|
Advanced Search Options
IBC - Case Laws
Showing 301 to 320 of 9149 Records
-
2024 (7) TMI 117
Maintainability of Application filed under Section 95, sub-section (1) of IBC - Appointment of RP to submit a Report under Section 99 - application filed against Personal Guarantor - moratorium has commenced in the Application filed by the PNBHFL, prior to registration of the Application filed by IFCI - HELD THAT:- The three Member Bench of this Tribunal in Krishan Kumar Basia’s case [2022 (7) TMI 834 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] has approved the view of the Adjudicating Authority that filing of the Application under Section 95 by the State Bank of India is on the date when the Application was filed and the date shall not be the date when the Application is numbered.
Applying the above ratio in the present case, we have to hold that filing of the Application by IFCI, was prior in time and the mere fact that Application filed by PNBHFL was registered earlier is inconsequential and moratorium shall commence on filing of the Application by IFCI. It is further to be noticed that present is not a case that any skelton Application was filed by IFCI - in the present case, there was no such defect in the Application, where it can be termed as a skelton Application.
The Kerala High Court in Jeny Thankachan vs. Union of India & Ors. [2023 (11) TMI 834 - KERALA HIGH COURT] had occasion to consider the issue as to whether on an Application filed under Section 94 by the Corporate Debtor the proceedings under Section 13(2) of SRFAESI Act, 2002, which was initiated by the Bank, shall be deemed to have been stayed. In the above case, the Bank has initiated proceedings under Section 13(2) of the SRFAESI Act. In the above case, proceedings under Section 14 of the SRFAESI Act were filed before Chief Judicial Magistrate, who has passed an order on 30.06.2020. Before the Chief Judicial Magistrate, an affidavit was filed stating that an Application under Section 94 of the IBC was filed on 21.08.2023 before the NCLT, hence proceedings pending before the Chief Judicial Magistrate has to be stayed.
The date of filing the Application has to be determined as per statutory Rules governing for filing of Application under Section 95.
There are no substance in submission of the Appellant that order passed by Adjudicating Authority dated 01.05.2024 appointing RP, is without jurisdiction. No grounds have been made to interfere with the impugned order - appeal dismissed.
-
2024 (7) TMI 15
Maintainability of application - forum shopping - Personal Guarantor to the Corporate Debtor failed to make repayment of its dues - Personal Guarantor or a Co-Borrower - HELD THAT:- The Respondent in the loan application form dated 12.08.2016 has been described as the Co-Borrower and not the Personal Guarantor.
It is also observed that the applicant, has approached other legal forums including this Adjudicating Authority. The Applicant had initiated Arbitration proceedings under the Arbitration and Conciliation Act, 1996. The Applicant has also initiated the proceedings under Section 138 of Negotiable Instrument Act, 1881 which evidences that applicant has approached all the possible forums for remedy therefore the applicant is indulging in the forum shopping and hence the applicant has not approached this Adjudicating Authority with clean hands.
The Application seeking initiation of the Personal Insolvency Resolution Process against the Personal Guarantor is rejected.
-
2024 (6) TMI 1041
Seeking to extend the period of Pre-packaged Insolvency Resolution Process(PPIRP) of Kethos Tiles Private Limited for 60 days after the last date of PPIRP - HELD THAT:- It is seen from the application that the Period of 120 days mentioned in the PPIRP came to an end on 03.05.2024. There is no Resolution Plan approved by the CoC till date as per the Application.
A plain reading of Section 54D of Insolvency & Bankruptcy Code, 2016 reveals that a time period of 120 days from the date of commencement of PPIRP is provided in the Act. As per Section 54D(3), if no Resolution Plan is approved by CoC the RP shall file an Application for Termination of PPIRP. Contrary to the Section Resolution Professional in the present matter has filed an Application seeking extension of time - It is seen that the Counsel for the Applicant relied upon Section 12 of the IBC,2016 to be applied in the PPIRP matters.
As no resolution Plan has been approved within the specific time period which is 120 days, it is constrained to order Termination of Pre-Packaged Insolvency Resolution Process of the Corporate Debtor initiated by the order dated 04.01.2024 - It is also seen that the RP appointed by this Tribunal has misled the Tribunal and has not performed the duties as mandated under the code.
The present Application is Rejected, PPIRP initiated vide order dated 04.01.2024 is hereby terminated and Corporate Debtor is released from rigor of law - Petition dismissed.
-
2024 (6) TMI 962
Abeyance of arbitration proceedings due to moratorium - whether the impugned orders could be categorised as one, which are so perverse that the only possible conclusion would be that there is patent lack of inherent jurisdiction, in the Arbitrator in passing them, on the face of it, so that the writ jurisdiction of this Court can be invoked?
HELD THAT:- The ‘debt’, is the debt of SMC/ Tarun Kapoor as principal borrowers as well as of the guarantors. The ‘debt’, for the purpose of the moratorium, cannot be severed into the ‘debt’ of the principal borrower or for that matter of one of the guarantors on the one hand, and the debt of the other guarantors, in this case the legal heirs of the original respondent no. 4, Mr. B. L. Passi. Though it can be said that the liability of the original respondent no. 4, late Mr. B.L. Passi, was co-terminus with the principal borrower and the other guarantors, the liability of the present respondents, would be restricted to the assets of late Shri B.L. Passi, to the extent to which they would inherit the same. Be that as may, a distinction cannot be carved out, in respect of the ‘debt’, award in respect of which is claimed in the arbitration proceedings, for the purpose of continuation of the arbitral proceedings, between the liability of the principal borrower/ guarantor who have been granted a moratorium and the others who have not approached the NCLT, as the word ‘debt’, as used in Sec. 96 of the IB Code, has to be held to be the ‘debt’, in its entirety and not otherwise.
Sec. 138 of the I B Code and its effect as enumerated in Sec. 139, have no bearing upon the matter which is being considered in the present petition.
It is also necessary to note that there is no provision in the A & C Act, 1996 for splitting up of arbitration proceedings, by conceiving of a situation of the arbitration proceedings being stayed against some of the parties and going ahead against some. The arbitration proceedings will have to be decided in their entirety against all the parties and the entitlement of the claimant and the liabilities of the respective respondents, will be determined on the basis of evidence which may be led therein, which cannot be on a piecemeal basis.
The Arbitral Tribunal, in staying the arbitral proceedings for the duration of the moratorium as granted by the NCLP under Sec. 96 of the IB Code, has not done anything which can be termed as perverse, or would fall within the expression ‘patent illegality’, so that the jurisdiction of this Court under Article 226 of the Constitution can be invoked.
The petition is therefore not maintainable and is dismissed.
-
2024 (6) TMI 961
Rejection of application - Auction Sale by a Liquidator in a Company Appeal - HELD THAT:- The fact which would emerge from records is that the status of the present Appellant(s) happens to be that of the Erstwhile Director / Shareholder of the Corporate Debtor, as against whom the Order of Liquidation has already attained finality up to the Appellate stage before this Tribunal.
Looking in to the circumstances particularly when the Appellant(s) questions the Sale Certificate and Sale made by the Liquidator, it would have been apt on his part to have earlier approached the Liquidator himself at the time of publication of Sale inviting the bids from the Prospective Buyer, which was made by the Liquidator. Having not done so and having waited till the same was actuated upon by publication on 05.05.2022, this inaction would not give the liberty to the Appellant(s) to open a new chapter by putting a question to the Sale Certificate which has been affirmed by the Liquidator who has filed the IA No. 1301 dated 12.03.2024 and who has further proceeded to distribute the Funds of the Liquidation to satisfy the Claims raised.
In view of the stage at which the Interlocutory Application was filed, coupled with the fact that since the proceedings for Liquidation in the present case has already attained finality and his status being that of an Ex-Director / Shareholder of the Corporate Debtor, the prayer made in his Application may not be taken as to be a ground to re-open the entire proceedings of Auction Sale, which was held as a consequence to the finality attached to the Order of Liquidation.
There are no merit in the instant appeal in question and the same would stand dismissed and the Impugned Order would stand affirmed - appeal dismissed.
-
2024 (6) TMI 960
Maintainability of application - initiation of CIRP - Operational Creditors - default in payment by the Corporate Debtor (CD) towards the Operational Creditor (OC) - time limitation - HELD THAT:- The invoices claimed by the OC dated back 2015 to 2019 while the present Application was filed on 20.02.2021. On perusal of the records, we do not find copy of any invoice produced by the OC in support of its claim of generating them except Annexure-H containing Computation of default prepared by the OC. The OC has also produced Annexure- C, containing particulars of invoices - A demand notice under Section 8 of the IBC has been issued to the CD dated 15.11.2019; however, no reply was received by it in spite of the same having been served on the CD.
Since the OC did not produce any invoice on record, it is difficult to ascertain the veracity of its claims and upon perusal of its computation of claims, it is found that all the invoices were raised during the period from 10.05.2015 to 31.12.2017. There is no evidence to suggest whether the alleged debt has been acknowledged by the CD. The bank account statement produced by the OC indicates receipt of Rs. 50,000/- from the CD 15.11.2019 - the law of limitation has come into play since the present Application is filed beyond the limitation period of three years from the date of alleged default as per the invoices. Thus, the issue of limitation is decided against the OC.
The OC has not succeeded in proving existence of any operational debt due and payable to it by the CD. Initiation of CIRP is a serious matter and it has severe consequences on a corporate entity. It is not to be allowed in a case which lacks any proof of debt and default committed by the CD - this Application fails as it does not satisfy the necessary requirements for admission under Section 9 of the IBC.
This Application u/s 9 of the IBC, filed by Mittal Polymers, the OC, for initiating CIRP in respect of Suvarna Additives Private Limited, the CD is rejected.
-
2024 (6) TMI 714
Auction sale - CIRP proceedings under IBC - Refund of bid amount deposited by the successful bidder - Seeking possession of property u/s 14 of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - HELD THAT:- There is no merit in the objection raised by learned counsel for IRP appointed by learned NCLT qua the prayer for release of bid amount by respondent No. 9. Factual aspect of auction having been conducted on 05.11.2021, subsequent decision on the objections by Recovery Officer and setting aside of auction proceedings as well as sale in favour of respondent No. 9 vide order dated 24.04.2023 passed by Recovery Officer, is also a matter of record. With passing of order dated 24.04.2023, which as per information provided to us, stands unchallenged as on date, sale of property in question in favour of respondent No. 9 clearly does not exist. It is a matter of record that refund of the amount in question has been ordered vide order dated 24.04.2023.
It is to be noted that any money, amount or property which may be for the benefit of corporate debtor can doubtlessly not be directed to be released or dealt with by this Court at this stage in view of proceedings before NCLT. However, in the present given factual matrix, it cannot be held by any stretch of imagination that corporate debtor has any legal right or beneficial interest qua the bid amount which has been deposited by the auction purchaser (respondent No. 9) in respect to auction/sale which has admittedly been set aside with refund thereof being ordered and the said order not being challenged till date.
No right over the same vests in respondent No. 9 and conversely corporate debtor or the Bank also do not have any right to claim money deposited towards bid amount, admittedly lying with Recovery Officer. Said money/amount cannot be stated to be for the benefit of corporate debtor. Once that be the position, it cannot be said that this Court would not have jurisdiction to direct release of said amount. It would indeed be imminently unjust towards respondent No. 9 to insist that application should now be filed by it before learned NCLT. It is, thus, held that respondent No. 9 is entitled to release of the amount deposited by it in terms of order dated 24.04.2023.
It is directed that amount deposited by respondent No. 9 be released by Recovery Officer expeditiously in terms of order dated 24.04.2023. With the said direction, both writ petitions are disposed of as infructuous at this stage, without expression of opinion on the merit of the matter or even entertainability thereof, keeping in view the passing of order dated 14.05.2024 by learned NCLT, Chandigarh Bench.
Petition disposed off.
-
2024 (6) TMI 630
Approval of Resolution Plan - Appeal filed by two dissenting Financial Creditors objecting to the Resolution Plan - giving of the flats to the Homebuyers under the Resolution Plan, without escalation of price - HELD THAT:- The Homebuyers, who have been allotted the house and amount of consideration has already been fixed in the allotment and it was undertaken by the Corporate Debtor to handover the units on payment of consideration, no exception can be taken to handing over of the units to the Homebuyers on consideration, already paid.
The Resolution Plan was approved treating them in two different categories, which was challenged before this Tribunal, on the ground that the treatment of Homebuyers, cannot be discriminated - Present is not a case, where any violation of Section 30, sub-section (2) has been proved by the Appellant. Appellant(s) being dissenting Financial Creditors are entitled to receive their payment as per Section 30, sub-section (2) (b) (ii) and the amounts, which have been offered to dissenting Financial Creditors, is in accordance with the said provision.
The Appellants are not entitled to claim payment as per the security interest in the asset of the Corporate Debtor.
Appeal dismissed.
-
2024 (6) TMI 590
Maintainability of Section 95 IBC application - initiation of CIRP against personal guarantors - non-speaking, un-reasoned order - non-application of mind - time limitation - HELD THAT:- The matter is remanded back to the NCLT, to consider the various objections raised by the petitioners on the aspect of limitation and maintainability of the Section 95 IBC application, filed by the respondent no.1 herein, before the NCLT.
Rights and contentions of both the parties are left open, which shall be considered by the learned Adjudicating Authority of the NCLT, on its merits.
The petition is disposed off.
-
2024 (6) TMI 589
Condonation of Delay in filing a appeal - Right to receive a Free Copy of the Impugned Order - Petitioner / Appellant / Bank, has not even applied for a Certified Copy (Paid Copy) of the Impugned Order - exemption as per Rule 14 of the NCLAT Rules, 2016 - time limitation - sufficient cause for delay or not.
Time Limitation - HELD THAT:- It cannot be gainsaid that the Law of Limitation, may affect a Person, but, it cannot be forgotten, that a Statutory Provision, may cause an inconvenience or hardship, to the concerned Person / Litigant, but, this Appellate Tribunal, is left with no option, but, to adhere, to the Provisions of the I & B Code, 2016, Rules and Regulations, in true letter and spirit, without carving out any exception. In reality, the Law of Limitation, bars the remedy, but, the Right, is not extinguished.
It is a settled `Law’ that a `Tribunal’ / `Appellate Tribunal’, is not to pass an `Order’, in a given `Legal Proceeding’, before it, as `opposed to Law’. When the I & B Code, 2016, the `Tribunal’ and `Appellate Tribunal’, Rules 2016, are quite clear, without any `ambiguity’ or `incongruity’, etc., the same will have to be pressed into service and applied, overriding `Equities’, despite, `Unpalatable Consequences’ flowing thereto.
It cannot be brushed aside that the Petitioner / Appellant / Bank (Financial Creditor), has failed to `apply’ for a `Certified Copy’ (`Paid Copy’) of the `Impugned Order’, from the `Adjudicating Authority’ / `Tribunal’, prior to the `Expiry’ of `Limitation Period’ on 29.11.2023. The Filing of the instant Comp. App by the Petitioner / Appellant / Bank (Financial Creditor), before this `Appellate Tribunal’, with the aid of `Free of Cost Copy’ (`Certified True Copy’ of the `Impugned Order’, duly signed by the `Officer’ concerned of the `Adjudicating Authority’ / `Tribunal’), cannot be a `Substitute’ for `every Appeal’, to be `accompanied’, by the `Certified Copy’ (`Paid Copy’) of the `Impugned Order’, as opined by this `Tribunal’, in the teeth of Rule 22(2) of the NCLAT Rules, 2016. Viewed in that perspective, the Filing of the instant Comp. App, accompanied by the `Free of Cost Copy’ of the `Impugned Order’ (`Certified True Copy’), is per se `not Maintainable’, in the `eye of Law’, as held by this `Tribunal’.
Sufficient cause for delay or not - HELD THAT:- In the instant case on hand, the reasons assigned, on behalf of the Petitioner / Appellant / Bank (Financial Creditor) to the effect that, during the said period, the Petitioner / Appellant / Bank (Financial Creditor), has `sought `Legal Advise’, from their `Legal Counsels’, for filing this Appeal, however,` due to occurrence of major Festivals’, including `Diwali’, there was a delay, in preparing and finalising the present `Appeal’, etc., are in `no manner plausible reasons / explanations’, to come within the umbrage of the term `Sufficient Cause’, and the same is only a `ploy’, praying for `Condoning the Delay’ in question, for preferring the `Appeal’, as held by this `Tribunal’.
This `Tribunal’, taking note of the cumulative attendant facts and circumstances of the present case, in an `integral’ manner, comes to a consequent conclusion, that the Petitioner / Appellant / Bank (Financial Creditor), has not made out any `Sufficient Cause’, for the purpose of `Condoning the delay of 3 days’, in preferring the instant `Company Appeal’.
Appeal dismissed.
-
2024 (6) TMI 349
Approval of Resolution Plan submitted by Suraksha Realty Limited - treatment of claim filed in CIRP of the Corporate Debtor - disregarding the claim on the ground of pending litigation - challenge to provisions of Resolution Plan dealing with the claims of the YEIDA - secured creditor or not - claim submitted by YEIDA towards additional farmers’ compensation need consideration - additional compensation to YEIDA is actually 100% payment towards additional farmers compensation or not - amount of claim towards EDC in view of the pleadings of the parties before Adjudicating Authority - claim towards EDC is also a secured claim or not - treatment of claims filed by YEIDA in CIRP of Corporate Debtor - transfer of leasehold rights of Corporate Debtor to the SRA and Assenting Financial Creditor, in the Resolution Plan - need of consent of YEIDA.
Whether YEIDA is Secured Creditor of the Corporate Debtor? - HELD THAT:- The judgment of the Hon’ble Supreme Court in Shakuntla’s case delivered on 19.05.2022 made it clear that the farmers whose land was acquired by the appellant are entitled for additional compensation of 64.7% which compensation has to be recovered from the lessee/allottees of the land and in consequence of the said Government Order, demands were issued to the allottees including the Corporate Debtor for payment. As noted above, IRP did not accept the claim on the ground that it is under arbitration. In view of the judgment of the Hon’ble Supreme Court in YAMUNA EXPRESSWAY INDUSTRIAL DEVELOPMENT AUTHORITY AND ORS. VERSUS SHAKUNTLA EDUCATION AND WELFARE SOCIETY AND ORS. [2022 (5) TMI 1637 - SUPREME COURT], the issue has been finally determined by the Hon’ble Supreme Court which law is binding on all concerned. The appellant’s claim filed in the CIRP of the corporate debtor for additional farmers’ compensation of Rs.1,689 Crores deserves consideration.
In the present case, additional farmers’ compensation payable to the farmers is part of the acquisition cost which as per the provision of the Concession Agreement, is required to be paid by the concessionaire. We, thus, are of the clear opinion that amount of additional compensation payable to the farmers towards additional cost of 64.7% for compensation is secured charge.
YEIDA is secured creditor of the corporate debtor with respect to claim of Rs.1,689 Crores towards additional farmers’ compensation claim.
Whether, in event the YEIDA is held to be Secured Creditor, the treatment of claim of YEIDA in the Resolution Plan and in the order of Adjudicating Authority is sustainable? - HELD THAT:- Adjudicating Authority failed to notice the provision of Section 13 and 13-A and considered of the claim of the appellant was only as operational creditor. Appellant being secured operational creditor, it is entitled for a different treatment in the resolution plan which is meted out to the other secured creditors. After the order of the Hon’ble Supreme Court, this Appellate Tribunal in this appeal drew attention of both the parties to judgment of “Greater Noida Industrial Development Authority vs. Prabhjit Singh Soni” [2022 (11) TMI 1125 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI], the SRA has come up with without prejudice offer of Rs.1216 Crores payment towards additional farmers’ compensation which offer is clearly in recognition of the fact that Appellant is a secured creditor.
It was held by the Hon’ble Supreme Court that NBCC who is Resolution Applicant before the Hon’ble Supreme Court in “Jaypee Kensington” [2021 (3) TMI 1143 - SUPREME COURT] case could not extinguish the liability of YEIDA. The observations made by the Hon’ble Supreme Court in paragraphs, as noticed above, clearly supports the submission of the appellant. The Adjudicating Authority although noticed the relevant paragraphs of the judgment of the Hon’ble Supreme Court in “Jaypee Kensington” but failed to consider the claim of the Appellant correctly in accordance with law. The order of the Adjudicating Authority considering the treatment of the claim of additional farmers’ compensation of the YEIDA in the Resolution Plan is unsustainable.
Having held that YEIDA is secured creditor, the treatment of YEIDA in the resolution plan and in the order of the Adjudicating Authority is unsustainable.
Whether entire claim of Rs.1689 crores submitted by YEIDA towards additional farmers’ compensation need consideration or in the above amount deduction of Rs.330 crores pertaining to land parcels of 1537 acres already sub-leased by Corporate Debtor to third parties and Rs.143 crores, pertaining to 744.6 acres land arranged from NOIDA, where farmers compensation already paid to farmers need to be done? - Whether without prejudice offer dated 18.04.2024 of SRA proposing 100% payment of additional compensation to YEIDA is actually 100% payment towards additional farmers compensation? - HELD THAT:- The amount of Rs.330 Crores which is liable to be paid for the land which has been transferred to third party, liability of corporate debtor cannot be forsaken on the ground that it has sub-leased to third party. As per Concession Agreement, it was the liability of concessionaire to pay the acquisition cost. The deduction of Rs.330 crores in the amount of claim of Rs.1689 Crores filed by the appellant cannot be permitted.
Now coming to another limb of submission with regard to Rs.143 crores in relation to land arranged from the Noida Authority. Counsel for the SRA submitted that Rs.143 crore is the amount which pertains to the land arranged from the Noida for which Noida has made the payment of additional compensation to the farmers, hence, the said amount cannot be recovered. Appellant in its reply has stated that Noida has demanded Rs.247 crores from the Appellant towards the amount of additional compensation. Reference of the letter dated 23.01.2014 has been made in reply filed by the appellant to the additional affidavit. Even if the amount is paid by the Noida towards additional farmers compensation, the same can always be asked from the appellant to reimburse, hence, the amount of Rs.143 crores also cannot be deducted from the claim of Rs.1,689 crores. The amount proposed by the SRA of Rs.1216 Crores thus, cannot be held to be 100% payment of additional compensation to YEIDA towards additional farmers’ compensation.
The entire claim of Rs.1,689 Crores submitted by YEIDA towards the additional farmers’ compensation need consideration and amount of Rs.330 Crores pertaining to land parcels already sub-leased by the corporate debtor to third party and an amount of Rs.143 crores pertaining to land arranged from Noida need no deduction. Thus, appellant’s claim of Rs.1689 crores towards additional farmers’ compensation need consideration - Without ‘prejudice offer’ dated 18.04.2024 offering to make amount of Rs.1216 crores cannot be held to be 100% payment of additional compensation claim of YEIDA.
What is the amount of claim towards EDC in view of the pleadings of the parties before Adjudicating Authority and in this Appeal? - HELD THAT:- From the additional affidavit filed by the appellant itself, it is clear that total EDCs claim of the appellant after reconciliation is Rs.529.91 crores whereas the IRP has admitted only Rs.409.6 crores. Insofar as EDCs claim as contained in the additional affidavit, there is no disagreement between the parties. In addition to the aforesaid Rs.529.91 crores, it has been pleaded by the appellant that EDCs for land parcels at Tappal and Agra may be payable by Suraksha as per the provisions of Concession Agreement and in terms of the undertaking given by it in the rejoinder dated 03.05.2024 as and when external development work is carried out at Tappal and Agra - Total amount of EDCs claimed as reviewed and reconciled by the appellant is Rs.529.91 crores subject to payment by EDCs towards land parcels at Tappal and Agra, as and when external development work is carried out at Tappal and Agra.
Whether claim towards EDC is also a secured claim under 1976 Act and needs to be dealt in the Resolution Plan as secured claim? - HELD THAT:- There can be no doubt that EDC charges are not a tax or a fee under the 1976 Act. The expression fee or tax levied under the 1976 Act has to be given meaning. Because for non-payment of any fee or tax levied under the Act, imposition of penalty is contemplated. Section 13 contemplate imposition of penalty to the extent of sum not exceeding the amount that is to be recovered from the transferee or occupier. Section 13 being a penal provision has to be strictly construed. Thus penalty can be imposed only for any fee or tax levied under the 1976 Act. The Appellant has not brought any material on record to indicate that EDC are fee levied under the Act. Rather, the case of the Appellant is that EDC is payable as per the Concession Agreement. Any amount payable under the Concession Agreement, which falls under Section 13 alone has to be treated to be amount, for default of which proceedings under Section 13A can be initiated.
Claim towards EDC of the Appellant is not a secured claim under the provisions of 1976 Act and does not need to be dealt in the Resolution Plan as a secured claim.
Whether for treatment of claims filed by YEIDA in CIRP of Corporate Debtor, consent of YEIDA is required for proposing a payment to YEIDA in the Resolution Plan? - Whether for transfer of leasehold rights of Corporate Debtor to the SRA and Assenting Financial Creditor, in the Resolution Plan, consent of YEIDA is necessary? - HELD THAT:- The Resolution Plan in the present case, does not contemplate transfer of land to SRA and Assenting Financial Creditors. Information Memorandum clearly contemplate that Corporate Debtor has only lease hold rights in the land. Owner of the land is still the Appellant, whose ownership of land cannot be extinguished with in any manner in the Resolution Plan. Under the Resolution Plan only rights and assets of Corporate Debtor can be dealt with. The Corporate Debtor, who has only lease hold rights cannot transfer any higher rights to any other person, including the SRA and Financial Creditors - in the present case, no clause of Concession Agreement is being tinkered with by the Resolution Applicant, so as to require consent of YEIDA. The Resolution Plan deals with the claim of Creditors as per CIRP Regulations and Resolution Plan only deals with lease hold rights, which Corporate Debtor has in the land in question.
For treatment of claim of YEIDA in the CIRP of Corporate Debtor and for payment to YEIDA in the Resolution Plan, consent of YEIDA is not required - For transfer of lease hold rights of Corporate Debtor to SRA or Assenting Financial Creditors in the Resolution Plan, consent of YEIDA is not necessary.
What relief the Appellant is entitled in this Appeal? - HELD THAT:- The Appellant, who is also a secured Operational Creditor to the extent of Rs.1689 crores, is also entitled for payment of same percentage of amount, which has been offered to the Financial Creditors. Towards additional farmers’ compensation, the Appellant is entitled for 79% of its claim, i.e., 79% of Rs.1689 crores, which comes to Rs.1334.31 crores. The SRA has already offered to make payment of Rs.1216 crores. Thus, the SRA has to bear additional amount of Rs.118.31 crores. The entitlement of Appellant being secured creditor is thus, clearly to amount of Rs.1334.31 crores. The SRA has already given an offer to bear Rs.1216 crores, ends of justice will be served in issuing direction to SRA to make payment of Rs.118.31 crores in addition to Rs.1216 crores already offered by it.
The timeline proposed for payment of Rs.1216 crores in the offer of SRA is payment in priority over Financial Creditor, since, Financial Creditors are not being paid the amount in priority to the Operational Creditor. The submission of the Appellant that entire payment should be paid at once by the SRA, cannot be accepted. It is already noticed that stakeholders are awaiting for their claims to be considered, including those Homebuyers and there has been prolonged litigations on different issues and the Resolution Plan could be approved only by impugned order dated 07.03.2023. To put finality to the process and by accepting the claim of Appellant as secured Operational Creditor towards amount of Rs.1689 crores and directing payment of amount equivalent, which has been given to the secured Financial Creditor, ends of justice will be served in paving a way forward for implementation of the Resolution Plan.
Conclusion - The impugned order passed by Adjudicating Authority insofar as it deals with claim of the Appellant of Rs.1689 crores of additional farmers’ compensation is set aside. The rest of the impugned order approving the Resolution Plan is upheld - The Successful Resolution Applicant, i.e., Respondent No.2 is directed to make payment to the Appellant of its secured operational debt of Rs.1689 crores in ratio of 79%, which have been paid to other secured creditors, which amount comes to Rs.1334.31 crores - The SRA in its offer dated 18.04.2024 has already undertaken to make payment of Rs.1216 crores towards additional farmers’ compensation in the timeline as indicated in the offer dated 18.04.2024. Let the SRA make the payment of Rs.1216 crores as per its offer in the time line as indicated therein.
Appeal disposed off.
-
2024 (6) TMI 308
Maintainability of the writ petition due to the presence of an alternative remedy - Recovery of electricity dues from the petitioner - effective date when as per the resolution plan, the petitioner No. 1 was taken over.
Recovery of electricity dues - HELD THAT:- After the petitioner No. 1 was admitted to insolvency, a resolution plan which had been submitted was approved by the National Company Law Tribunal and by the Supreme Court, and Reliance Projects and Property Management Solutions Ltd. (RPPMSL) took over the petitioner No. 1 on 22.12.2022. Section 31 (1) of the Insolvency and Bankruptcy Code, 2016 (I&B Code) which is relevant in this respect, provides that an approved resolution plan is binding on all creditors.
Even in cases where the creditors include Central Government and such other authorities to whom statutory dues are owed, they shall be bound by the said resolution. It is seen in the instant case that in accordance with the provisions of the I&B Code, public announcements had been made inviting all creditors of the petitioner No. 1, to submit proof of claims on or before 01.06.2016, and the same was also published by the Interim Resolution Professional as evidenced by Annexures 3 to 5 of the writ petition - The approval order then on the resolution coming to a close, was passed on 03.12.2020 by the NCLT, wherein as per the approved Resolution Plan the claims, demands and liabilities as the case may be were to stand fulfilled on the deposit of the resolution amount. Though against the approval order, appeals were filed by various persons, the NCLT on an application by the petitioner No. 1 allowed the deposit of the total value of the Restoration Plan into an Escrow account, which would go towards distribution of the said amount to the creditors, which enabled the acquisition and control of the petitioner No. 1 on a clean slate, as also on all the claims which were lying before the effective date i.e. 22.12.2022.
Maintainability of petition - availability of alternative efficacious remedy - HELD THAT:- Due to the availability of alternative efficacious remedy, by virtue of Section 60 (5) (c) of the I&B Code, 2016, the argument of non-maintainability of petition is not accepted, as the writ petitioner is clearly seeking a mandamus in view of the actions of the respondents Nos. 1 & 2, where in spite of the binding nature of Section 31 of the I&B Code, are denying the writ petitioners electricity connections by making the same contingent upon the recovery of pending dues not attributable to it.
The petition is allowed.
-
2024 (6) TMI 135
Refusal to revise timeline for making balance payments - private sale - doctrine of pprobation and reprobation.
Whether, the Indian Contract Act, 1872 would be applicable for private sale or the private sale would be covered as per provisions of the Code r/w Liquidation Regulation, 2016? - HELD THAT:- After perusal of the minutes it becomes quite obvious that lenders did not concur with the extension of timeline proposed by the Appellant for which the Appellant undertook to file suitable application before the Adjudicating Authority - it is unable to subscribe to the contention of the Appellant that the 10th SCC Meeting was unanimous in endorsing the extended timeline proposed by the Appellant.
Doctrine of pprobation and reprobation - HELD THAT:- It is a fact that the Appellant moved an application for seeking extension of the timelines and based on the request of the Appellant the Adjudicating Authority vide its Impugned Order extended the timelines but also stipulated condition regarding forfeiture. It is already noted that in the earlier discussion that the clause of forfeiture was added by the Adjudicating Authority in terms of Rule 15 of the NCLT Rules, 2016. It is settled principle based on doctrine of approbation and reprobation that party can either accept benefit arising of the same order or can challenge the same but not both.
The Appellant gave his deemed acceptance to the Impugned Order dated 29.06.2022 by making their two payments. Hence, there are force in the logic of the Respondent and the Appellant cannot be allowed such pleadings.
Appeal dismissed.
-
2024 (6) TMI 134
Replacement of the Resolution Professional (RP) - the plea raised on behalf of the Applicant is that the Resolution Professional seems to have no desire to streamline the process - HELD THAT:- From Sections 102 to 112 of IBC, 2016, it nowhere appears that the RP could carry with him any lawyer to meet PG, while seeking to discharge his function in terms of the provisions of Section 105 of IBC, 2016 i.e. the stage when PG has to prepare his repayment plan.
Section 100(2) of IBC, specifically provides that where the Adjudicating Authority admits an application under sub-section (1) of Section 100 it may on the request of the RP issue instructions for the purpose of conducting negotiations between the debtor and the creditors and for arriving at a repayment plan. Apparently, no such request was made by the RP.
The provisions of Section 105 of IBC, 2016 and Regulations 17 of the aforementioned regulations are very clear that the repayment plan has to be prepared by the Debtor and it is for him to consult the RP. A reading of Section 105(2) of the Code, further makes it clear that it is only in terms of the repayment plan that the Resolution Professional may be required or authorized to carry on the debtor’s business or trade on his behalf or in his name or realise the assets of the debtor or administer or dispose of any funds of the debtor. Thus, when there was no such authorization in favour of RP, it is unable to appreciate and comprehend that how the Ld. Counsel for the RP could rely upon Regulation 18 of the aforementioned regulation. Such arguments could be appreciated only if the Personal Guarantor would have made authorization in favour of the RP, in terms of the provisions of Section 105(2) of IBC, 2016.
Mr. Shiv Nandan Sharma, IP is appointed as RP in place of Mr. Raj Kamal Saraogi, IP. It is made clear that nothing observed hereinabove should be held against Mr. Chaurasia or Mr. Raj Kamal Saraogi in any manner - It goes without saying that the newly appointed RP would discharge his function in terms of our order dated 22.04.2024, afresh.
Application disposed off.
-
2024 (6) TMI 91
Seeking ex-post facto approval in respect of Section 7 applications - statutory requirement under Section 35 Sub-section (5) proviso to obtain prior approval of the Adjudicating Authority by the Liquidator to institute a suit or proceeding on behalf of the Corporate Debtor is a mandatory requirement or only a directory requirement - consequences and status of the proceedings instituted by the Liquidator on behalf of the Corporate Debtor without prior approval of the Adjudicating Authority - approval under Section 33(5) to the Liquidator to institute proceeding on behalf of the Corporate Debtor, the party against whom proceedings are to be instituted has to be given an opportunity.
Whether the statutory requirement under Section 35 Sub-section (5) proviso to obtain prior approval of the Adjudicating Authority by the Liquidator to institute a suit or proceeding on behalf of the Corporate Debtor is a mandatory requirement or only a directory requirement? - HELD THAT:- The legislative scheme as occurring in Section 33(5) is clear and categorical and the legislative intendment is clear that after the liquidation order is passed, no suit or legal proceeding is instituted by or against the Corporate Debtor with only one exception that suit or legal proceeding on behalf of the Corporate Debtor can be instituted with the prior approval of the Adjudicating Authority - looking to the statutory scheme, in use of the prohibitory word in Section 33(5), are satisfied that the requirement of prior approval by the Adjudicating Authority for instituting any suit or proceeding is mandatory and cannot be held to be directory. The mere fact that no consequences has been provided in the provision, cannot be a ground to treat the requirement as directory.
The statutory requirement under Section 35 Sub-section (5) proviso to obtain prior approval of the Adjudicating Authority by the Liquidator to institute a suit or proceeding on behalf of the Corporate Debtor is a mandatory requirement.
What are the consequences and status of the proceedings instituted by the Liquidator on behalf of the Corporate Debtor without prior approval of the Adjudicating Authority? - Whether a post facto approval granted by the Adjudicating Authority of proceedings instituted by the Liquidator without obtaining prior approval shall make the proceedings authorized/ competent? - HELD THAT:- On looking into the provision of Section 171 and Section 446, it is clear that leave of the Court has to be prior to the instituting any proceeding. Thus, the expression ‘leave of the Court’ and ‘prior approval’ denotes same meaning i.e. leave of the Court/ prior approval before any proceeding is instituted by the Liquidator. The legislative scheme which was earlier operating in the Companies Act, 1913 and Companies Act, 1956 has been carried forward by the IBC in so far as requirement under Section 33(5) are concerned.
The consequence of the proceedings instituted by the Liquidator on behalf of the Corporate Debtor without prior approval of the Adjudicating Authority under Section 33(5) is unauthorized and incompetent - Post facto approval granted by the Adjudicating Authority with regard to continuation of proceedings already instituted by the Liquidator which were instituted without obtaining prior approval shall make the proceedings authorized and competent from the date when post facto approval is granted.
Whether before approval under Section 33(5) to the Liquidator to institute proceeding on behalf of the Corporate Debtor, the party against whom proceedings are to be instituted has to be given an opportunity? - HELD THAT:- The scheme delineated under Section 33(5) does not indicate that the Liquidator has to give any opportunity or notice to the party against whom approval is sought to initiate proceedings. The provision of Section 33(5) is that the Adjudicating Authority should keep control over estate in the liquidation proceeding so that no proceeding can be initiated by the Liquidator so as to expose the Corporate Debtor to unnecessary expenses. Hence, the approval of the Adjudicating Authority is required to institute proceeding. For approval by the Adjudicating Authority, the legislative scheme does not indicate any notice or opportunity to the party against whom proceedings are to be instituted - Before granting approval under Section 33(5) proviso to institute proceedings by the Liquidator on behalf of the Corporate Debtor, the party against whom proceedings are to be instituted is not to be given a notice or hearing necessarily.
Whether the impugned order dated 07.02.2024 passed by the Adjudicating Authority is unsustainable and deserves to be set aside? - HELD THAT:- The adequate reasons were given by the Adjudicating Authority for granting ex-post factor approval. The prayer made before the Adjudicating Authority was prayer to permit the Liquidator to continue and proceed with the Section 7 proceedings, which having been granted, the Liquidator was entitled to proceed with the Section 7 proceedings - the order of the Adjudicating Authority is not unsustainable.
There are no ground to interfere with the order of the Adjudicating Authority - appeal dismissed.
-
2024 (6) TMI 90
Maintainability of section 7 application - Fulfillment of the threshold of 100 allottees u/s 7 of the Code or not - Validity of possession and issuance of Occupancy Certificate. - Real Estate Project. - Project comprised of IT/ ITES office, Residential Units, Commercial Spaces and other facilities - NCLT admitted the application of the allotees.
Maintainability of section 7 application - Fulfillment of the threshold of 100 allottees u/s 7 of the Code or not - HELD THAT:- The issue that for fulfilling the threshold under Section 7, it is number of allottees which is relevant and not the number of financial creditors is well settled. The Hon’ble Supreme Court in Manish Kumar vs. Union of India And Anr. [2021 (1) TMI 802 - SUPREME COURT] has laid down that 'As long as there are independent allotments made to him or his family members, all of them would qualify as separate allottees and they would count both in the calculation of the total allotments, as also in reckoning the figure of hundred allottees or one-tenth of the allottees, whichever is less.'
Thus, for finding out as to whether threshold is fulfilled or not under Section 7 has to be look into number of allottees. A copy of the application which has been filed by the allottees indicate that in the application, document of the financial creditors including copy of the agreement were brought on record. Annexure-D Part-I which contains a list of financial creditors, along with details of allotted units was filed which indicate that in Column 4, unit number of each financial creditor has been mentioned.
Validity of possession and issuance of Occupancy Certificate - HELD THAT:- On looking into the Report of the IRP, it was clearly mentioned that there were no possession of the unitholders noticed except Unit No.10A in the IT Block which was open and in possession of PAN Security Services and BLS Developer Pvt. Ltd. In paragraph 12, the aforesaid statement has been made by the IRP. Paragraph 12(e) which was relied by the Appellant only mentions that the status of the possession of the units in the commercial block could not be determined. However, Flex Boards/notices of various professionals/businesses were affixed in some of the units in the said tower/block.
Thus, it is clear that for none of the units have been given Occupation Certificate or Completion Certificate and application for Occupancy Certificate is pending. In this context, we may also refer to the reply filed by the Respondent/allottees. Respondent has brought on record letter dated 16.11.2021 issued by the Greater Noida Industrial Development Authority to the allottees which was in reference to request of the allottes for completion certificate. There being no Occupancy Certificate issued by Greater Noida Authority and as per the Report of the IRP, Occupancy Certificates are pending - When no valid possession has been handed over to the allottees, we are not persuaded to accept the submission of the appellant that names of 23 units need to be deleted from the name of applicants who had filed Section 7 application.
No Dues and No Claim Certificate relied by the appellant and Sub-Lease Agreement is not a ground on which the name of those who have given No Dues and No Claim Certificate should be deleted from number of the applicants who have filed Section 7 application. Adjudicating Authority has also in the impugned order has held that the construction is incomplete and the applicant fulfils the threshold of minimum 100 allottees. Adjudicating Authority also rejected the submission raised before it that 36 unitholders who have claimed assured return are speculative allottees and their names should be deleted from the application.
The Adjudicating Authority did not commit any error in admitting Section 7 application. Taking the note of the fact that the interim order was passed by this Tribunal on 21.02.2023 and this appeal is being decided on 31.05.2024, we direct for exclusion of period from 21.02.2023 till 31.05.2024 in the CIRP of the Corporate Debtor. There is no merit in the appeal.
The appeal is dismissed subject to exclusion of time from 21.02.2023 till 31.05.2024.
-
2024 (6) TMI 89
Restoration of the dismissed petition for non-prosecution - reasonable ground established by the Applicant for restoration of the Application or not - applicant involved in Forum shopping.
Whether there was any sufficient case for nonappearance on 01.05.2024? - HELD THAT:- It was not the case of the Bank that no death took place. The Adjudicating Authority has never directed the Appellant to file the copy of death certificate. The observations that ‘no specific relationship of the deceased has been mentioned’ and ‘no death certificate has been placed on record’ are not sufficient ground to reject the cause given in the Restoration Application for restoration. Further, it is noticed that the Adjudicating Authority embarked upon the earlier litigations under Section 13, sub-section (2) between the parties and came to the conclusion that Applicant has not approached the Tribunal with clean hands and rather he is involved in Forum shopping, as was found in paragraph 27. It is relevant to notice that Application under Section 94, was not up for consideration and the consideration on merits of the Application was uncalled for. Observation of the Adjudicating Authority that the Appellant has not approached the Tribunal with clean hands and is involved in Forum shopping, were the observations, which were made prematurely. It was open for the Adjudicating Authority to consider all the above issues when Application under Section 94 comes for consideration.
Sufficient cause for non-appearance or not - HELD THAT:- Hon’ble Supreme Court in in G.P. Srivastava vs. R.K. Raizada and Ors. [2000 (3) TMI 1126 - SUPREME COURT], observed that while considering the question of sufficient cause for non-appearance, other circumstances anterior in time cannot be relied - Applicants were unable to show their bonafides and establish sufficient cause. It was further noticed in the facts of the said case that a defendant cannot be penalized and made to suffer the rigours of litigation over decades. The judgment of the above case was on the facts of the said case and has no bearing in the present matter.
The sufficient cause had been shown by the Appellant for restoration of the Application. The Adjudicating Authority committed error in rejecting the Application by the impugned order dated 22.05.2024 - the Application under Section 94 was not up for consideration, hence, observations made by the Adjudicating Authority that Applicant has not approached the Tribunal with clean hands and rather he is involved in Forum shopping, were uncalled for and premature. The Adjudicating Authority could have considered the merits of the Application under Section 94 and the conduct of the Appellant, when the Application comes for consideration.
Thus, sufficient cause was shown by the Appellant for allowing Restoration Application for recalling of order dated 01.05.2024, dismissing the Application for non-prosecution.
Appeal allowed.
-
2024 (6) TMI 54
Seeking a direction to the IBBI to take appropriate steps against the Liquidator - seeking to issue appropriate guidelines and due process for dealing with the actions of the Insolvency professionals who are suspended by the Disciplinary Committee of the IBBI - HELD THAT:- As far as charge of contravention of prescribing non-refundable participation fee of Rs. 5,00,000/-, Rs. 10,00,000/-, Rs. 10,00,000/- and Rs. 50,000/- vide public announcements made on 17.09.2019, 27.09.2019, 21.10.2019 and 11.11.2019 is concerned, this Court vide Judgment dated 27.05.2024 has exonerated Mr. Sundaresh Bhat of the said charges. However, Mr. Sundaresh Bhat has been found guilty only of charge of paying excess fee to a support service called BDO Restructuring Advisory LLP. This Court has not interfered with the findings of the IBBI on this charge but has modified the order of suspension to the period undergone.
Petition dismissed.
-
2024 (6) TMI 53
Stay on suit - applicability of moratorium order of the U.S Bankruptcy Court applicable in India - principles of Comity of Nations and Courts, also known as Universalism.
Stay on suit - applicability of moratorium order of the U.S Bankruptcy Court applicable in India - HELD THAT:- This Court finds that the inherent power of the Court was invoked for stay of the suit, although the Code of Civil Procedure has a specific provision for stay of a suit. Even assuming that nomenclature would not be of any consequence and the application could be treated as an application for stay, the explanation to Section 10 somewhat answers the issue.
The philosophy behind such a recognition was that courts should assist insolvency proceedings. Moreover, the moratorium in this case was granted in Chapter 11 cases which deal with insolvency, reorganization, restructuring, etc. The suit does not fall under any of those categories.
VIPAN KUMAR SHARMA VERSUS TOSHIAKI AIBA & ANR. [2023 (10) TMI 1394 - SC ORDER] is also a decision on an insolvency proceeding where properties of the corporate debtor in India was sought to be administered by filing a suit. A suit was filed for administration of the assets in India of a corporate debtor or a person against whom insolvency proceeding was going on in a foreign country. In such a suit, an application for rejection of the plaint was filed and the Hon’ble Delhi High Court held that the plaint could not be rejected at the very initial stage, upon noting the pendency of an insolvency proceeding in a foreign country.
Principle of Comity of Nations and Comity of Courts - HELD THAT:- The conclusion arrived at by the learned trial judge by applying Section 44A and 13 and 14 of the Code of Civil Procedure was with regard to enforcement of foreign decrees and orders of foreign courts with which India did not have reciprocity. However, it cannot be ignored that the principle of Comity of Nations and Comity of Courts had been recognized by the Indian Courts by giving adequate weightage to or considering existence of such order or decree of a foreign court while deciding any proceeding in the domestic court - In the case in hand, however, the plaint case and the reliefs claimed do not indicate that there is any money claim or any other claim which would be covered by Chapter 11 cases in the U.S. Bankruptcy Code and thus the suit can continue. The suit is therefore, not required to be stayed.
The distinguishing factor with the moratorium order of the U.S. Court is that by the said order, the management of the petitioner has not been superseded. The management continues. The management can always contest the suit.
The revisional application is dismissed.
-
2024 (6) TMI 52
CIRP - existence of debt and default or not - Financial Default and Demand Notice - Impact of One Time Settlement (OTS) Agreement - Failure to Adhere to OTS Terms - Assessment of Financial Creditor’s Conduct - Adjudicating Authority’s Decision.
Financial Default and Demand Notice - HELD THAT:- The Demand Notice and the subsequent Company Petition were issued in accordance with the provisions of the IBC. The Financial Creditor's claim of Rs. 58.38 Crores is backed by the loan agreements and the Corporate Debtor's admitted inability to repay the loans as scheduled - The debt and default are further established by the following documents (a) CIBIL Report showing overdue amounts; (b) Statement of Loan Accounts of both loans as proof of default (as on 16.06.2020); and (c) Balance sheet of the Corporate Debtor for FY 2017-18. Further, it is not hit by Section 10A, as the date of default as per Part IV of Section 7 petition is 15.12.2019.
Impact of the One Time Settlement Agreement - HELD THAT:- While the OTS agreement shows the Corporate Debtor’s intent to settle the dues, the failure to adhere to its terms, even considering external factors such as the High Court’s order, cannot nullify the Financial Creditor's right to pursue insolvency proceedings. The terms of the OTS required strict compliance, and the Corporate Debtor's failure to meet these terms justified the Financial Creditor's decision to terminate the agreement.
Assessment of Financial Creditor’s Conduct - HELD THAT:- The Financial Creditor acted within its rights by accepting the initial OTS payment and subsequently seeking to recover the remaining dues through insolvency proceedings when the Corporate Debtor defaulted. There is no evidence of bad faith or unfair obstruction by the Financial Creditor. The acceptance of partial payments does not negate the default or the legitimacy of the insolvency proceedings.
Adjudicating Authority’s Decision - HELD THAT:- The Adjudicating Authority correctly applied the provisions of the IBC in admitting the Company Petition and initiating CIRP. The Corporate Debtor’s inability to service its debt, as per the loan agreements and the OTS, substantiates the Financial Creditor’s petition under Section 7 of the IBC.
There is a clear admission of debt and default is clearly established. The default amount is more than Rs.1 crore. The Financial Creditor acted within its legal rights throughout the process, and the initiation of CIRP is justified by the Corporate Debtor’s persistent defaults and failure to comply with the OTS terms.
The order of the Adjudicating Authority is upheld, and this Appeal is hereby dismissed.
............
|
9911796707
