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IBC - Case Laws
Showing 381 to 400 of 9149 Records
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2024 (5) TMI 331
Seeking to Condone Delay of 14 days in filing the Appeal - Sufficient cause for delay or not - HELD THAT:- It is seen that the Respondent has at least offered the index of the typed set of papers annexed to the Appeal before NCLAT and the Application filed before NCLT to support his contention. On the other hand, the Appellant has not shown a single document which as per his claim took a long time to trace and collect. This makes to come to the conclusion that ‘sufficient cause’ has not been demonstrated to merit condonation of delay of 14 days beyond the 30-day period.
The Appellant has cited a number of decisions of Hon’ble Supreme Court to support his plea that a liberal approach be adopted for condonation of delay even in matters arising under the IBC. In this matter, it is said that the objective of IBC is to ensure timely resolution of insolvency and accordingly provisions have been put in place including strict timelines for the legal and administrative processes and therefore, adopting a liberal approach, needless to say, will defeat the objectives of the Code and will run counter to the view expressed in V NAGARAJAN VERSUS SKS ISPAT AND POWER LTD. & ORS. [2021 (10) TMI 941 - SUPREME COURT].
The Company Appeal is not ‘entertained’, and hereby ‘Rejected’.
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2024 (5) TMI 278
Impleadment of the appellant bank as Proposed 2nd Respondent, in main Company Appeal - necessary/proper party - petitioner having exclusive charge over the Superstructures built by the 1st Respondent / Appellant, on the Land of the Corporate Debtor - HELD THAT:- This Tribunal, pertinently points out that the Petitioner / Bank, in its Sanction Letter, dated 30.03.2011, had stated that, it has a Pari Passu Charge, only, on the Superstructures, built on the Land of the Corporate Debtor. Even the Form D, dated 06.08.2022 of the Petitioner / Bank, furnished with the Liquidator, as a Financial Creditor of the Corporate Debtor, unerringly points out that the Petitioner / Bank, does not have a Exclusive Charge, over the Superstructures, built upon the Land of the Corporate Debtor.
It cannot be brushed aside that the Asset, subject to such Security Interest, Viz. the subject matter of the present Lis, was already relinquished by the Petitioner / Bank, in to the Liquidation Estate of the Corporate Debtor, by their own admission.
To bring a Person as a Party Respondent / Defendant, in a given Legal Proceedings, is not a Substantive Right, but One of Procedure.
The instant main Company appeal hovers around the issue of Eviction, of the 1st Respondent / Appellant, from the ‘Land’ of the ‘Corporate Debtor’, even though, the ‘Lease Deed’, dated 30.09.2017, which had expired on 30.09.2022, and further that, the Petitioner / Bank, has a ‘Pari Passu Charge’, in respect of the ‘Superstructures’, built on the ‘Land’ of the ‘Corporate Debtor’, and in any event, the ‘Petitioner / Bank’, nor the ‘1st Respondent / Appellant’, cannot place reliance, on the alleged ‘Rental Deed’, this ‘Tribunal’, comes to an ‘irresistible’ and ‘inevitable’ conclusion, that the ‘Petitioner / Bank’, is not a ‘Necessary and Proper Party’, to get itself ‘Impleaded’, in the main Company appeal.
Appeal dismissed.
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2024 (5) TMI 207
Failure to deregister Aircraft(s) in contravention of Sub-Rule (7) of Rule 30 of the Aircraft Rules, 1937 - requirement of consent of the lessee prior to deregistration and export of an Aircraft - mandate of Rule 30(7) of the Aircraft Rules - termination arising out of or as a consequence of Insolvency or not - applicability of provisions of the IBC or not - disturbance to possession during moratorium - applicability of principles of Dura lex sed lex - HELD THAT:- IDERA is an acronym for an Irrevocable De-Registration and Export Request Authorisation. It operates under Article XIII of the Cape Town Protocol and provides that the Petitioner/Lessor is the sole person entitled to procure the deregistration of the Aircraft by the Respondent/DGCA and to procure and physically export the Aircraft from India. The table in Paragraph 3.2 above, contains the date on which each IDERA has been furnished by Respondent/Go Air to the Petitioners/Lessors.
Undisputedly, the Petitioners/Lessors in the present case are the IDERA Holders in respect of all 54 Aircraft which form the subject matter of the present Petitions.
The purport of Rule 30 (7) of the Aircraft Rules has been dealt with by a Coordinate Bench of this Court in the Awas case [2015 (3) TMI 1427 - DELHI HIGH COURT]. After analysis of the provisions of the Aircraft Rules, the Court in the Awas case, held that the Respondent/DGCA has to proceed in accordance with Rule 30 (7) of the Aircraft Rules which is a mandatory requirement and the Court cannot interfere even on grounds of equity; keeping in mind, the protection of private business transaction law in India, international conventions such as Cape Town Convention must be followed. It was held that the disputes qua validity of the termination of the lease are not relevant for the purposes of deregistration and the contention that public interest will be impinged if the deregistration is granted is not a valid ground for refusal - An argument made in the Awas case that the entitlement of the Petitioners/Lessors to terminate the Lease Agreements would require determination by a competent Court of law, was also repelled by the Court as being misconceived in view of the provisions of the Cape Town Convention and Cape Town Protocol.
While Rule 30(6) of the Aircraft Rules uses the term “may”, Rule 30(7) of the Aircraft Rules uses the term “shall be cancelled”. This signifies that the legislative intent that by use of the word “shall”, the intention was to make Rule 30(7) of the Aircraft Rules, mandatory. This Court concurs with the judgment of a Coordinate Bench of this Court in the Awas case. The Respondent/DGCA is thus, mandatorily required to cancel the registration subject to the fulfilment of the documents and conditions as set forth in Rule 30(7) of the Aircraft Rules.
Jurisdiction of High Court under Article 226 of the Constitution vis-à-vis NCLT/NCLAT a creature of Statute – No power of Judicial Review - HELD THAT:- The NCLT and the NCLAT are statutory bodies constituted under the provisions of Sections 408 and 410 respectively of the Companies Act, 2013 and have the powers to adjudicate upon matters which relate to the IBC. The NCLT is created under the IBC and its jurisdiction therefore is limited to the extent as provided under the IBC. The NCLT cannot assume control over other government authorities in the realm of public law. The scope of Section 63 and Section 231 of the IBC is restricted to matters which the NCLT or the NCLAT have jurisdiction.
In fact, recognising this limitation, the NCLAT has in a judgment, titled as Canara Bank v. Deccan Chronicle Holdings Limited [2017 (10) TMI 856 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], while modifying an order passed by the NCLT, held that the power of the Supreme Court and the High Court under Article 32 and 226 of the Constitution, respectively, cannot be curtailed by any provision of an Act or Court and further held that the moratorium would not affect the High Court under Article 226 of the Constitution - The NCLT does not have the authority to assume the jurisdiction exclusively conferred on the High Courts and the Supreme Court and which cannot be curtailed by any statute.
No Nexus between Deregistration and Insolvency - HELD THAT:- On an analysis of the GUJARAT URJA VIKAS NIGAM LIMITED VERSUS MR. AMIT GUPTA AND ORS. [2021 (3) TMI 340 - SUPREME COURT] case, it is clear that the primary reason for termination of the agreement between the parties in that case was the initiation of insolvency proceedings. Paragraph 71 of the Gujarat Urja case, has held that in the absence of the insolvency of the corporate debtor, there was no ground to terminate the Power Purchase Agreement between the parties - The Supreme Court in the Gujarat Urja case further clarified that where a decision of a private party has been taken solely on account of the initiation of the insolvency, such a decision, not being one taken, in the public law domain, such as in the Embassy case, is distinguishable.
The proceedings before this Court, indisputably are the Applications for deregistration and export (in some cases) of the Aircraft. Various prayers have also been made for the protection of the Aircraft. These do not solely arise from the insolvency of the Respondent/Go Air.
Breach of Binding Lease Agreements – Non-payment of Lease Rentals - HELD THAT:- The fact that there was default of payment by Respondent/Go Air has not been disputed by Respondent/RP of Go Air. In fact, Respondent/RP of Go Air has laid the blame for non-payment of lease rentals in time on an American Company called “Pratt and Whitney” and on account of their supplying defective engines for the Aircraft. This averment was, however, not supported by any document. In any event, this cannot absolve the Respondent/Go Air of its obligations under the Lease Agreements entered into by them for each of the 54 Aircraft - Thus, clearly Respondent/Go Air had failed to fulfil its obligations under the Lease Agreements which resulted in the issue of default notices to them and subsequently to the termination of the Lease Agreements.
The termination has neither arisen out of nor relating to the insolvency but on account of breaches to the Lease Agreements which occurred much prior in time to the Insolvency Commencement Date - concededly, as per Respondent/RP of Go Air as well, the insolvency has arisen out of defaults in payment and the inability of Respondent/Go Air to continue its commercial operations in view of these defaults.
Applicability of the TATA Consultancy case - HELD THAT:- While holding that it is settled law that the IBC is a complete code, it was held in TATA CONSULTANCY SERVICES LIMITED VERSUS VISHAL GHISULAL JAIN, RESOLUTION PROFESSIONAL, SK WHEELS PRIVATE LIMITED [2021 (11) TMI 798 - SUPREME COURT] that the NCLT in its residuary jurisdiction has the power to stay the termination of the Agreement albeit, only if it satisfies the criteria laid down in the Gujarat Urja case - The Supreme Court in the TATA Consultancy case has also observed that while examining prayers for interim relief, the NCLT and NCLAT must keep in mind the exception crafted by the Court in the Gujarat Urja case. The order of NCLT does not indicate that the NCLT had applied its mind to the centrality of the facilities agreement and the corporate debtor survival as a going concern.
Concededly, the termination has not been challenged by Respondent/Go Air or by Respondent/RP of Go Air in any judicial forum. As discussed above, the termination of the Lease Agreements between the Petitioners/Lessors and Respondent/Go Air was on account of breaches of the Lease Agreements which included non-payment of the lease rentals over extended period of time - The ratio of the Tata Consultancy case thus, squarely applies in the facts of the present case. The termination thus, does not arise out of the insolvency and is certainly not a consequence of the insolvency. The provisions of Section 60(5) of the IBC cannot be deemed to be applicable in the present case.
Cape Town Convention vis-à-vis the IBC - HELD THAT:- There is no inconsistency between the provisions of moratorium under Section 14 of the IBC and the Aircraft Rules. The Cape Town Convention and the Cape Town Protocol on Aircraft as applicable to India in terms of the Declaration of Accession adopts a procedure for insolvency and the steps to be taken with respect of any Aircraft, Airframes and related objects. In any event, my ambiguity on this issue has been done away with by the MCA Notification, which makes it abundantly clear that aircraft, aircraft engines and airframes are excluded from the purview of the provisions of the IBC. This is, therefore a moot issue now which does not require to detain this Court further.
MCA Notification dated 03.10.2023 - Prospective or Retrospective - HELD THAT:- The MCA Notification has been issued to cure a lacuna in the existing law which will benefit the community. The legislative intent of the MCA Notification can also be seen from a reference to the Cape Town Convention and Cape Town Protocol and the date of accession by India – all of which form part of this notification. The timing of the notification also assumes significance here. It cannot be deemed to be a co-incidence that the MCA Notification is close upon the heels of the controversy at hand. This is, thus, clearly to cure a lacuna which has been highlighted by the disputes between the Petitioners/Lessors and Respondent/Go Air. The circumstances surrounding the MCA Notification thus, all point to its retrospectivity.
Keeping in mind the scope and purview of the Aircraft Act and Rule 30(7) of the Aircraft Rules and given the fact that India is a signatory to the Cape Town Convention and Cape Town Protocol since 31.03.2008 and at the time of its adoption of the Declaration of Accession has clearly agreed to the adoption of “Alternative A” of Article XI of the Cape Town Protocol for “remedies on insolvency”, this Court is of the considered view, for the reasons stated herein, that the words “aircraft, aircraft engines, airframes” ought to have been included in sub-Section (3) of Section 14 of the IBC from the date the sub-Section came into force, so as to ensure implementation of procedure set forth therein for remedies on insolvency in relation to Aircraft which form the subject matter of these Petitions.
Effect of Delay in the MCA Notification - HELD THAT:- A combined reading of Article XI “Alternative A” of the Cape Town Protocol along with Rule 30(7) of the Aircraft Rules reflects that aircraft, aircraft objects, airframes and aircraft engines are be kept out of the purview of other legislations, and the provisions in relation to insolvency as set forth in Article XI “Alternative A” be applied in its entirety. The MCA Notification, thus in that sense was delayed. In light of the judgment of the Nasa Finelease case [2013 (9) TMI 733 - DELHI HIGH COURT], this delay cannot come in the way of a beneficiary to such a notification. Thus, the MCA Notification merits acceptance and should be given retrospective effect - this Court holds that the MCA Notification is held to be retrospective in its effect.
NCLT has no power to deregister the Aircrafts, powers can only be exercised by a High Court - HELD THAT:- The Petitioners/Lessors are the IDERA holders in respect of all Aircraft. Indisputably, the Cape Town Convention and Cape Town Protocol apply to these Aircraft. The Respondent/DGCA has not placed on record any communication setting forth the deficiencies in the documents filed by the Petitioners/Lessors for deregistration. The Respondent/DGCA is bound to act within the mandate of the Aircraft Act and Aircraft Rules to deregister the Aircraft - since all the pre-conditions as set stand satisfied, subject to removal by the any deficiencies in the Deregistration Application by Petitioners/Lessors, the deregistration of the 54 Aircraft is to be proceed with by the Respondent/DGCA.
Possession of Aircraft with Respondent/Go Air cannot be disturbed - HELD THAT:- Placing reliance on the judgement of the Supreme Court in the TATA Consultancy case, this Court had already ruled that Section 60(5) of the IBC is not applicable in the circumstances of the present case as the termination does not arise ‘solely’ on account of the insolvency. In addition, the Respondent/RP of Go Air’s claim for possession or occupation of the Aircraft under Section 14(1)(d) of the IBC has been exercised after the Lease Agreements of the Aircraft had been terminated. The Insolvency Commencement Order was passed after the Lease Agreements were terminated. The termination has remained unchallenged by the Respondent/RP of Go Air. Thus, Respondent/Go Air acting through the Respondent/RP of Go Air, cannot be permitted to retain possession of the Aircraft.
Dura lex sed lex - the law must be upheld - HELD THAT:- No doubt, the return of the Aircraft would cause hardship to the corporate debtor, i.e. Respondent/Go Air. This, however, cannot be used as a defense to not deregister the Aircraft(s). The Supreme Court in Popat Bahiru case [2013 (8) TMI 930 - SUPREME COURT] has held that although a statutory provision may impose hardship or inconvenience on a specific party, the Court is obligated to uphold and enforce the law without exception. The principle of "dura lex sed lex" applies here, emphasising that the law, no matter how harsh, must be upheld. The Courts have consistently maintained that inconvenience of a party alone cannot outweigh the legal obligation to interpret and apply statutes faithfully, even if it leads to perceived hardship.
The impugned rejection letters / communications dated 11.05.2023, 12.05.2023 and 19.05.2023 issued by the Respondent/DGCA declining to process the Deregistration Applications of the Petitioners/Lessors are set aside - The Respondent/DGCA shall forthwith and no later than the next five working days process the Deregistration Applications as filed for the following Aircraft in terms of Rule 30(7) of the Aircraft Rules.
Petition disposed off.
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2024 (5) TMI 205
Reconsideration of Resolution plan - It is submitted that in order to ensure that ‘no serious prejudice’, is caused to the ‘Petitioners / Appellants rights’, and the same are not rendered ‘Fait Accompli’, it is just and necessary to secure the differential amount and deposit the same in an ‘Escrow Account’. - HELD THAT:- On a careful consideration of the respective contentions, advanced on either side, this ‘Tribunal’, keeping in mind the ‘Orders’, passed by this ‘Tribunal’ to the effect that ‘in the meanwhile, any ‘Order’ passed by the ‘Tribunal’, at Hyderabad, shall be subject to the final outcome of this ‘Appeal’, in the meantime, the ‘Plan Approval Proceedings’, to be undertaken by the ‘Tribunal’, shall be subject to the final outcome of the present appeal’, and apart from the same, to safeguard the interests of the ‘Petitioners / Appellants’, pending final decision of the main Comp. App, quite in the fitness of things, simpliciter, on the basis of ‘Fair Play’, ‘Good Conscience’, to avoid any further complications / wider implications / ramifications and to prevent an ‘Aberration of Justice’, in the subject matter in issue, passes an ‘Order’, in directing the ‘Respondents’, to place an ‘amount of Rs.543.28 Crores’, being the amount equivalent to the difference between ‘Entitlement of the Petitioners / Appellants’, in an ‘Escrow Account’, till the final determination of the main Comp. Appeal.
Appeal disposed off.
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2024 (5) TMI 204
Maintainability of application u/s 7 - time limitation - Financial debt or not - whether the Respondent / Financial Creditor cannot assume the character of Financial Creditor under Insolvency and Bankruptcy Code, (IBC) 2016 merely on basis of an Assignment Agreement and a Recovery Certificate issued by Debt Recovery Tribunal, Hyderabad? - loan classified as NPA.
Whether the NCLT has erred in holding that the liability arising out of the decree obtained in DRT-I, Hyderabad on 19.02.2019 and the consequent Recovery Certificate issued on 09.07.2019 is a financial debt within the meaning of section 5(8) of IBC, 2016? - Whether the FC / Respondent being the holder of such a decree and such Recovery Certificate, is entitled to initiate CIRP under section 7 of IBC, 2016 as on 24.10.2021 the date on which he filed the Application under section 7 of IBC, 2016 before NCLT, Hyderabad? - HELD THAT:- The appellant has cited 3 Judgments of NCLAT, namely Ashok Agarwal Vs Amitex Polymers [2021 (2) TMI 823 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI], Ishrat Ali Vs Cosmos Cooperative Bank Ltd. [2020 (3) TMI 1238 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] and Sushil Ansal Vs Ashok Tripathy & Ors. [2020 (8) TMI 396 - NATIONAL COMPANY LAW APPEALLATE TRIBUNAL, NEW DELHI]. In all these Judgments, NCLAT has taken the view that a Financial Creditor does not include the Decree holder within the definition of section 5(7) of IBC, 2016 and that the claimed amount is an adjudicated amount under a decree and not against a debt disbursed. The Respondent has countered the same by stating that matter has reached a finality with the decision of the 3-Judge bench the Hon’ble Supreme Court in the case of Kotak Mahindra Bank Limited Vs A. Balakrishnan [2022 (6) TMI 13 - SUPREME COURT] - With this ruling it is crystal clear that a liability in respect of a claim arising out of a Recovery Certificate would be a financial debt within the meaning of section 5(8) of IBC and that the holder of such Recovery Certificate would be a financial creditor as per section 5(7) of IBC and would be entitled to initiate CIRP.
Whether such Application is barred by limitation as laid down under section 238 of IBC r/w Article 137 of Limitation Act, 1963? - HELD THAT:- The section 7 application of FC / Respondent is clearly not barred by limitation as date of filing is 24.10.2021 which is within the 3 years of the date of decree (19.02.2019) and of date of issue of Recovery Certificate (19.07.2019).
Whether pendency of an appeal to the decree render the decree and the consequent Recovery Certificate devoid of merits? - Whether the AA / NCLT failed to see that the FC / decree holder abused the provisions of IBC for recovery of its dues and not for resolution of insolvency which is the objective of the code? - HELD THAT:- The fact that a decree holder, has moved an application under section 7 of IBC will not lead to a conclusion that the CIRP, if ordered, will only result in recovery of the FC’s dues at the cost of CD. IBC prescribes an elaborate procedure for ‘Resolution of Insolvency’, including revival of CD, if possible, with the help of ‘Resolution Professionals’. Seen this way, it will not be correct to say that AA / NCLT failed to see that the FC / Respondent abused the provisions of IBC , for ‘recovery of its dues’, at the cost of the avowed objective of the Insolvency & Bankruptcy Code, 2016.
Thus, the Adjudicating Authority / NCLT has been correct in allowing the application filed by the FC / Respondent under section 7 of Insolvency & Bankruptcy Code, 2016 - appeal dismissed.
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2024 (5) TMI 139
Jurisdiction of NCLT - Constitution of its Benches - Competency of Member of the Tribunal to function as a Bench - Admitting an application under Section 9 IBC 2016 - NCLAT observed that the Member (Judicial) has not been authorized by the President under Proviso Section 419(3) to exercise the powers of the Tribunal - Admission of application for initiation of CIRP -HELD THAT:- In exercise of power under proviso to Section 419(3) of the Act, the President has constituted a Special Bench at New Delhi for 13.02.2020 and 14.02.2020 comprising of Single Member (Judicial). The Member (Judicial) heard the application under Section 9 on 04.02.2020 and delivered the judgment on 17.08.2020.
It is apparent that the Appellate Tribunal did not have the benefit of the above referred notification dated 12.02.2020 before it arrived at its decision. The order impugned clearly notes that, “nothing has been brought to our notice during the course of hearing that the President of the Tribunal had issued any general or special order to give power to the single member (Judicial Member) to function as a bench”.
The civil appeal is allowed.
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2024 (5) TMI 138
Admission of Section 7 application - Assignment Agreement - Proper stamping of the agreement - Existence of Debt and Default - Corporate Guarantee - Whether registered Assignment Deed could have been looked into by the Adjudicating Authority while admitting Section 7 application? - Failure to comply with the conditions of settlement agreement - HELD THAT:- Present is a case where the Assignment Agreement which is challenged by the Appellant is a registered document duly stamped for Rs.1,01,500 and it is submitted by the Respondent that the said stamp was paid as per the Maharashtra Stamp Act, 1958. Thus, present is not a case where document which is sought to be challenged is unstamped document. According to the own case of the Appellant, his complaint regarding insufficiency of stamp is pending adjudication before the Stamp Authority. Thus, as on date, there is no determination by any competent authority that the registered Assignment Deed is insufficiently stamped, therefore, the submission of the Appellant that the registered Assignment Deed could not have been looked into by the Adjudicating Authority while admitting Section 7 application, cannot be accepted.
No error has been committed by the Adjudicating Authority in relying on the Assignment Deed dated 07.08.2020 on basis of which the Respondent No.1 has filed Section 7 application.
The present is a case where the Corporate Debtor has given a guarantee. The Corporate Debtor having given Corporate Guarantee, both the Cooperative Bank (the original lender) and Respondent No.1 (the Assignee) were fully entitled to file Section 7 application against the Corporate Debtor. The judgment of Hon’ble Supreme Court in ANUJ JAIN VERSUS AXIS BANK LIMITED AND ORS. [2020 (2) TMI 1700 - SUPREME COURT] was on its own facts and there are distinguishing features in the present case with those of the Anuj Jain’s Case.
There are no reason to enter into issues raised by the Intervener in Company Petition filed under Section 241-244 of the Companies Act, 2013 nor at the instance of Intervener, the impugned order passed by the Adjudicating Authority admitting Section 7 application can be interfered with. More so, Appellant who is Suspended Director of the Corporate Debtor filed the appeal and raised all possible grounds to challenge the admission order.
There are no ground to interfere with the order passed by the Adjudicating Authority admitting Section 7 application against the Corporate Debtor - appeal dismissed.
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2024 (5) TMI 137
Liquidation of corporate Debtor - Eligibility of the Appellant to submit the Resolution Plan under section 29 A of IBC - relevant time - commercial wisdom of the CoC regarding non consideration of the Resolution Plan submitted by the Appellant - resultant recommendation of the CoC for liquidation of the Corporate Debtor which was accepted by the Adjudicating Authority in the Impugned Order - HELD THAT:- The relevant date is the date of submission of the Resolution Plan and the Appellant was not eligible to submit the Resolution Plan on 12.05.2022, since he had already been declared as wilful defaulters by the Respondent No. 2 on 17.07.2021 and 04.10.2021. i.e., much prior to his submission of Respondent Plan. It is also fact that no judicial stay existed in favour of the Appellant on 12.05.2022 regarding his status as wilful defaulter. Hence, the Appellant was not eligible to submit the Resolution Plan and this was rightly adjudicated by the Adjudicating Authority.
There are no error in the Impugned Order dated 19.04.2023. The appeal devoid of any merit stand dismissed.
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2024 (5) TMI 16
Liquidation of the Corporate Debtor - SRA has not made the payments within the timeline allowed under the Resolution Plan for the upfront payments - Section 33(3) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- When the CoC had already been taken a decision in its Meeting dated 08.07.2022 against the liquidation, there are no reason for Respondent No.1 to file the Application against majority decision.
The key words in sub-section (3) of Section 33 are “resolution plan approved by the Adjudicating Authority is contravened by the concerned corporate debtor”. Thus, contravention by the SRA was to be proved - There is no material on the record to indicate that Respondent No.1, who has filed IA No.2767 of 2022 has brought into the notice of the Adjudicating Authority about the Resolution dated 02.12.2022. It is clear that Respondent No.1 having not brought on the record, the subsequent events, i.e., Resolution dated 02.12.2022, where it has participated and voted against the Resolution, clearly indicate that Respondent No.1 intended to obtain order of liquidation by concealing relevant facts. As noted above, Respondent No.1 in his Application has also not impleaded CoC, SRA or RP, whereas an order was sought by Respondent No.1 for liquidation.
When the Adjudicating Authority directed the RP by order dated 04.05.2022 to convene the Meeting of CoC to take a decision, as to whether Corporate Debtor be liquidated or not, the decision taken by the CoC was a commercial decision of the CoC, i.e., not to liquidate the Corporate Debtor and the said commercial decision was not required to be interfered by the Adjudicating Authority by the impugned order directing for liquidation.
The legal position that extension of time is not modification of the Resolution Plan is well settled and that fact that whether the time is extended for one month or one year, does not change the legal position. The time extension for payment of amount as per the Resolution Plan is not modification of the Plan. The very basis of order passed by Adjudicating Authority that not to liquidate the Corporate Debtor would lead to modification of the Resolution Plan is fallacious and unsustainable.
The SRA having already deposited the amount along with interest @ 10% in the form of fixed deposit before the largest Financial Creditor as permitted by Resolution dated 02.12.2022 by the Financial Creditors, the RP shall proceed to distribute the amount to the Financial Creditors as per the Resolution Plan and decision of the Financial Creditors dated 02.12.2022, from the amounts already deposited by the SRA.
The impugned order is set aside - appeal allowed.
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2024 (5) TMI 15
Appointment of the Appellant as the liquidator - non-compliance of Regulation 31A of the Regulations as the mandatory written consent form, as stipulated in Form AA Schedule II has not been filed before the Adjudicating Authority - appointment of Respondent No. 2 as the liquidator though it was not approved by the SCC - locus to file appeal - HELD THAT:- Regulation 31A(11) of the Regulations categorically provides for a written consent prior to the filing of the application for replacement of the liquidator - It is an admitted fact that no such written consent was submitted by the Appellant to the SCC when it had voted in its favour in 28th meeting of SCC nor it was annexed with the application filed by the erstwhile liquidator for his replacement with the Appellant by the Adjudicating Authority.
As per Circular no. IBBI/CIRP/023/2019 dated 14.08.2019, Form No. IP1 is regarding pre-assignment which provides that “this includes consent to accept assignment of an IP as IRP/RP/Liquidator/Bankruptcy Trustee, the details of IP and the applicant, the details of the person which will undergo the process, terms of consent, terms of engagement, filing of application before AA and withdrawal before admission, etc. to be filed within three days of the relevant date” - In the present case, the relevant date was the date when the alleged consent was given by the Appellant i.e. 29.08.2023 when it had sent written consent to the Adjudicating Authority and the SCC as alleged and it was incumbent upon the Appellant to have it uploaded within three days on the portal of the IBBI which is again conspicuous by its absence.
Thus, in such circumstances, it is apparent that the Appellant had not given any written consent on 29.08.2023 as alleged rather no written consent has been given in terms of Regulation 31A(11) of the Regulations which is required to be given on Form AA of Schedule II of the CIRP Regulations, therefore, there is no error in the finding recorded by the Adjudicating Authority in this regard.
The argument of the Appellant that if the written consent was not given then at the most it is a defect which is curable but the judgment relied upon in this regard in the case of Tek Travels Pvt. Ltd. [2021 (4) TMI 813 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI] is not applicable because a written consent to act either as the IRP/RP or the liquidator is a mandatory requirement under the law which has to be obtained before the application is filed.
Whether the Adjudicating Authority has committed an error in appointing the Respondent No. 2 as the liquidator though it was not approved by the SCC? - HELD THAT:- In this regard, reference may be had to the decision of this Court in the case of CA. V. Venkata Sivakumar Vs IDBI Bank Limited, 2022 (12) TMI 1056 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI BENCH] in which it has been held that “combined reading of above case laws and provisions alongwith Section 33 and Section 34 of the Code, would make it clear that the AA which had the powers to appoint the Liquidator will also have the powers to remove the liquidator for reasons, the AA may find fit, just valid and proper”.
Whether the Appellant has no locus to file the appeal? - HELD THAT:- The submission made by the Respondent that the Appellant has no locus to file the appeal has substance because it was only a proposed/prospective liquidator and no inherent right was there to be appointed as such, therefore, the aggrieved person, at the most could have been either the erstwhile liquidator who had filed the application for replacing him with the Appellant or the SCC who had approved the appointment of the Appellant subject to the approval of the Adjudicating Authority.
There are no merit in the present appeal and the same is hereby dismissed.
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2024 (5) TMI 14
Competence of maintaining the appeal by the present appellants - Seeking approval of the resolution plan submitted by Successful Resolution Applicants - homebuyers as a class assented to the plans - HELD THAT:- As a matter of fact, the tripartite agreement was challenged as void but the said application was dismissed by the Adjudicating Authority against which the RP filed the appeal before this Tribunal which was dismissed on 05.01.2022 holding that the RP had no locus to file the application. It was further held that the transfer of portion of plot by sub-lease was effected on 27.09.2016 whereas CIRP was initiated after more than two years i.e on 26.11.2018. It was further held that the RP has no ground to doubt the transaction which is more than two years prior to commencement of CIRP. The association did not raise any plea of fraud in transferring the plot by sub-lease and the RP failed to make out a case that the sub-lease was executed for depriving the rights of homebuyers.
Also in the case of Piya Puri [2022 (8) TMI 1111 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] the same view has been taken while discussing Section 25A of the Code and Regulation 16-A(9) of the Regulations. It has been held that where the majority (more than 50%) have voted in favour of the resolution plan approving the same, the dissenting homebuyers who are in minority have to go alongwith the views of the majority and are not entitled to prefer the appeal.
In view of the law laid down by the Hon’ble Supreme Court and this Court coupled with the fact that the homebuyers as a class through authorised representative have voted to the extent 87.60% approving the resolution plan, the other homebuyers who are in minority have to follow the decision of the majority and cannot challenge the resolution plan in appeal as they do not fall within the definition of ‘aggrieved person’ and thus, the appeal at their instance is not maintainable.
There is a merit in the objection raised by the Respondent and hence, the appeal at the instance of the present appellants is not maintainable and the same is hereby dismissed.
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2024 (5) TMI 13
Initiation of CIRP - Relevant date of default - Delay in making payments towards interest - interest debited in the cash credit facilities which were serviced by the Respondent with delay - Period prior to period stipulated under Section 10A of IBC or not - COVID-19 pandemic Period - Respondent declared as NPA - HELD THAT:- Section 10 A of the Code was introduced by amendment Act of 2020 dated 05.06.2020 with the purpose to support the business and industry who were adversely affected due to covid 19 pandemic. Section 10 A of the Code provides temporary suspensions on initiation of CIRP, which was provided initially for six months with the provision to be extended from time to time as notified - proviso to Section 10 A clearly mentions that “no application shall ever be filed” for initiation of CIRP of “for the said default occurring during the said period”, which signifies that the Parliament clearly envisaged to bar initiation of any application for CIRP, in respect of default which has occurred on or after 25.03.2020 for a period as notified from time to time.
Section 10 A of the Code, by nature, is preventive and prohibitory and begins with non obstante clause i.e., “notwithstanding anything contained in Section 7,9 and 10” and therefore, places complete embargo for initiation of CIRP under these Sections for the period beginning with 25.03.2020 till stipulated period. However, explanation clarify the position that Section 10 A is not meant to be applicable or embargo for initiation of CIRP for default occurred prior to 25.03.2020.
The bar on the filing of application for the commencement of CIRP during stipulated period does not extinguish the debt owed by the Corporate Debtor and creditors/ lenders may continue to exercise their rights to pursue their legal remedies under Section 7,9 and 10.
In the present appeal, the Appellant fairly stated that due occurred on the last date of February, 2020 but was payable on 01.03.2020. Hence, strictly speaking the date of default can not be 28.02.2020 as claimed by the Appellant in Part IV and at best could be as 01.03.2020 i.e., when it became payable - the mere fact of a ‘debt’ being due and payable is not adequate to justify the initiation of CIRP at the instance of the creditor, unless the ‘default’ on the part of the Debtor is established.
The ‘Interest Dates’ is shown as ‘monthly’ but no’ particular date has been specified and the Appellant has pleaded that it become due on last date of month but payable on 1st of the following month - the “statement of stock” is to be submitted on monthly basis as part of the financial covenant, but no where it is indicated that submission of stock statement by the Respondent to the Appellant is condition precedent or breach of which result into default of debt.
The default is required to take place with reference to debt which is outstanding and become payable. Normally a loan recall notice mentions all the details including reasons for default and is a formal communication from the lender requesting the borrower for repayment of outstanding loan balance - here, it is noted that the alleged date of default has bee mentioned as 28.02.20220 ( it should have been 29.02.2020 being leap year) as the Appellant mentioned that the instalment become due on the last date of the month and to be payable on 01.03.2020 and as per RBI Circular dated 27.03.2020, the moratorium started from 01.03.2020 for three months which was further extended for further three months. Thus the Respondent was covered under RBI guidelines and the default could not have been taken as 28.02.2020 or even on 01.03.2020 due to RBI Guidelines and subsequently due to Section 10 A of the Code w.e.f. 25.03.2020.
The Appellant, therefore, was not entitled to initiate the CIRP in the given background of the facts as well as various RBI guidelines and the provisions of Section 10 A of the Code.
Appeal dismissed.
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2024 (4) TMI 1146
Admission of Section 95 application for initiation of proceeding against the Personal Guarantor - Jurisdiction of NCLT, New Delhi - time limitation.
Jurisdiction of NCLT - HELD THAT:- Sub-section (2) of Section 60 clearly mandates, when CIRP proceeding of a corporate debtor is pending before a National Company Law Tribunal, an application relating to the insolvency resolution of a Corporate Guarantor or Personal Guarantor of such Corporate Debtor shall be filed before such National Company Law Tribunal. The application under Section 7 was filed before NCLT, Chandigarh by State Bank of India against Castex Technologies Pvt. Ltd. on 20.12.2017, hence, the application filed by L&T Finance under Section 95 against the Personal Guarantor i.e. the Appellant had to mandatorily filed before NCLT, Chandigarh as per Section 60(2). This clearly indicate that application filed by L&T Finance at NCLT, New Delhi was filed in jurisdiction of that NCLT which had no jurisdiction to entertain the application or pass an order.
Filing of Section 95 application before the Adjudicating Authority has to be as per Section 60(1) and 60(2). The Adjudicating Authority referred to in Section 95(1) is the Adjudicating Authority which has jurisdiction to entertain the application under Section 95. In the present case, the application filed by the L&T Finance under Section 95, which was filed before NCLT, New Delhi was clearly not maintainable since as per Section 60(2) of the Code application under Section 95 by L&T Finance ought to have been filed before the Adjudicating Authority where insolvency resolution process against the Corporate Debtor is pending - the submission of the Appellant is accepted that on application filed before the Adjudicating Authority which has no jurisdiction to entertain the application against Personal Guarantor interim moratorium may kick-in that will be against the statutory scheme under the I&B Code.
The submission of the Appellant is that in view of the interim moratorium kicked-in on the basis of application filed by L&T Finance, application was not maintainable. It is already noticed that application filed by L&T Finance was filed without jurisdiction before NCLT, New Delhi.
Time limitation - HELD THAT:- Reference made to the notice issued under Section 13(2) of the SARFAESI Act, 2002, which was issued on 24.09.2018. Even if the, limitation is counted by date of issuance of notice under Section 13(2) of the SARFAESI Act, application filed in the year 2020 by State Bank of India under Section 95 was well within time. Thus, we do not find any substance in submission of the Appellant that the Application filed by State Bank of India was barred by time.
There are no merit in the submissions raised by learned counsel for the Appellant challenging the order of admission passed by the Adjudicating Authority under Section 100 of the I&B Code - there is no denial of debt and default by the Appellant - there are no merit in the appeal - appeal dismissed.
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2024 (4) TMI 1096
Correctness of Resolution plan - fair and equitable distribution or not - resolution plan failed to make any provision for the operational creditors - Nil Payment to Operational Creditors - waterfall mechanism - HELD THAT:- The resolution plan has been approved by 100% voting by the CoC. It is well settled that the commercial wisdom of the CoC is unjusticiable. Moreover, the liquidation value of the operational creditors is NIL and the amount which has been distributed to the CD in accordance with Section 53(1) shall have to be Nil as well, therefore, the resolution plan is not in violation of Section 30(2)(b) of the Code.
Moreover, admitted claim regarding the financial creditors is to the tune of Rs. 12067,57,69,383 and amount provided under the plan is Rs. 2500 Cr. which is to the tune of 20.098%, therefore, all the other creditors including unsecured financial creditors and operational creditors have been provided NIL.
There are no error in the impugned order having been passed in respect of the applications filed by the Appellants, therefore, the appeal is found to be without any merit and the same is hereby dismissed.
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2024 (4) TMI 1067
Initiation of CIRP - Financial Creditor of Operational Creditor - Scope and Meaning of the term "Financial creditor" u/s 7(5) of IBC - security deposits under the agreements constitute financial debt or not - Invoking sub-section (5) of Section 60 of the IBC - HELD THAT:- Where one party owes a debt to another and when the creditor is claiming under a written agreement/ arrangement providing for rendering 'service', the debt is an operational debt only if the claim subject matter of the debt has some connection or co-relation with the ‘service’ subject matter of the transaction. The written document cannot be taken for its face value. Therefore, it is necessary to determine the real nature of the transaction on a plain reading of the agreements. What is surprising is that for acting as a Sales Promoter of the beer manufactured by a corporate debtor, only a sum of Rs.4,000/- per month was made payable to the first respondent. Apart from the sum of Rs.4,000/- per month, there is no commission payable to the first respondent on the quantity of sales. Clause (6) provides for termination of the appointment by giving thirty days’ notice. Though clause (10) provides for the payment of the security deposit by the first respondent, it is pertinent to note that there is no clause for the forfeiture of the security deposit.
As there is no clause regarding forfeiture of the security deposit or part thereof, the corporate debtor was liable to refund the security deposit after the period specified therein was over with interest @21% per annum. Since the security deposit payment had no correlation with any other clause under the agreements, as held by the NCLAT, the security deposit amounts represent debts covered by subsection (11) of Section 3 of the IBC. The reason is that the right of the first respondent to seek a refund of the security deposit with interest is a claim within the meaning of subsection (6) of Section 3 of the IBC as the first respondent is seeking a right to payment of the deposit amount with interest. Therefore, there is no manner of doubt that there is a debt in the form of a security deposit mentioned in the said two agreements.
Coming back to the definition of a financial debt under sub-section (8) of Section 5 of the IBC, in the facts of the case, there is no doubt that there is a debt with interest @21% per annum. The provision made for interest payment shows that it represents consideration for the time value of money. Now, we come to clause (f) of sub-section (8) of Section 5 of the IBC. The first condition of applicability of clause (f) is that the amount must be raised under any other transaction. Any other transaction means a transaction which is not covered by clauses (a) to (e). Clause (f) covers all those transactions not covered by any of these sub-clauses of sub-section (8) that satisfy the test in the first part of Section 8. The condition for the applicability of clause (f) is that the transaction must have the commercial effect of borrowing. “Transaction” has been defined in sub-section (33) of Section 3 of the IBC, which includes an agreement or arrangement in writing for the transfer of assets, funds, goods, etc., from or to the corporate debtor. In this case, there is an arrangement in writing for the transfer of funds to the corporate debtor. Therefore, the first condition incorporated in clause (f) is fulfilled.
In the financial statement of the corporate debtor for the Financial Year 2016-17, the amounts paid by the first respondent were shown as “other long-term liabilities”. Therefore, if the letter mentioned above and the financial statements of the corporate debtor are considered, it is evident that the amount raised under the said two agreements has the commercial effect of borrowing as the corporate debtor treated the said amount as borrowed from the first respondent.
The NCLAT's view that the amounts covered by security deposits under the agreements constitute financial debt, is agreed upon. As it is a financial debt owed by the first respondent, sub-section (7) of Section 5 of the IBC makes the first respondent a financial creditor.
Appeal dismissed.
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2024 (4) TMI 1066
Initiation of CIRP - NCLAT admitted the application u/s 7 - NPA - default in repayment of dues - Relevant date of default - date of default should be the date of the Loan Recall Notice or not - scope of Section 10A of IBC - HELD THAT:- It is an admitted fact that the Corporate Debtor owes Rs. 46.80 crores to the financial creditor, though the Appellant has been claiming that as per the Statement Of Account (SOA) the Financial Creditor has attached incorrect and fabricated SOA. Without going into the exact amount of the debt, it is an admitted fact that the debt was Rs.46.80 crores as on the date of declaration of NPA i.e. 27.09.2019. This amount is more than the threshold of Rs.1 crore and is enough for initiating proceedings. There is no requirement to calculate and fix the exact amount of repayment.
Whether the date of NPA declaration (September 27, 2019) or the date of Loan Recall Notice (August 11, 2020) constitutes the default date? - HELD THAT:- In adherence to Reserve Bank of India (RBI) regulations, the classification of Non-Performing Assets (NPAs) serves as a pivotal measure for maintaining the financial health and stability of the banking sector. When a borrower defaults on loan payments for a stipulated period, typically 90 days, the loan account is rightfully classified as an NPA. This classification isn't arbitrary; it's a well-defined threshold indicating a lapse in repayment obligations - In the present case, a loan instalment due on June 30, 2019, remains unpaid. Following the regulatory protocol, on September 27, 2019, marking the 90th day of default, the loan account was rightly categorized as an NPA. This classification is not an arbitrary punishment but rather a consequence of a fundamental breach of repayment terms.
Crucially, the onus lies on the borrower to rectify the default and regularize the loan account. Unfortunately, in this instance, the borrower, despite ample opportunity, failed to address the defaulted payments, thus perpetuating the default status. Such inaction cannot be condoned or overlooked - the bank is well within its rights to pursue its options for the outstanding amounts owed by the borrower.
In the instant case the default was occurring 90 days prior to the NPA declaration (September 27, 2019). It is difficult to accept the argument of the Appellant that this date should not be treated as the date of default.
The remedies stipulated for events of default in the Sanction Letter primarily focus on the acceleration of maturity and the enforcement of security interest, such as filing a Recovery suit before the Debt Recovery Tribunal (DRT) and enforcing security interest under the SARFAESI Act, 2002. Notably, there is no mention of resolution under the IBC. Hence, relying on events of default and their corresponding remedies outlined in the Sanction Letter does not bolster the CD's case and this line of argument cannot be relied upon - Once the CD defaulted and the loan accounts were classified as NPAs, a legal recourse was well within the Bank's statutory rights. Pursuing resolution under the IBC 2016, which serves as a specialized law governing the resolution of distressed entities, was a legitimate course of action for the Bank.
The loan accounts of the Corporate Debtor were officially classified as Non-Performing Assets (NPA) on September 27, 2019, following 90 days of non-payment, thereby triggering a default event. Despite subsequent partial payments made by the borrower, the NPA status and default persisted, indicating a continuous state of default. Consistent with established judicial precedents and the specific circumstances of the case, the date of NPA classification serves as the valid "Date of Default" for initiating insolvency proceedings. Even after the NPA classification, the borrower remained in default. Consequently, September 27, 2019, the date of NPA classification, stands as the "date of default" under the Insolvency and Bankruptcy Code (IBC), superseding any subsequent events, such as the loan recall notice issued on August 18, 2020.
There are no discernible flaws in the orders issued by the Adjudicating Authority; hence, they are upheld without any alteration - Appeal is dismissed.
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2024 (4) TMI 1065
Delayed filing of appeal - relevant date for calculation of time limitation - from the date of pronouncement of the Judgment or from the date of uploading of the judgement - Maintainability of section 9 application - initiation of CIRP Proceedings - HELD THAT:- Under the NCLAT Rules, the provision for preferring an Appeal is contemplated, under section 61, which provides for the time period during which appeal could be filed before the Appellate Tribunal i.e. within the 30 days of passing of the Order, the same could be registered only based on the Certified Copy of the Order upon being produced as per Rule 22, as certified copy has be filed of along with the Appeal - The issue would be as to whether the Free Copy which has been issued under Rule 50 of the NCLT Rules, cannot be taken as to be the Certified Copy under the Provisions of section 22(2) to enable to file an appeal under section 61.
It has not been the case of the Appellant, that the Appeal was accompanied with the Certified Copy as contemplated under Rule 22 of the NCLT Rule and that the Certified Copy would be as provided under sub section 9 of section 2 of the NCLT Rules, which could be taken as to be the basis for the purpose of determining the period of limitation. The limitation to file appeal would be determined only from the date of pronouncement of the Judgment i.e, dated 31.10.2023, uploading of the Impugned on 09.11.2023 it becomes insignificant. It is admitted case of the Appellant that he has applied for the free copy only on 14.11.2023 by presenting an application before the Registry of the court.
The limitation for filing an Appeal has to be considered from the date of pronouncement of Judgment and not the date on which the Appellant received the Certified Copy, but since he applied Certified Copy on 21.03.2024 the Appeal will not be within the period prescribed under Proviso sub section 2 of Section 61 of the Code. Because, the Appeal itself for its registration was presented before the Registry on 26.12.2023, that too despite of the fact, that the Appellant had already received the Free Copy on 14.11.2023. Even, according to the case of the Appellant, since he received the knowledge and the Free Copy of the Judgment was received by him on 14.11.2023, the appeal since presented on 26.03.2024, would be barred by limitation.
As Condone Delay Application carries no justification as to why the Appeal was filed on 26.12.2023 i.e. beyond the prescribed period of limitation under Law. Even, according to the Appellant himself, the appeal has been filed with 12 days delay. The Appeal is barred by limitation, hence the Condone Delay Application i.e. IA No.95/2024 would stand rejected and consequences there to the Company Appeal (AT) (CH) (Ins) No.29/2024, M/s. Whitehand Services Vs M/s. RD Buildtech and Developers (Karnataka) Pvt. Ltd. would too stand rejected.
Appeal dismissed.
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2024 (4) TMI 1064
Settlement of belated claims - Condonation of delay in filing the claim - direction to Resolution Professional to admit the claim of the Appellant’s in the category of Financial Creditor - Since the Resolution Plan had already been approved by the CoC, the Adjudicating Authority rejected the claim of the Appellant by the impugned order - whether claims are barred or not in terms of the provisions of IBC and Regulation 12(2) of the CIRP Regulations and also various judicial precedents? - HELD THAT:- In the instant case the date of RFRP issue date is prior to the date of COC meeting which has approved the Resolution plan. Even if later date is taken to the advantage of the Appellant as per above provision, which is later than 90 days, it will not help the Appellant due to peculiar facts of the case, where the claim has been filed after the approval of Resolution Plan by the COC.
For condonation of delay in filing the claims, the Appellant has tried to rely upon Suo Motu Writ Petition (C) No. 3 of 2020 titled “In Re: Cognizance for Extension of limitation” of Hon’ble Apex Court [2020 (5) TMI 418 - SC ORDER]. The protection with regard to extension of limitation granted by the Hon’ble Supreme Court commences from 15.03.2020 and grants protection to cases only where limitation would have expired during the period of 15.03.2020 till 28.02.2022. In the instant case, the time period available with the Appellants, even after 90 days, expired on 13.01.2020, much before the Covid-19 crises began, meaning that the protection granted by the Hon’ble Supreme Court in Suo Motu Writ Petition (C) No. 3 of 2020 cannot be relied upon to seek refuge.
The issue regarding the belated claims is further enunciated in Pratap Technocrats (P) Ltd. vs. Monitoring Committee of Reliance Infratel Limited, [2021 (8) TMI 553 - SUPREME COURT], wherein the Hon’ble Apex Court has concluded that the jurisdiction of the Adjudicating Authority under Section 31(1) is to determine whether the resolution plan, as approved by the CoC, complies with the requirements of Section 30(2). The NCLT is within its jurisdiction in approving a resolution plan which accords with the IBC. There is no equity-based jurisdiction with the NCLT, under the provisions of the IBC.
In the instant case belated claims have been considered upto 90 days and also of those whose information exists in CRM database, even though they have not filed the claims. The Appellant has filed its claims after 540 days in terms of Section 15 of the Code and approximately two months after the approval of the plan from the CoC on 07.05.2021. The IBC is a time bound process and the Appellant cannot be allowed to reopen this chapter and unleash the hydra headed monster of undecided claims on the Resolution Applicant. Belated claim of the Appellant could not have been accepted by the RP after approval of plan by the Committee of Creditors - Appellant could not have been allowed by the Adjudicating Authority as the CoC in its commercial wisdom had approved the resolution plan on 07.05.2021 itself and the said resolution plan provides for specific treatment of belated claims, if any.
Whether on the basis the materials on record, it can be concluded that the Appellant is a homebuyer or not? - HELD THAT:- Pertinently, the Allotment Letter and the Buy Back Agreement mention different unit numbers: while the Allotment Letter mentions the unit no. D2- 601, the Buy Back Agreement mentions unit no. D2-2002. Further, there is no proof of actual disbursement of the sum of Rs. 50,00,000/- by the Appellant to the Corporate Debtor, such as bank statement, audited accounts, etc. Further, the said payment is not recorded in the Corporate Debtor’s books of accounts. All the above facts do not lend credence to the Appellant’s assertion that she is a genuine homebuyer. In fact, the Appellant herself filed the Claim in Form-C as a Financial Creditor, and not in Form CA as a Homebuyer. Further, the Appellant’s name also does not find mention in the ‘List of Homebuyers who have not submitted Claims’ published by the Resolution Professional.
The claim that the Corporate Debtor has received benefit from the allotment of the Appellant, which now stands void and in compliance of Section 65 of the Indian Contract Act, 1872, the Respondents are liable to restore the benefit received from the allotment of units is not borne out of the facts of this case. As per the records of the Corporate Debtor, there exists no allotment in the Appellant and nor has any acceptable evidence been produced for the receipt of Rs. 50 Lacs by the Corporate Debtor.
From the materials on record, it is noticed that in compliance with the provisions of IBC, the Resolution Professional has undertaken various activities relating to collation and verification of the claims and upon due verification of the books of the account of the Corporate Debtor, it duly reflected the units qua which the claims have been received and the units for which claims have been not received - there are no substance in the claim of the Appellant that the resolution professional has failed to carry out statutory duties as prescribed under Section 25 of the Code.
The claim of the Appellant is that since approval of Resolution Plan is pending before the Adjudicating Authority, its claim can be considered on merits. This issue is examined in detail basis the facts of the case, wherein the Appellant seeks condonation of 540 days and basis the current position of law. It becomes unsustainable to accede to his request to allow his belated claim to be considered, particularly in the background that there is no acceptable material on record to suggest actual disbursement of Rs.50 lakhs to the Corporate Debtor and more so when the Appellant itself has filed Form – C and not CA raising its claim.
Overall, the delay in filing the claim, lack of credible evidence, and inconsistencies undermine the Appellant's case. The Adjudicating Authority's decision to reject the belated claim is upheld, as it aligns with the time-bound nature of CIRP proceedings and the absence of legal grounds for indulgence.
Appeal dismissed.
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2024 (4) TMI 1042
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Debt or not - Civil Suit for specific performance - non-allotment of 39100 sq. ft. built-up area of land or not - default in terms of Section 3(12) of the I&B Code, 2016 - it was held by NCLAT that There is no financial debt in favour of the Appellant. It is pertinent to mention that Appellant's pleading is that the amounts have been paid by the Appellant to the Respondent and the consent decree itself is the debt for which Section 7 Application has been filed - HELD THAT:- There are no good ground and reason to interfere with the impugned judgment and hence, the present appeal is dismissed.
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2024 (4) TMI 1015
Approval of Resolution Plan - appellant submitted that the personal guarantees given by the individual guarantors, could not have been made the subject matter of the resolution plan with regard to the Corporate Insolvency Resolution Process of the corporate debtor - HELD THAT:- Issue notice, returnable in the week commencing 20.08.2024.
Notice will be served by all modes, including dasti.
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