is settled law that generalia specialibus non derogant – special law prevails over general law.
In HINDUSTAN PETROLEUM CORPN. LTD. VERSUS PINKCITY MIDWAY PETROLEUMS [2003 (7) TMI 493 - SUPREME COURT] the Hon’ble Supreme Court held that where an arbitration clause exists, the court has a mandatory duty to refer dispute arising between the contracting parties to arbitrator. It quoted with approval the decision of the same court in P. ANAND GAJAPATHI RAJU & ORS. VERSUS PVG. RAJU (DIED) & ORS. [2000 (3) TMI 1068 - SUPREME COURT] wherein it was held that the language of section 8 of the Arbitration & Conciliation Act, 1996, is peremptory and the court is under an obligation to refer parties to arbitration.
In a section 7 petition, there has to be a judicial determination by the Adjudicating Authority as to whether there has been a ‘default’ within the meaning of section 3(12) of the IBC - In the present case, the dispute centres around three things – (1) The valuation of the Respondent/Financial Creditor’s OCRPS; (2) The right of the Respondent/Financial Creditor to redeem such OCRPS when it had participated in the process to convert its OCRPS into equity shares of the Applicant/Corporate Debtor; and (3) Fixing of the QIPO date. All of these things are important determinants in coming to a judicial conclusion that a default has occurred. The invocation of arbitration in a case like this seems to be justified.
The default has not occurred. It is noted that Mr Mustafa Doctor’s statements that the Applicant/Corporate Debtor is a solvent, debt-free and profitable company. It will unnecessarily push an otherwise solvent, debt-free company into insolvency, which is not a very desirable result at this stage. The disputes that form the subject matter of the underlying Company Petition, viz., valuation of shares, calculation and conversion formula and fixing of QIPO date are all arbitrable, since they involve valuation of the shares and fixing of the QIPO date. Therefore, an attempt must be made to reconcile the differences between the parties and their respective perceptions. Also, no meaningful purpose will be served by pushing the Applicant/Corporate Debtor into CIRP at this stage.
Application allowed.
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2020 (6) TMI 746 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Permission for withdrawal of appeal - Constitution of Committee of Creditors - legally permissible exit route for the ‘Corporate Debtor’ to come out from the rigour of ‘corporate insolvency resolution process’ - HELD THAT:- Appeal disposed off giving liberty to the ‘Corporate Debtor’ to approach the ‘Committee of Creditors’ through ‘Interim Resolution Professional’ for permitting the ‘Operational Creditor’ to withdraw the application in view of settlement stated to have been arrived at, inter-se, the ‘Operational Creditor’ and the ‘Corporate Debtor’.
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2020 (6) TMI 745 - ITAT CHANDIGARH
Income from other sources - addition made of share premium received by the assessee u/s 56(2)(viib) on account of the same being excess consideration received over and above the Fair Market Value of shares issued - HELD THAT:- As on the issue or allotment of shares by a company when consideration arises, all deposits or share application money received earlier take the colour of consideration and this conversion is to be treated as receipt of consideration on the issue of shares. It is at this point that all the conditions of section 56(2)(viib) can be said to be fulfilled so as to invoke the same. Thus the trigger for invoking section 56(2)(viib) of the Act is the issue of shares.
As evident from the explanation(a) to Section 56(2)(viib) , which explains the term Fair Market Value, for determining the excess consideration received over and above it, which is subjected to tax under the section. The explanation states the FMV of the shares to be the value determined as per method prescribed(sub clause(i) or the value substantiated by the company to the satisfaction of the AO based on the value on the date of “ issue o f s ha r e s” of its assets including intangible assets, goodwill, know-how, patent, copy right, trade mark, franchise or other business or commercial rights of similar nature.
Thus as per clause (ii) of the explanation to the section, the FMV of the shares, is the value on the date of issue of shares. Therefore the section can be triggered or invoked only in the year of issue of shares .
The Rules prescribed for determining the Fair Market Value of the shares also makes sense and are workable only on applying this interpretation .The Rules prescribed are Rule 11U and 11UA ,both of which are reproduced above. Rule 11UA(2) specifically deals with the valuation of fair market value of unquoted shares for the purposes of section 56(2)(viib) of the Act, which is relevant for the present case. The said Rule speaks of the Fair Market Value of the shares as being the value determined in the manner prescribed therein on the valuation date (emphasis supplied by us). Valuation date in turn has been defined in Rule 11U(j) as the date on which the consideration is received.
A comparison of the fair market value of shares and the consideration received, both relating to the issue of shares is made and the surplus if any is subjected to tax. This is a reasonably sound and logical interpretation since the section, subjects to tax the excess consideration received by over pricing the value of shares issued. Overpricing or excess consideration can be determined when the actual price and the market price relating to issue of shares is compared. If the trigger for the invocation of the section is in the year of receipt of amounts relating to shares prior to their being issued, the excess consideration received above the FMV of shares cannot be determined because, since the shares have not been issued, there cannot be FMV of anything which is not even in existence.
We, therefore, agree with the contention of the ld. DR that the provisions of Section 56(2)(viib) are triggered in the year the shares are issued.
Arguments of assessee are all based on laying emphasis solely on the word” received” used in the section ,which hold no ground since as we have held above the words used in the section are not to be read in isolation and the correct interpretation lies in the meaning of the phrase “consideration received on is sue of shares”, which we have held relates to the year of issue of shares and not before.
Thus, reading the provisions of the Section and the Rules prescribed for determining the Fair Market Value of shares, what is arrived is that the provisions of Section 56(2)(viib) are triggered in the year of issue/allotment of shares.
In the present case, since the shares were issued in the impugned year, the provisions of Section, we hold, have been rightly applied by the AO in the impugned year and the order of the AO to that extent is upheld. Appeal of the Revenue is allowed.
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2020 (6) TMI 744 - PUNJAB AND HARYANA HIGH COURT
Grant of Bail - passing of Input Tax Credit (ITC) by issuing sale bills to various parties without supply of goods - Section 132 of the GGST Act, 2017 - HELD THAT:- Notice of motion for 30.07.2020.
The interim bail already granted due to COVID-19 Pandemic till 11.07.2020 shall stand extended till further orders.
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2020 (6) TMI 743 - MADHYA PRADESH HIGH COURT
Territorial Jurisdiction - Seeking grant of transit bail - protection of individual with an anticipatory bail of limited duration so as to enable him to approach the appropriate court vested with territorial jurisdiction to pass a regular order under section 438 or 439 Cr.P.C. - HELD THAT:- The Covid pandemic has taught us that much can be done effectively without physical movement and personal interaction. The advances in Information and Communication Technology has ensured that contacting a lawyer in another States is no longer a harrowing experience. Bar Associations in most States and even the districts, have directories listing the names of lawyers and websites of lawyers, also disclose their proficiencies. This too, only in a situation where it is not possible to get the reference of a lawyer through word of mouth.
This Court is of the firm opinion, that the practice of entertaining applications for “Transit Bail” is passé. It was a procedure having no statutory sanction, yet justifiable in a bygone era when poor logistics, transportation and dismal communication saw persons being arrested by the police of another State even before such a person could move the Sessions Court or the High Court having territorial jurisdiction to entertain his application for anticipatory bail. It is no longer so. The practice of “Transit Bail” by which the High Court or the Sessions Court could pass an order of anticipatory bail for a limited duration to enable the person to approach the appropriate court to seek an proper order of anticipatory bail or bail, has ceased to have any utility in the present day India.
The Applicant herein can effectively pursue his remedy by moving an application before the appropriate Court in the State of Rajasthan from the comfort of his home in Jabalpur requiring nothing more than a rectangular device called a ‘Smart Phone’ - application is not maintainable before this Court and is dismissed.
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2020 (6) TMI 742 - SECURITIES APPELLATE TRIBUNAL MUMBAI
Ex-parte order passed by the Whole Time Member (“WTM‟) of Securities and Exchange Board of India (“SEBI‟) - direction to deposit a sum plus interest till date in an Escrow Account towards notional loss - Using unpublished price sensitive information - Direction that the bank accounts / demat accounts of the appellant shall remain frozen till such time the amount is not deposited - HELD THAT:- There is no finding that the appellant will remove the property or will dispose of all the property or that he would obstruct the proceedings or that he would delay the proceedings pursuant to the show cause notice. In the absence of any such finding, the ex-parte interim order cannot be sustained especially when the trades were of 2016 and from 2016 till the date of the impugned order there is no evidence to show that the appellant was trying to divert the alleged notional gain/loss
As held in North End Foods Marketing Pvt. Ltd. [2019 (4) TMI 800 - SECURITIES APPELLATE TRIBUNAL, MUMBAI] there is no real urgency in the matter to pass an ex-parte interim order especially during the pandemic period. There is no doubt that SEBI has the power to pass an interim order and that in extreme urgent cases SEBI can pass an ex-parte interim order but such powers can only be exercised sparingly and only in extreme urgent matters. In the instant case, we do not find any case of extreme urgency which warranted the respondent to pass an ex-parte interim order only on arriving at the prima-facie case that the appellant was an insider as defined in the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations‟ for short) without considering the balance of convenience or irreparable injury.
The impugned order cannot be sustained and the same is quashed at the admission stage itself without calling for a counter affidavit except the show cause notice. The appeal is allowed. We further direct that the appellant to file a reply to the show cause notice within four weeks from today. The respondent will decide the matter finally after giving an opportunity of hearing to the appellant either through physical hearing or through video conference within six months thereafter. During the interim period, in order to safeguard the interests of the respondent and more particularly the interest of the investors in the securities market and also to protect the integrity of the securities market, we direct the appellant to give an undertaking to the respondent within four weeks from today that he will not alienate 50% of his total shareholdings of the company DTL held as on date, as stated by the learned counsel for the appellant.
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2020 (6) TMI 741 - AUTHORITY FOR ADVANCE RULING - UTTAR PRADESH
Classification of goods - Debark/Bark Eucalyptus wood waste, debark/Bark Suabool wood waste, Debark/Bark poplar wood waste (lenght about 2 meter and its girth between 15 to 60 centimeter) to be supplied to paper mills for pulping only - HELD THAT:- These goods will not come under wood waste and scrap - Wood waste and scrap would get covered under N/N. 1/2017-Central Tax (Rate) dated 28-06-2017 with KA.NI.-2-836/XI-9(47)/17-U.P Act-1-2017-order-(06)-2017 dated 30-06-2017 vide schedule I, numbered 198 and will be taxable at 5%.
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2020 (6) TMI 740 - NATIONAL COMPANY LAW TRIBUNAL BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Corporate Debtor seeking additional time for repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The Corporate Debtor, has admitted its liability to repay the debt amount and is willing to pay the same. However, it sought for additional time for clearing the financial dues of the Petitioner.
On a perusal of records, there is no doubt that there is an admitted debt and a default as per the agreed terms between the two parties. The Petitioner admits that the Debtor has repaid an amount of ₹ 25 lakh against ICD 1 and that the same was renewed on 14.04.2018 for the balance amount. Thus part of the debt had been repaid, but default occurred towards principal and interest on different dates. As per the Petition, debt of ₹ 1,44,32,054.80 remains unpaid against both the ICDs. The Corporate Debtor has given an undertaking that it has made arrangements for paying the debt and only requires some more time to settle the debt.
Also, the impact of the present financial distress caused by the global novel corona virus pandemic necessitating a nationwide lockdown, cannot be ignored. Modifications and suspension of various provisions of the Code have been initiated so that companies facing financial stress due to the pandemic can be supported rather than be pushed into CIRP, else in the present scenario they may end up in liquidation and lose value further, which is the not objective of the IBC or other enactments. Steps have also been taken to ensure availability of more funds in the hands of businesses so that they can cope with the present economic scenario and restart their business.
The Corporate Debtor's plea that it be given some more time to repay the debt needs to be accepted, and the Respondent/Corporate Debtor be directed to settle the debt at the earliest in consultation with the Petitioner/Financial Creditor. The Ld. Counsel for the Petitioner has insisted that the Corporate Debtor may be directed to clear the debt within 10 days. However, considering the amount involved and the present economic scenario, it would be fair to allow the Corporate Debtor some more time.
Petition is disposed of by directing the Respondent to repay the balance debt or the amount as settled with the Petitioner, within a period of 90 days, failing which the Petitioner would be at liberty to file a fresh petition before this Tribunal.
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2020 (6) TMI 739 - NATIONAL COMPANY LAW TRIBUNAL BENGALURU BENCH
Maintainability of application - recovery of salary dues - Operational Creditors - initiation of CIRP - HELD THAT:- It is not in dispute that the Petitioner is an employee having worked with the Corporate Debtor/Respondent, and the salary dues to be payable for him. The instant application is filed with an intention to recover the salary dues and other consequential dues like bonus etc. However, the object of the Code is not to recover the alleged dues, it is meant for initiation of CIRP on justified reasons. There is an Employment Agreement dated 23rd December 13th September, 2013 executed between the Petitioner and the Respondent, wherein Clause '9' says that the Agreement will be governed by the laws of India.
For an aggrieved party, knocking at the doors of Judiciary would be last resort. Such party should exhaust alternative remedy available by virtue of Agreement(s) they themselves have voluntarily executed and the terms and conditions in those Agreement(s) would bind them - In the instant case, approaching this Adjudicating Authority is not only the remedy available for the Petitioner as per the terms of agreement. It is a settled position of law that the provisions of the Code cannot be invoked to settle the dispute(s) or to recover the alleged outstanding amount. The mere acceptance of the debt in question by the Respondent would not automatically entitle the Petitioner to invoke the provisions of the Code, unless the debt and default is undisputed and proved it to the satisfaction of the Adjudicating Authority.
The Respondent is directed to settle the issue amicable, failing which, the Petitioner is at liberty to invoke the arbitration and the Respondent is directed to participate in such Arbitration, as per law, in order to resolve the issue rather than to aggravate the issue - petition disposed off.
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2020 (6) TMI 738 - PUNJAB AND HARYANA HIGH COURT
Seeking to grant the refund of excess tax deposited with the respondents - HELD THAT:- The present petition is disposed of with a direction to respondent No.3-Deputy Commissioner (Excise and Taxation) to consider and decide the representation dated 12.03.2020 (Annexure P-10) in accordance with law within six weeks from the receipt of the certified copy of the judgment. In case, on consideration, the competent authority reaches to the conclusion that the benefit claimed by the petitioner is admissible to it, in such eventuality, the consequential relief be allowed to it, within a period of six weeks thereafter.
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2020 (6) TMI 737 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make payment of its dues - Appellant alleges that Form 2 prescribed under the Adjudicating Authority Rules, which was filed along with the Application, copy of which is Annexure-A3 annexed with the Appeal, is not proper - parameters as laid down in Section 7(5)(a) of the Code satisfied or not - HELD THAT:- On perusal of the declaration by the proposed Insolvency Resolution Professional, it appears that the proposed IRP Mr Anil Agarwal has not given declaration that no disciplinary proceeding is pending against him. It is also evident that the declaration of proposed Insolvency Resolution Professional, Annexure A3, is not in prescribed Form 2 under the Adjudicating Authority Rules. Therefore, as per the Ist provisio to Section 7(5) of the Code, the Adjudicating Authority should have issued notice to the Applicant/Petitioner to rectify the Application within seven days - But in the instant case, the Adjudicating Authority has not taken into consideration the statutory provision of Sub Clause (5)(a) of Sec 7 of the Code and passed the Admission Order.
Admittedly, in this case date of default is shown as 12th May 2015. As per Article 137 of Limitation Act, the limitation period of three years was available to the applicant. But before expiration of limitation period on 03rd March 2018, the Corporate Debtor submitted an acknowledgment of debt in writing and promise to clear the dues at the earliest possible. In addition to this, the Corporate Debtor had also submitted OTS proposal which was later on accepted by the Bank - it is clear that a fresh period of limitation started after the acknowledgement of the debt by the Corporate Debtor and the Petition was filed within the extended period of limitation on account of Section 18 of the Limitation Act. Therefore, it is a Petition is not time-barred.
On perusal of the record it is apparent that after acceptance of OTS for settling the dues of all the three companies ₹ 60/- Crores, Bank has received substantial amount from the Corporate Debtor. It is also clear that after making default in payment as per terms of OTS the Corporate Debtor further paid rupees One Crore to the Bank for renewing the OTS. Bank even after accepting after rupees One Crore revoked the offer to renew the OTS - On perusal of the record that it is also evident that there is no proper compliance under Section 7(5)(a) of the Insolvency and Bankruptcy Code, but this defect in the Application is curable defect which can be rectified. It is also on record that the admission order was passed even after the status quo order of the Hon’ble High Court.
This Tribunal allows the instant Appeal by setting aside the impugned order and matter is remanded back to the Adjudicating Authority to pass an order afresh, after providing an opportunity to the opposite party in the light of the directions given in the body of the judgment - Appeal allowed by way of remand.
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2020 (6) TMI 736 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Seeking suspension of General Committee and to appoint Administrator nominated by the petitioner to manage the affairs of the Club and report to this Bench - seeking to ban, with immediate effect, acceptance of new membership or fees or any enhancement thereof till the time waitlist applications are disposed of as per the orders of this Tribunal - HELD THAT:- Imperial Delhi Gymkhana Club was incorporated on July 3, 1913 and it was established at Coronation Grounds, Delhi, it was almost immediately after capital was shifted from Calcutta to Delhi for use of the ruling elite comprising officers of the Indian Civil Service, Armed Forces and Civil Residents of the then Delhi. That time present New Delhi was nowhere. When New Delhi was built, the Imperial Delhi Gymkhana Club was allotted 27.3 acres of land in the new city in 1928 on perpetual lease.
It is found prima facie case demonstrating that the affairs of the Club are being conducted in a manner prejudicial to the public interest therefore the Union of India is directed to appoint two of its nominees of its choice as Members in the General Committee to monitor the affairs of the Club along with other GC Members and give suggestions to the GC, and direct the Union of India to constitute a Special Committee with five Members of its choice to enquire into the affairs of the Club, utility of the land leased out by the State, with regard to constructions in progress without requisite approvals or with approvals, suggestions for changes in Articles and Memorandum of Association, membership issues including waitlist and about accelerated membership, adherence of the Club to the Rules governed by Section 8 of the Companies Act 2013 and other miscellaneous issues if any and file report of recommendations suggesting for better use of the club premises for the larger good in a transparent manner on equity basis within two months hereof.
This Bench further directs the general committee that it shall not proceed with construction or further construction on the site, it shall not make any policy decisions and it shall not make any changes to the Memorandum of Association or Articles of Association and it shall not deal with the funds received for admission of Members and it shall not conduct balloting until further orders. The GC is given liberty to carry day to day functions of the Club by using funds of it other than fee collected from applicants. All these directions shall remain in force until further orders.
List this application for hearing on company petition on 07.09.2020.
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