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IBC - Case Laws
Showing 361 to 380 of 9149 Records
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2024 (5) TMI 679
Seeking directions to the Resolution professional to conduct Transaction Audit of the books of the Corporate Debtor appointing Mr Amit Khandelwal as an independent auditor - constitutionality of re-constitution of COC by RP without conducting the transaction audit - legality of approval of resolution plan by the illegally constituted COC - HELD THAT:- The impugned order being only interlocutory order and subsequently another order has been passed on 11.03.2024 all issues pertaining to the application are open and to be considered and decided by the Adjudicating Authority after hearing both the parties.
Since the Adjudicating Authority in subsequent order makes it clear that the application may be decided afresh after hearing both the parties and considering the Reply, there are no reason to keep the appeal pending.
Appeal disposed off.
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2024 (5) TMI 678
Initiation of CIRP - application barred by Section 10A of IBC - date of alleged default is mentioned as 08.08.2018 from which date three years’ period came to end on 08.08.2021 and thereafter petition was not filed within the time - HELD THAT:- The present is a case where admittedly default was committed by the Corporate Debtor much prior to 10A period i.e. 08.08.2018 as was claimed by the State Bank of India in its application. When default was committed by the Corporate Debtor prior to 10A period, it is not open for the Appellant to claim that application deserve to be rejected on the ground of Section 10A.
There are two reasons for not accepting the submissions of the Appellant that the application under Section 7 was bared by Section 10A. Firstly, the default was committed by the Corporate Debtor prior to 10A period w.e.f. 08.08.2018, which was date of default mentioned in Section 7 application. When Section 7 application mentions date of default which default was committed prior to 10A period, application under Section 7 cannot be held to be barred by Section 10A. Further, although OTS was communicated by the Bank by letter dated 05.09.2020 but the OTS itself contemplates that parties shall jointly file an application before the DRT where original application filed by the Bank was pending and obtain the Consent Decree - The undertaking admittedly was issued on 11.05.2021. When the Joint Application was filed subsequent to 10A period and Consent Decree was obtained only on 26.04.2022, the submission of the Appellant that application under Section 7 was barred by 10A cannot be accepted.
It is relevant to notice that the date of default was mentioned as 08.8.2018 and OTS proposals were given by the Corporate Debtor on 11.03.2020 and 05.05.2020. The application under Section 7 was filed by the Bank on 13.03.2023 i.e. well within three years from submission of OTS proposal. OTS proposal submitted by the Corporate Debtor was clearly acknowledgement of debt and the benefit of Section 18 of the Limitation Act shall be available to the Financial Creditor. Further, admittedly Consent Decree was passed by Debts Recovery Tribunal on 26.04.2022 and from the date of decree of the DRT, there shall be further period of three years for filing application.
There are no grounds have been made out in this appeal to interfere with the impugned order admitting Section 7 application. There is no merit in the Appeal - Appeal is dismissed.
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2024 (5) TMI 677
Entitlement to file an appeal as an Independent Director in the Corporate Debtor - aggrieved person regarding acceptance of claim of the financial creditor or the quantum of financial credit admitted or not - HELD THAT:- It is apparent that the OTS of 2008 was revoked and that the claim made by Respondent No. 2 was filed ignoring the said revoked OTS. The appellant’s submission that the OTS was not revoked is not borne out from the documents.. The admission of claim of Respondent No. 2 is in accordance with the application and order of admission under Section 7 of IBC, 2016, the correspondence between the financial creditor and corporate debtor and other records of the Corporate Debtor. The claim, as well as constitution of CoC with voting share as per claim, was in the knowledge of appellant from the very beginning. There are no fault in the RP’s admission of claim of Respondent No. 2.
There are no merit in this Appeal. The Appeal is accordingly dismissed.
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2024 (5) TMI 676
Admission of Section 95 application filed by the Financial Creditor - Personal Guarantor of the Corporate Debtor - date of default - time limitation - Insolvency petition which has been filed by the Financial Creditor has been signed by Resolution Professional who was not the authorized officer of Respondent No.1 - Personal Guarantee dated 25.07.2012 executed by the Appellant in favour of Dena Bank is an unstamped document.
Time limitation - Submission of the Appellant is that the Deed of Guarantee dated 25.07.2012 was invoked by Recall Notice dated 04.03.2016, hence, three years’ period of limitation ended on 04.03.2019 and application filed by the Financial Creditor on 10.08.2021 was barred by time - HELD THAT:- On looking into the Declaration cum Undertaking, which was issued by the Appellant, it is clear that said declaration contained the acknowledgement of debt of the company towards the Financial Creditor. The acknowledgment of debt in writing is sufficient to extend the period of limitation as per Section 18 of the Limitation Act. Thus, the said Declaration cum Undertaking will extend further period of three years from date of undertaking and the application under Section 95 which was filed on 10.08.2021 cannot be said to be barred by time.
The Hon’ble Supreme Court by Suo Motu Writ Petition (Civil) No. 03 of 2020 [2021 (3) TMI 497 - SC ORDER] has excluded the period from 15.03.2020 to 28.02.2022 and in the present case the application was filed on 10.08.2021 i.e. during the aforesaid period. The three years’ period from date of Declaration cum Undertaking came to an end on 28.01.2021 i.e. within the period which as excluded by the Hon’ble Supreme Court - thus, the application cannot be said to be barred by time.
Insolvency petition which has been filed by the Financial Creditor has been signed by Resolution Professional who was not the authorized officer of Respondent No.1 - HELD THAT:- Section 95(1) permits a creditor to file an application through a Resolution Professional for initiating the insolvency resolution process. Thus, the submission of application by the Financial Creditor through Resolution Professional is clearly permitted by Section 95(1) - there are no defect in the application which warrants dismissal of application on this ground. No defect was pointed out by the Adjudicating Authority to the Financial Creditor, which fact is undisputed.
Personal Guarantee dated 25.07.2012 executed by the Appellant in favour of Dena Bank is an unstamped document - HELD THAT:- The Application under Section 7 was filed by the Financial Creditor against the Corporate Debtor with regard to same loan facility, which was admitted by the Adjudicating Authority vide its order dated 19.02.2020. Thus, when Financial Creditor’s status was accepted in Section 7 proceeding and the application under Section 7 was admitted against the Corporate Debtor, the status of Financial Creditor as Assignee of the Bank cannot be questioned by the Appellant in this proceeding. We do not find any substance in the submission of the Appellant.
There are no error in the order passed by the Adjudicating Authority admitting Section 95 application. There is no merit in the appeal - appeal dismissed.
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2024 (5) TMI 628
Violation of Principle of Natural Justice - denial of opportunity of hearing - grounds which were taken by the Adjudicating Authority were neither pleaded by the application filed by the Torrent Power Limited and Vantage Point Asset Management Pte. Ltd. nor they were addressed at the time of hearing of the application as pleaded by the RP and CoC - correctness of approved Resolution Plan - HELD THAT:- There are substance in the submission of the Counsel for the Appellant that process adopted by the Adjudicating Authority in proceeding to allow application has violated the Principles of Natural Justice. No notice was issued in the application, no reply was called on the applications and while allowing the said application the entire plan which was approved has been remitted for reconsideration - the impugned order deserves to be set aside on the ground of violation of Principles of Natural Justice.
The Hon’ble Supreme Court further in Ramkrishna Forgings Limited vs. Ravindra Loonkar, Resolution Profession of ACIL Limited & Anr., [2023 (11) TMI 910 - SUPREME COURT] again reiterated that Adjudicating Authority has jurisdiction only under Section 31(2) of the Code, which gives power not to approve the Plan, only when the Resolution Plan does not meet the requirements of the Code.
The observation that in absence of any discrimination or perverse decision, it is not open to the Adjudicating Authority or this Appellate Tribunal to modify the Plan was in reference of the claim of Operational Creditor, which was under consideration in the said Appeal. The expression discrimination has to be understood in the context of the Operational Creditor, who as per the provisions of Section 30, sub-section (2) is entitled to an amount. In event the amount offered to the Operational Creditor is not in accordance with Section 30, sub-section (2), there may be a ground for interference.
The concept of discrimination of payment to various creditors have been further explained and elaborated in by the Hon’ble Supreme Court in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT], where it has been held that there can be different payment to various classes of creditors. Another expression used in paragraph-6 by this Tribunal is perversity.
In the facts of the present case, there can be no allegation against the Appellant about the concealment of any fact from the Adjudicating Authority. The Appellant was only a Resolution Applicant, who has submitted a Resolution Plan, which after evaluation was placed before the CoC by the RP.
The CoC being led by two leading Banks, i.e., Bank of Baroda and State Bank of India, having vote share of 92.77% and 7.23% respectively was well aware of the financial intricacies and there has to be intrinsic assumption that the Financial Creditors were well aware of all financials of each Resolution Plan.
The findings of the Adjudicating Authority regarding incomplete financial data has been challenged in the Appeals both by Sarda as well as RP and CoC - the impugned order passed by Adjudicating Authority dated 06.10.2023 deserves to be set aside, on the violation of principles of natural justice, consequent to which order, the matter needs to go back to the Adjudicating Authority for fresh consideration.
Appeal disposed off.
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2024 (5) TMI 627
Initiation of CIRP - NCLAT admitted the application u/s 7 - existence of debt and default - date of default was 14.02.2020, when the account was declared NPA - application barred by Section 10A of IBC or not - HELD THAT:- The Application under Section 7 clearly mentions that date of default was 14.02.2020, when the account was declared NPA. The Financial Creditor was fully entitled to file Section 7 Application, treating the date of default as 14.02.2020 - It is further relevant to notice that date of NPA mentioned was not for the first time mentioned in Section 7 Application. The Financial Creditor has initiated proceedings under the SARFAESI Act against the Corporate Debtor before the Debts Recovery Tribunal, referring to Notice under Section 13, sub-section (2) of SARFAESI Act and the date of NPA was mentioned as 14.02.2020. The sheet-anchor submission of learned Counsel for the Appellant is on renewal letter dated 26.07.2019 issued by the Syndicate Bank (now Canara Bank).
Renewal of sanction for one year is the renewal of working capital limit, as noted in the letter. Renewal of working capital limit is not relatable to the default committed by the Corporate Debtor in fulfilling the obligations under the Sanctioned Facilities. When on 14.02.2020, accounts of the Corporate Debtor were declared as NPA, it clearly means that default was committed by the Corporate Debtor in carrying out his financial obligations. Renewal of sanction has nothing to do with the date of default committed by the Corporate Debtor in fulfilling its financial obligations. Thus, the very basis of the submission of learned Counsel for the Appellant that since renewal of working capital limit was renewed for one year upto 25.07.2020, hence, the date of default is 25.07.2020, has no basis and is to be rejected.
The application under Section 7 filed by Canara Bank was not barred by Section 10A as contended by the Appellant. The Adjudicating Authority having found the debt and default, has rightly proceeded to admit Section 7 Application. In paragraph 16 of the order, the Adjudicating Authority has noted all relevant factors to be considered in Section 7 Application and has proceeded to answer the said issues in favour of the Financial Creditor.
The are no error in the impugned order passed by the Adjudicating Authority admitting Section 7 Application. There is no merit in the Appeal - appeal dismissed.
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2024 (5) TMI 626
Rejection of prayer of Operational Creditor to initiate the CIRP against the Corporate Debtor/ Respondent - Respondent did not respond to the demand notice under Section 8 of the IBC - Operational Creditors or not - breach of terms and conditions of the contract leading to pre-existing dispute.
Whether the appellant is an Operational Creditor as per IBC? - HELD THAT:- In the present case, the appellant had placed an advance with the respondent for supply of goods, it does not matter who is the supplier or the receiver of goods and services as laid down in the M/s Consolidated Construction Consortium Ltd. [2022 (2) TMI 254 - SUPREME COURT] - The present case is squarely covered by the said judgment, as there is a clear nexus between payment made and supply of goods and services. Accordingly, the appellant is to be treated as Operational Creditor in the instant case.
Whether there has been a breach of terms and conditions of the contract leading to pre-existing dispute? - HELD THAT:- It is clear from all the documents on record that the delivery was to be made Ex-plant Rajkot and not at Hong Kong as submitted by the appellant before the Adjudicating Authority. The appellant had tried to mislead both the forums regarding the same - All the events reflect clearly that there was a pre-existing contractual dispute between both the parties, which the appellant is trying to settle through IBC mechanism.
In this regard reliance placed on Mobilox Innovations (P) Ltd. v. Kirusa Software (P) Ltd. [2017 (9) TMI 1270 - SUPREME COURT], where the Hon’ble Supreme Court explained the process for an operational creditor initiating CIRP in respect of a corporate debtor. The Court held 'Within a period of 10 days of the receipt of such demand notice or copy of invoice, the corporate debtor must bring to the notice of the operational creditor the existence of a dispute and/or the record of the pendency of a suit or arbitration proceeding filed before the receipt of such notice or invoice in relation to such dispute [Section 8(2)(a)]. What is important is that the existence of the dispute and/or the suit or arbitration proceeding must be pre-existing i.e. it must exist before the receipt of the demand notice or invoice, as the case may be.'
In the instant case, there was a pre-existing dispute between the parties regarding contractual conditions relating to place of delivery and obligation of parties for transport of goods and therefore the application for CIRP against Corporate Debtor cannot be allowed. The matter has been correctly decided by the Adjudicating Authority in this regard.
Appeal dismissed.
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2024 (5) TMI 625
Initiation of CIRP - Rejection of Section 9 application - cyber fraud committed against the Respondent - pre-existing disputes or not - HELD THAT:- Since the fraud was perpetrated by unknown third parties, dragging the Operational Creditor into the dispute was a simple and deliberate ploy on the part of the Corporate Debtor to evade payment of liabilities. The pre-existing dispute was a fictional dispute and more of an after-thought. Moreover, it has been contended that even after having become a victim of cyber fraud, the fact that the Respondent had willing paid further sums of money to the Appellant in their Nordea Bank account shows that there was no dispute between the two parties with respect to the operational debt being due and payable.
When the Respondent in their police complaint had expressly admitted that the fraud was committed by an unknown third party and not by the Appellant and did not make the Appellant an accused party in their police complaint, the cyber fraud and the related police complaint cannot constitute evidence of a pre-existing dispute inter se between the Operational Creditor and Corporate Debtor - Since the matter is already under police investigations and there is no finality in the matter, attributing any culpability on the employees of the Operational Creditor based on surmise and conjecture of the Corporate Debtor would be pre-mature and highly presumptuous given the summary jurisdiction of the Adjudicating Authority and this Appellate Tribunal. It is not required to examine the above contention of the Respondent that the perpetrators of the cyber fraud were assisted by employees of the Operational Creditor.
There is force in the contention of the Appellant that since the Corporate Debtor and the Operational Creditor were in a long-standing business relationship, had the Corporate Debtor shown professional diligence and due rigour, they would have been able to easily detect the suspicious emails and averted the ensuing cyber fraud. This clearly shows the negligence and carelessness on the part of the Respondent which led to the cyber fraud - the Adjudicating Authority wrongly dismissed the Section 9 application, in complete disregard of evidence on record, by treating the cyber-fraud as a preexisting dispute between the parties while being singularly oblivious of the role of unknown third-party perpetrators which cast serious doubts on the plausibility of dispute inter se between the Appellant and the Respondent.
The very fact that much after the issue of the Demand Notice, an amount of Euro 49,664/- has been claimed to have been paid by the Corporate Debtor to the Appellant as stated in their Reply Affidavit as placed at pages 26-27 shows that they have acknowledged that outstanding operational debt qua the Appellant was payable by them. Furthermore, we find that in the said Reply affidavit of the Respondent, the Respondent has accepted and admitted that it owed the Appellant a sum of Euro 62,222/-. This acknowledgement in itself is sufficient to satisfy existence of undisputed operational debt exceeding the threshold level of Rs.1 lakh.
The Adjudicating Authority has erroneously rejected the application under Section 9 of IBC - To meet the ends of justice, the Corporate Debtor is given the liberty to release payment of outstanding operational debt as per terms mutually agreed between the two parties - the payment shall be released by the Corporate Debtor by way of Demand Draft in favour of the Operational Creditor within 30 days from the date of uploading of this order failing which the Corporate Debtor would come under the rigours of CIRP on the expiry of said 30 days period.
Appeal alowed.
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2024 (5) TMI 570
Admission of Section 7 Application - default committed by Corporate Debtor in paying the amount due and payable - Non-performing assets - existence of debt and default or not - liability not denied - HELD THAT:- There is no dispute to the outstanding amount due on the Corporate Debtor. Sequence of events clearly indicate that at no stage Corporate Debtor has denied its liability. In reply to the notice under Section 13, sub-section (2) of the SARFAESI Act, the Appellant cited reasons for not making the payment, but liability to make payment was not denied. The Adjudicating Authority by the impugned order has found that Financial Creditor has been able to establish the factum of existence of financial debt and its default. The finding recorded by the Adjudicating Authority that there is a financial debt, which is in default, does not warrant any interference by this Tribunal in the present Appeal. Debt and default having been proved, the Adjudicating Authority has rightly admitted Section 7 Application filed by the Financial Creditor.
Thus, no grounds have been made out to interfere with the impugned order in the present Appeal. There is no merit in the Appeal. The Appeal is dismissed.
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2024 (5) TMI 526
Admissibility of section 9 application - initiation of CIRP - operational debt claimed by RCL was due and payable or not - if any default thereto was committed by the Respondent No.1/BJCL - As claimed debt were paid before the admission of CIRP application - Respondent claimed the dues of GST are still pending - HELD THAT:- In the case of Section 9 application, it is necessary for the Operational Creditor to indicate the particulars of the crystallised debt qua the Corporate Debtor. From the given particulars in the Section 8 demand notice, it is clear that the total amount of operational debt claimed by RCL is Rs.1,96,96,325/- of which the principal amount for non-supply of cement clinker against advance was Rs.1,83,81,894/-. In addition, interest was claimed at the rate of 18% per annum from 11.04.2022 for 145 days amounting Rs.13,14,431/- only. In the Section 9 application, in Part IV also, the total amount of debt has been similarly shown as Rs.1,96,96,325/- only and interest has been calculated with effect from 11.04.2020 to 02.09.2022. It is therefore an undisputed fact that the crystallised amount of operational debt is Rs 1.96 cr only including interest and we do not find any other sum included in Form 3 or Form 5 submitted by the RCL. It is an undisputed fact that RCL had never sought any GST amount in the Section 8 demand notice or Section 9 application or at any time when the matter was pending adjudication before the Adjudicating Authority.
The scheme of the IBC is to ensure that when a default takes place, in the sense that the debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt, once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount. On looking into the facts of the present case, there are no hesitation to opine that BGCL had already made payment of the entire operational debt as claimed by RCL in Section 8 Demand Notice and debt as reflected in Form 5 of Section 9 application.
In the factual matrix of the case at hand, when the dues in terms of Form 3 and Form 5 have been cleared by BJCL, endeavours on the part of RCL to seek initiation of CIRP by raising claims which do not find place in Form 3 and Form 5 filed by them, clearly manifests the intention of the RCL to invoke the provision of IBC to enforce recovery of debts against the Corporate Debtor. Allowing such claims which never formed part of the claim of operational debt before the Adjudicating Authority to be considered at the appeal stage is not tenable. This cannot be commended as it militates against the spirit and essence of IBC.
The Impugned Order of the Adjudicating Authority is set aside - Appeal allowed.
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2024 (5) TMI 470
Claim of appellant rejected on the ground that Resolution Plan has been approved by the CoC - right to claim consideration of claim again in third round - NOIDA’s status and claims - HELD THAT:- In view of the pendency of the Applications of the Appellant(s) before the Adjudicating Authority, which are yet to be adjudicated, it is not found necessary at this stage to enter into submission or express any opinion on merits. The approval of Resolution Plan by the CoC on 03.03.2020 being no more in operation and the SRA has to resubmit the Resolution Plan, as per direction of the Adjudicating Authority dated 05.03.2024 and has to include the claim of NOIDA as Secured Creditor with respect to other Applications, which are pending consideration, it is appropriate that resubmission of the Plan by SRA should await the disposal of those Applications. Applications, including Applications for acceptance of the claim, which although are belated claims, it is for the Adjudicating Authority to consider the Applications and take a decision as to whether the said claims have to be included or not.
The learned Counsel for the Appellant has also referred and relied on the judgment of this Tribunal in PUNEET KAUR VERSUS KV DEVELOPERS PRIVATE LIMITED, MR. PANKAJ NARANG, COMMITTEE OF CREDITORS, CONSORTIUM OF SUMIT KUMAR KHANNA AND M/S. BRIJ KISHORE TRADING PVT. LTD. [2022 (6) TMI 108 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI], where this Tribunal held that even if the homebuyers has not filed the claim within the time, the RP is under obligation to include the claims, which are reflected in the records of the Corporate Debtor.
The applications by different Applicants including these two Appellant(s) being pending consideration, at this stage, it is not necessary for this Tribunal to express any opinion on the merits of the Applications, which are pending adjudication before the Adjudicating Authority. As observed, resubmission of the Resolution Plan by the SRA has to await the decision of all other Applications, which was deferred by the Adjudicating Authority for consideration on 30.04.2024, as per order dated 05.03.2024 itself. There is no doubt that claim of the NOIDA has to be considered as per the direction dated 05.03.2024 as Secured Creditor, but since other Applications are still pending, the ends of justice will be served in disposing of these Appeal.
The order passed by Adjudicating Authority is not being interfered with - Adjudicating Authority may consider and dispose of the Applications as noted in the order dated 05.03.2024, which were deferred for consideration on 30.04.2024 at an early date - petition disposed off.
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2024 (5) TMI 469
CIRP - Admissibility of Section 95 Applications against Personal Guarantors - discharge the liabilities of Personal Guarantors on approval of Resolution Plan - submission of the Appellant that since the entire debt has been assigned to SPV, personal guarantees against the Appellant could not have been invoked, has been considered and rejected by the Adjudicating Authority by the impugned order - time limitation - HELD THAT:- The judgment of the Hon’ble Supreme Court in LALIT KUMAR JAIN VERSUS UNION OF INDIA AND ORS. [2021 (5) TMI 743 - SUPREME COURT] has categorically laid down that approval of Resolution Plan does not ipso facto discharge the liabilities of Personal Guarantors.
The judgment of this Tribunal in UV Asset Reconstruction Company Limited vs. Electrosteel Castings Limited [2024 (3) TMI 804 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] is considered where one of the questions arose as to whether by approval of Resolution Plan, entire debt of the Corporate Debtor stood extinguished and as a result there will be no default. It was held by this Tribunal that even after approval of Resolution Plan, recourse against third party can be resorted to and the approval of Resolution Plan, does not extinguish the right of Financial Creditor to proceed against third party.
The Adjudicating Authority by the impugned order has admitted Section 95 Applications, upholding the initiation of proceeding under Section 95 by the SBI. The Adjudicating Authority has rightly returned a finding that the Resolution Plan of Corporate Debtor was approved and the entire debt of the Corporate Debtor has been taken over by the Successful Resolution Applicant, but the guarantee given by the Promoters has not been assigned to SRA. The Adjudicating Authority also held that Application was filed within limitation. The date of default mentioned in the Application was 23.01.2019 and the petition under Section 95 was filed on 22.05.2021.
There are no error in the order of the Adjudicating Authority, admitting Section 95 Applications by the impugned order. There is no merit in any of the submissions of the learned Counsel for the Appellant(s) - appeal dismissed.
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2024 (5) TMI 424
Seeking initiation of Corporate Insolvency Resolution Process (CIRP) - proof of existence of financial debt - incidence of default or not - HELD THAT:- For any creditor to become financial creditor under Section 5(7) of IBC, there must be a financial debt which is owed to that person and such a person can either be the principal creditor to whom the financial debt is owed or may be a legal assignee to whom such debt has been transferred. Furthermore, for a debt to become financial debt under the various transactions stated in subclauses (a) to (i) of Section 5(8) of IBC, the basic non-negotiable ingredients are that there has to be a disbursal against the consideration for time value of money - If there is a financial debt, which is more than the prescribed threshold level and there is a default and if the application is complete, the application is required to be admitted by the Adjudicating Authority. It is for the Adjudicating Authority to look into the various documents, records and evidence of default as furnished in Part V of Form 1 of the application filed under Section 7 of IBC.
There is no balance confirmation of the alleged unsecured loan coupled with admitted fact that the receivables due from the Corporate Debtor was no longer reflected separately in the balance sheet of IIL from 2017-18 onwards, we are of the view that the Adjudicating Authority has not erred in holding that confirmation letter of 25.05.2014 lacks relevance and cannot be relied upon to establish debt - there are no cogent reasons to differ with the findings of the Adjudicating Authority that debt and default on the part of the Corporate Debtor has not been brought out in clear, precise and specific terms which is the mandate of Section 7 of IBC.
Nothing has been placed on record either by the Appellant to substantiate that the disbursement had been made for consideration for time value of money. There are no good reasons to disagree with the findings of the Adjudicating Authority that the facts of the present case are such that the debt qua the Appellant lack the trappings of a financial debt and that it had become due and payable and that there has arisen non-payment of the same beyond the threshold limit.
The Adjudicating Authority did not commit any error in rejecting the Section 7 application filed by the Appellant. The impugned order does not warrant any interference - Appeal dismissed.
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2024 (5) TMI 423
Maintainability of appeal - CIRP - Aggrieved person or not / Locus Standi of minor operational creditor - It is submitted that the Appellant has 00.54 % share as an operational creditor and would fall much lower in the scale of Section 53 of IBC - HELD THAT:- The Appellant was represented through GE International Inc. i.e. representative of the operational creditors appointed in terms of Regulation 31A(3) of the Regulations in the SCC of the CD. No objection to the draft report was filed by any of the members of the SCC of the CD and valuation reports were accepted. It is also pertinent to mention that the main stakeholders in the SCC are the financial creditors which includes the banks, LIC etc. having 95% share but they have not raised any objection about the valuation. Moreover, all the bidders were given access to the VDR which contained the entire description of the parcel of land put up for auction, therefore, the Appellant cannot agitate that the number of parcels of the land were not categorically mentioned. There was no objection by the Appellant to the sale which was conducted though first five auction and no effort was made by the Appellant to file any application for intervention even before the Adjudicating Authority when the present two applications were taken up for hearing and decided.
By no means, the Appellant can be termed to be a person ‘aggrieved’ for the purpose of invoking Section 61 of the Code to present these appeals to challenge the impugned order especially when no other member of the SCC has challenged the same.
The Appellant has no locus standi to maintain the present appeals and their appeals deserves to be dismissed on this premise only but it is also observed that the sale which has been conducted by Respondent No. 1 is after following due process of law which have been described in the facts mentioned in the earlier part of this order and there is no error in selling the property in the e-auction to the sole bidder.
There is hardly any merit in the present two appeals which requires any interference by this Court and the same are hereby dismissed.
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2024 (5) TMI 422
Approval of the resolution plan - Classification of the claim - Claim as contingent due to pending litigation - treatment meted out to the operational creditors in the resolution plan which has been approved by the Adjudicating Authority - HELD THAT:- As per the chart as against the admitted claim of the secured financial creditors of Rs. 120,129,831,567/- the amount provided in the resolution plan is Rs. 2500 Cr. which is only to the extent of 20.098 %, therefore, the claim of the unsecured creditors or operational creditors has rightly been provided as Nil because the amount which has been offered in the resolution plan is to be first appropriated towards the CIRP costs and dues owed to the secured financial creditors and then nothing would come to the kitty of the operational creditors, therefore, even the unsecured creditors have also been given as NIL.
As regards admitting the claim of the Appellant as contingent against Rs. 1 is concerned, this is not in dispute that the claim is based upon an order of the statutory authority against which an appeal is pending and it is not crystallised as such so far, thus in view of the decision of the Hon’ble Supreme Court in the case of COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT] in which it has been held that “we therefore hold that this part of the impugned order judgment deserves to be set aside on the ground that the resolution professional was correct in only admitting the claim at a notional value of Rs. 1 due to the pendency of disputes with regard to these claims.”
There are no merit in the present appeal and the same is hereby dismissed.
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2024 (5) TMI 421
Rejection of application filed for extension of time for the purposes of completion of the Insolvency Resolution Process - extension beyond 330 days - unnecessarily the proceedings were adjourned at the behest of the Financial Creditors - Section 12 of I & B Code, 2016 - Resolution Plans have been submitted by the Home Buyers or not - approval of Resolution Plan by Committee of Creditors - HELD THAT:- In accordance with the principle, laid down by the Judgment of the Principal Bench of NCLAT in [2022 (1) TMI 166 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI], the `Tribunal’, was conscious of the fact that in those case too, it was contended that no Resolution Plan was received and the Committee of Creditors, had declined the request of the Resolution Professional to undertake the Projectwise Resolution Process, but, ultimately, based upon the finding recorded as above and particularly from the perspective of the interest of the Stakeholders.
Owing to the aforesaid and particularly looking to the vital interest of the Home Buyers, the respective `Company Appeals’, would stand `Allowed’ - The Impugned Order / Judgment dated 26.04.2023, in each of the Company Appeals are hereby quashed - The appeal as preferred iis hereby allowed, consequently further extension for a period of 90 days as prayed for, in the aforesaid Application, is granted to the Resolution Professional, to complete the Insolvency Proceedings - no further extension henceforth would be granted - it is apt to observe that this `Tribunal’, is not venturing into the merits of any of the Claims of Home Buyers, which is yet to be independently considered in the voting of the Committee of Creditors exclusively on its own merits, except for the issue of extension of time period, this `Tribunal’ has not delved with any other action.
Appeal allowed.
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2024 (5) TMI 382
Doctrine of subrogation - Allowing recourse to the Financial Creditors against the Personal Guarantors of Asian Colour Coated Ispat Limited - Resolution Plan approved - it was held by NCLAT that 'commercial wisdom of the CoC has been given supremacy and no grounds exist for the Adjudicating Authority or Appellate Tribunal to interfere' - HELD THAT:- There are no error in the NCLAT - appeal dismissed.
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2024 (5) TMI 381
Validity of Resolution Plan - classification as made in Resolution Plan between payment to employees, is discriminatory and violative of provisions of Section 30, sub- section (2) of the Code or not - it was held by NCLAT that The distribution to the employees, whose liquidation value was ‘NIL’ falls within the commercial wisdom of the CoC and the said clause of Resolution Plan cannot be impugned on the said ground, nor the said proposal for payment is violative of Section 30, sub-section (2) (b) of the Code.
HELD THAT:- There are no substantial question of law arises in this Appeal - appeal dismissed.
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2024 (5) TMI 380
Admissibility of CIRP u/s 9 of the IBC - petition filed without delivery of a demand notice under Section 8 of the IBC - Appellant is liable to pay the outstanding dues to the Operational Creditor or not - existence of debt or not - time limitation - HELD THAT:- There is no tripartite agreement on record which could have guided the mode and responsibilities of payment. Without any agreement in place, in the facts of the instant case, the responsibility to repay the outstanding dues remains on the Appellant. As the IBC proceedings are self-contained which govern the course of action in such situations, the Appellant cannot take refuge of Section 230 Indian Contract Act, 1872 that the “agent cannot personally enforce, nor be bound by, contracts on behalf of principal” and pass on its liability to VIL.
Validity or otherwise of the service of Demand notice - HELD THAT:- Demand notice dated 31.07.2018 was sent by registered post on 01.08.2018 to the registered address of the Corporate Debtor, which was not replied to by the Corporate Debtor. Some documentary evidence is available on record, which includes the details of the India Post and the postal receipt, which indicate that the demand notice has been issued, even though the addresses are not fully legible and correct in the receipt and acknowledgement. This will not make any material difference as both parties have been dealing in business for long and were continuously exchanging lot of emails - Furthermore, the Applicant never disputed the address on which the demand notice was issued to the Corporate Debtor. But it has merely questioned the failure of proof of the service of the statutory demand notice, which appears to be spurious granted and unsustainable.
The Adjudicating Authority has clearly brought out that as per records, the date of default is 12.12.2015. The TMPL acknowledged the debt and paid certain invoices and also facilitated in barter arrangement in the year 2017. Later on, there is an admission of liability by way of emails dated 21.07.2017 and again on 18.09.2017, which amounts to the admission of liability. Since there is an admission of liability on 18.09.2017, their cannot be any question of claims to be time barred as the period of limitation starts afresh from the date of admission of 18.09.2017. There is a clear admission with respect to the unpaid invoices / outstanding dues by the Corporate Debtor, with no dispute or denial of any kind.
It is clearly brought out that there is a debt in terms of Section 5(21) of the Code and that there is also a default in terms of Section 3(12) of the Code and also the debt is within the period of limitation and there is no dispute raised at any point of time. Therefore, the Adjudicating Authority has rightly come to the conclusion that it satisfies the requirement for admission under Section 9 for Corporate Insolvency Resolution Process.
There are no error in the orders of the Adjudicating Authority - appeal dismissed.
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2024 (5) TMI 332
Rejection of claim filed by appellant - Role of the Liquidator - Appellant states that the Respondent / CD, did not perform its part of the contract from its inception and did not establish the letters of credit as contemplated - HELD THAT:- It is the Appellant’s case that the CD having awarded the purchase order and the work order failed to honor its obligations and therefore, the Appellant could not get the expenditure incurred by it on these accounts to the tune of Rs.31.71 crore from the CD and therefore, it should be considered a debt due to be repaid by the CD and that the RP having admitted an amount of Rs.13.47 crore, payable by CD, to the Appellant, later changed his position to Rs.1.51 crore, as receivable from the Appellant to CD in contravention of the provisions of Insolvency and Bankruptcy Code, 2016 and the Liquidation Regulations.
The Respondent / Liquidator fairly addresses these points by stating that the items of claim not admitted by her as ‘due payable’ are those for which no documents such as invoice / dispatch documents were available in the records of CD and which were not also provided by the Appellant. She has also fairly answered the point by stating that the disallowed claims could be due to non-performance of CD which will require adjudication by a competent Civil Court / Arbitrator, before they can be translated into ‘Dues’ within the framework of IBC and has cited the relevant law in form of a decision by the Hon’ble Apex Court to support her assertion. It is also seen that the Respondent / Liquidator has given sufficient reasons for disallowing the claim of the Appellant in her letter to the Appellant.
It is also seen that the AA / NCLT, Hyderabad have dealt on these issues in detail and given succinct reasons as to why they have accepted the submission and reasoning of the Liquidator as to why she has rejected the claim of the Appellant. They have rightly held that when claim and counter claims are involved Liquidator cannot decide the same and therefore the Liquidator rightly rejected the claim.
The appeal is devoid of merits and deserves to be dismissed and is accordingly dismissed.
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