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IBC - Case Laws
Showing 521 to 540 of 9152 Records
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2024 (3) TMI 289
Dismissal of Section 9 petition filed by the Appellant - Period of limitation - seeking to bring the Corporate Debtor under the rigours of Corporate Insolvency Resolution Proceedings (CIRP) - Appeal was dismissed on the ground of time limitation - HELD THAT:- There are no document/agreement between the two parties which evidences running account payment underlying their business operations. In the absence of any documentary evidence which provides foundational basis to the claim of the Appellant that there was a running account, the reliance placed on the judgment of this Tribunal in SHRI ABHINANDAN JAIN, DIRECTOR RISA INTERNATIONAL LTD. VERSUS TANAYA ENTERPRISES PVT. LTD. [2021 (3) TMI 939 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH , NEW DELHI] does not come to the aid of the Appellant. Furthermore, on perusal of the reply to the Section 8 Demand Notice sent by the Corporate Debtor on 07.01.2020, as placed at pages 127-136 of APB it comes to notice that it has been categorically denied that any operational debt was due qua the Operational Creditor - there are no merit in the argument advanced by the Learned Counsel for the Appellant that since the last invoice did not attract limitation, the other 26 invoices which have been submitted alongwith it also escapes the bar of limitation on the unsubstantiated pretext of running account of payments.
Reliance placed in the decision of the Hon’ble Supreme Court in the matter of B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES [2018 (10) TMI 777 - SUPREME COURT] wherein after considering the statutory provisions of the IBC and the Limitation Act, it has been settled that for filing application under Section 9 of the IBC, Article 137 is attracted.
The Adjudicating Authority has therefore not erred in holding that the Appellant cannot rely on the 26 other invoices wherein the default occurred over three years prior to date of filing Section 9 application to cross the threshold mark in claiming an outstanding amount of Rs. 1,57,06,741 / - in their Section 8 Demand Notice and Section 9 application - the principal legislative intent behind the IBC is insolvency resolution so as to bring the Corporate Debtor to its feet and in view of this clear legislative fiat, the IBC forum cannot be allowed to be used as a substitute for money recovery proceedings.
There are no convincing reasons to interfere with the order of the Adjudicating Authority. The appeal being devoid of merit, there are no reasons to entertain it. In the result, the appeal is dismissed.
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2024 (3) TMI 243
Validity of demand notice based on the order secured by the petitioner from NCLT - Corporate Insolvency Resolution Plan approved by the NCLT which proposed a NIL value against the sales tax dues - Revision of deemed assessment - failure on the part of the petitioner to submit necessary Form-C and Form-F - HELD THAT:- The proceeding that was initiated before the National Company Law Board (NCLT) with the presentation of a petition under Section 8 of the IBC, 2016 on 16.07.2018 appears to be staged managed with a view to defeat the rights of scores of creditors including operating creditors such as the respondent Commercial Tax Department - Mere paper publications of notice to the financial creditors and the operational creditors is not sufficient. Fixing 31.07.2018 as the last date for filing claim statement also shows undue alacrity is getting orders for NCLT to defeat the rights of creditors of the petitioner.
The Order passed by the National Company Law Board (NCLT) on 01.02.2019 approving the Corporate Insolvency Resolution Plan filed by Mr.Mahavir Chand Bafna, promoter of the petitioner Company on 20.12.2018 as a resolution applicant before the National Company Law Board (NCLT) CP/682(IB)/CB/2017 has also not disclosed the names of any of the financial creditors and the operational creditors and the details of discussion of the Committee of the Creditors (COC) before the Corporate Insolvency submitted by Mr.Mahavir Chand Bafna, the promoter of the petitioner - It merely states that the meeting of the Committee of Creditors (COC) was held on 27.09.2018, 30.11.2018 and 20.12.2018. It further records that the Committee of Creditors (COC) after deliberation approved the Corporate Insolvency Resolution Plan submitted by the Corporate debtor i.e. the promoter of the petitioner Mr. Mahavir Chand Bafna by passing the Resolution on 04.01.2019.
NCLT as the Adjudicating Authority ought to have been careful before approving the Corporate Insolvency Resolution Process initiated by the promoter of the petitioner company. NCLT ought to have imposed penalty on the petitioner instead of sanctioning the plan - Entire course of event before NCLT shows that the proceedings initiated before the NCLT under Section 8 of the Insolvency Bankruptcy Code, 2016 was intended to defeat the rights of the financial creditors and the operational creditors and at behest of the petitioner. It was stayed managed by the petitioner itself.
The challenge to the impugned demand notice based on the order secured by the petitioner from NCLT on 01.02.2019 in C.P/682(IB)/CB/2017 is unsustainable. Therefore, this writ petition is liable to be dismissed - petition dismissed.
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2024 (3) TMI 190
Direction to handover vacant and peaceful possession of the premises licensed to the Appellant by the Corporate Debtor within 15 days - impugned order has been challenged on the ground that the issue of eviction vests with the Learned Court of Small Causes under Section 41 of the Presidency Small Causes Courts Act, 1882 - HELD THAT:- The issue of passing an eviction order qua immovable properties forming part of assets of Corporate Debtor, despite injunctions, have been discussed in various judgements. In M/S. JHANVI RAJPAL AUTOMOTIVE PVT. LTD. VERSUS VERSUS R.P. OF RAJPAL ABHIKARAN PVT. LTD., AGARWAL REAL CITY PVT. LTD. [2023 (1) TMI 301 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI], this Hon’ble Tribunal has taken a view in case of M.P. Accommodation Control Act, 1961 that where the Corporate Debtor has ownership right over the premises, the premises can be taken in control by IRP/.RP. This Hon’ble Tribunal was of the view that the suit is not contemplated in the statutory scheme contained in the IBC. The order of this Hon’ble Tribunal was challenged before Hon’ble Supreme Court and the petition was dismissed.
The argument that despite five attempts Respondent has been unable to carry out auction sale is also not convincing as it may be due to appellant being in possession, as no intending purchaser may purchase premises in an auction, which is in possession of someone else and may land such intending purchaser(s) in litigation. Even the subsisting status quo as was issued by the Learned Court of Small Causes, only restrained the Liquidator from dispossessing the appellant without following due process of law, but admittedly the Respondent had invoked the jurisdiction of NCLT, per Section 60(5) of the Code, hence this argument of appellant too lacks merit.
There could be no challenge to the powers of the NCLT to pass an eviction order in the factual matrix - Appeal dismissed.
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2024 (3) TMI 136
Immunity to corporate debtors and their assets, upon approval of a resolution plan - jurisdiction of NCLT to release the attached properties by invoking Section 32A of the IBC, 2016? - HELD THAT:- There are no hesitation in holding that there is no scope whatsoever for the attachment effected by the ED over the Attached Properties to continue once the Approval Order came to be passed. We are not opining on whether the attachment could have continued after commencement of the CIRP. The NCLT has simply answered the question of law arising in relation to the resolution of the corporate debtor and that too within the limits of the jurisdiction conferred on it. It is Section 32A of the IBC, 2016, on which the NCLT based its declaration that the Attached Properties must be released, and that is entirely correct. Whether the ED was right in continuing the attachment between the commencement of the CIRP and before the Approval Order, is also something that the April 2023 Order deals with, that issue has been overtaken, as explained earlier in this judgement.
The Adjudicating Authority under Section 8 of the PMLA, 2002 has been given powers to conduct quasi-judicial proceedings before deciding to make any attachment. Towards this end, the Adjudicating Authority is obligated to issue a show-cause notice, provide an opportunity of being heard and pass a reasoned order. Evidently, orders passed by the Adjudicating Authority are appealable orders under Section 26 of the PMLA, 2002 - Section 11(3) of the PMLA, 2002 explicitly states that every proceeding under Section 11 would be deemed to be a judicial proceeding within the meaning of Section 193 and Section 228 of the Indian Penal Code, 1860.
In the instant case, the NCLT has ruled on the import of Section 32A of the IBC, 2016 in the Approval Order. The NCLT has once again ruled in the April 2023 Order on the import of Section 32A. Both these orders, unexceptionable for the reasons stated above, have been ignored by the ED - The ED did not appeal the Approval Order either within the limitation period. Therefore, while one may raise technical grounds that alternate remedies may exist in the law, a constitutional court adjudicating the two competing writ petitions based on the same set of facts, is indeed an efficacious remedy.
There is no requirement for any partial quashing of the instruments of enforcement under the PMLA, 2002. These instruments of enforcement would simply have no effect whatsoever against the corporate debtor to its detriment. The corporate debtor would indeed be obligated to cooperate in the investigation and prosecution that would continue against the other accused.
The attachment by the ED over the Attached Properties, being the four bank accounts of the Corporate Debtor, (with aggregate balances to the tune of Rs. 3,55,298/- and any interest earned thereon) and the 14 flats constructed by the Corporate Debtor valued at Rs. 32,47,55,298/-, came to an end on 17th February, 2023. Such release has occurred by operation of Section 32A of the IBC, 2016.
Petition disposed off.
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2024 (3) TMI 135
Commencement for limitation of appeal - relevant date - date of uploading of the order or the date when order was passed? - HELD THAT:- In the Delay Condonation Application filed by the Appellant in paragraph 3 the Appellant states “that the matter was listed before the Ld. NCLT on 07.11.2023 for purpose of “For Seeking Appropriate Directions” whereupon the impugned Order came to be passed”. There are no averments in the application that no order was passed on 07.11.2023 by the Court. Appellant sought to rely on date of uploading of the order which may not help the Appellant in the present case. The order was passed in presence of both the parties whose presence are noted in the order.
The limitation to file an appeal shall commence from 07.11.2023 and the Appeal having been filed beyond 15 days after expiry of the limitation, delay cannot be condoned. The jurisdiction to condone the delay is limited to only 15 days by Section 61(2) proviso.
The Delay Condonation Application is dismissed.
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2024 (3) TMI 134
Revival of company appeal by Financial Creditor - Order of setting aside of CIRP - HELD THAT:- The Financial Creditor is entitle to revive the Company Appeal in view of the liberty granted by this Tribunal itself in its order dated 11.02.2020. The cheques given by the Corporate Debtor having been dishonoured, Appeal deserve to be revived. It is noticed that the Appellant has been opposing the Application on untenable grounds and his only intent is to delay the proceedings. The sequence of the events indicate that the Corporate Debtor did not honour the settlement on basis of which Section 7 application was closed by the Adjudicating Authority by order dated 05.10.2020 and thereafter on one or other pretext has been delaying the proceedings.
The Company Appeal is revived - appeal allowed.
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2024 (3) TMI 82
Eligibility of ex-promoter/Corporate Debtor u/s 29A read with Section 240A of the IBC to submit a resolution plan claiming the benefits of MSME - rejection of Resolution Plan.
Eligibility of the Corporate Debtor to submit a resolution plan in the present facts of the case when it has acquired a change in its status to that of an MSME after initiation of the CIRP proceedings - HELD THAT:- As the subsequent Chartered Accountant’s certificate was not based on any independent valuation or investigation but premised on the faulty certificate of the Chartered Engineer and hence cannot be relied upon.
Whether the Adjudicating Authority could have raised concern over the plausibility of the reports of the Chartered Engineer and other the valuation reports which had validated the MSME entitlement of the Corporate Debtor by going under the skin of the computation exercise conducted by them in rejecting the MSME status of the Corporate Debtor? - HELD THAT:- The MSME registration was done by the competent authority under MSME Act on 23.10.2020 which was subsequent to the date of MSME Notification of 26.06.2020. Hence the certificate prima-facie was issued on the basis of the new Notification. Also in the present case, admittedly, the application has been filed online and the registration was done online on the basis of ITRs and hence there lies no case of any patent procedural violation or deviation from the normal practice. Any infirmity or defect in the MSME registration certificate could have therefore been corrected only by the competent authority or any other designated authority as specified in the notification.
The MSME Act as it stands clearly does not provide any supervisory role on the Adjudicating Authority to revise/modify/revoke/interfere with MSME registration at its level. Clearly the notification framed thereunder also does not bestow upon the Adjudicating Authority with any such authority to hold an MSME registration certificate to be null and void on its own - The MSME registration can only be revoked by the competent authority and the Adjudicating Authority cannot arrogate this jurisdiction upon itself to modify/revise/revoke or interfere in any manner with the MSME registration granted by the competent authority. It is opined that the MSME status of the Corporate Debtor as granted by the competent authority continues to subsist and could not have been disregarded by the Adjudicating Authority unilaterally.
CoC was not consulted before MSME registration of the Corporate Debtor - HELD THAT:- As regards the process of consideration and approval of resolution plan is concerned, the matter is essentially that of the commercial wisdom of the CoC and the scope of judicial review is strictly circumscribed within the boundaries of Section 30(2) of the IBC for the Adjudicating Authority. This discipline has been emphasised by the Hon’ble Supreme Court in several judgments and laid down that the powers of the Adjudicating Authority dealing with the resolution plan does not extend to examining the correctness or otherwise of the commercial wisdom exercised by the CoC and every dissatisfaction does not partake the character of a legal grievance and cannot become a ground of appeal.
Collective action along with ‘timely resolution’ and ‘value maximisation’ is fundamental to the operational aspects of an insolvency regime. It is also well settled that the IBC places the CoC in control of the insolvency process and the CoC exercises its power of decision making through the process of voting. Voting mechanism which is the instrument of decision making for the CoC has been coupled with specific threshold levels of voting share required for taking such decisions - Finality and binding force of the resolution plan in accordance with the majority decision is well settled. That being the case, there are no position to subscribe to the findings of the Adjudicating Authority in rejecting the resolution plan which has been recommended by the CoC with requisite majority.
The Adjudicating Authority committed gross error in rejecting the application for approval of the resolution plan of the SRA on the ground that the MSME registration was obtained after commencement of the insolvency proceedings and that the registration was wrongly obtained - both the impugned orders of the Adjudicating Authority are unsustainable - Appeal allowed.
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2024 (3) TMI 81
Exclusion of appellant from the Committee of Creditors (CoC) - The Resolution Professional deemed Rare ARC (appellant) akin to a related party, thus ineligible for CoC participation - assignment of term loan - it is contended that the SIFL and SEFL were related parties to the Corporate Debtor and assignment was made with intent to control the CIRP of the Corporate Debtor - HELD THAT:- Admittedly, the claim was filed by the Appellant in the second CIRP of the Corporate Debtor which claim was based on assignment dated 09.09.2020. After receipt of the claim by Appellant, there has been correspondences between Resolution Professional and the Appellant. After certain correspondences between the parties, the Resolution Professional issued an e-mail dated 30.04.2022 communicated to the Appellant i.e. assignee that the Appellant is akin to a related party and held that the Appellant shall have no voting of the CoC of the Corporate Debtor.
It is noticed that in the avoidance application which was filed by the Administrator there was pleading that Rs.25 Crores was routed through SIFL and SEFL from its related entities to the Rare ARC for paying the consideration. The avoidance application still pending for consideration before the Adjudicating Authority, it is not necessary for us to return any finding on issue which is pending consideration before the Adjudicating Authority in the avoidance application filed by the Administrator in the CIRP of SIFL and SEFL. It is relevant to notice that in spite of there being pleading on behalf of the Resolution Professional in its Affidavit filed before the Adjudicating Authority that the funding for obtaining assignment was through SEFL itself, no details have been given by the Appellant to indicate the source of funding especially when there are allegations that the assignment was a fraudulent transaction. It was incumbent on the Appellant to clear the doubt by bringing relevant materials to show that for taking assignment no fund was used through SIFL and SEFL.
It is relevant to reiterate again that the fact that appellant filed its claim on 09.09.2020 in first CIRP on the same date on which it took assignment from SEFL, a date on which it took assignment from SEFL, a related party to Corporate Debtor makes it crystal clear that assignment in favour of appellant was made only for participating in CIRP of Corporate Debtor as assignee of SEFL, hence, appellant the assignee has rightly been held to be related party to the Corporate Debtor.
There are no grounds have been made out to interfere with the impugned order of the Adjudicating Authority by which application has been rejected. There is no merit in the Appeal - appeal dismissed.
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2024 (3) TMI 80
Condonation of delay of only 5 days in filing the Appeal - exclusion of period during which certified copy was under preparation - HELD THAT:- Appellant is entitled only for exclusion of period taken for preparation of certified copy as per Section 12 of the Limitation Act. Present is not a case where Appellant is claiming benefit of exclusion of period during which certified copy was under preparation and Appellant is pressing its case on the basis of uploading of the Order on 22nd November, 2023.
Judgment of the Hon’ble Supreme Court in V NAGARAJAN VERSUS SKS ISPAT AND POWER LTD. & ORS. [2021 (10) TMI 941 - SUPREME COURT] does not render any help to the Appellant nor the Judgment of the Hon’ble Supreme Court in SANJAY PANDURANG KALATE VERSUS VISTRA ITCL (INDIA) LIMITED AND OTHERS [2023 (12) TMI 1249 - SUPREME COURT] comes to aid of the Appellant. As noticed in Sanjay Pandurang Kalate both the counsels were present and there was no dispute between the counsel that no substantive order was passed on 17th May, 2023 by the Adjudicating Authority whereas in the present case order was dictated on 09th November, 2023 which is clear from the report submitted by the Registrar of NCLT. When the order was dictated in the presence of the Learned Counsel for the appellant he cannot be heard in saying that Appellant is not aware of the order and limitation shall not commence from the date of the order and the limitation shall commence only from the date when order is uploaded.
In the present case, the order having been dictated on 09th November, 2023, limitation shall commence from 10th November, 2023 and 30 days period shall come to an end on 09th December, 2023 and 15 days condonable period shall also come to an end on 24th December, 2023 whereas the Appeal was e-filed on 27th December, 2023 i.e. beyond 15 days condonable period.
The Appeal having been field beyond 15 days after expiry of the limitation, the delay condonation application cannot be allowed and the same is dismissed.
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2024 (3) TMI 79
Approval of Resolution Plan - HELD THAT:- It is well settled that commercial wisdom of CoC in approving the resolution plan is not to be interfered by the Adjudicating Authority in its judicial review and limited ground for interference with the resolution plan is only when resolution plan violates or is in non-compliance of Section 30(2) of the Code. The Appellant has no such right that its resolution plan should be approved by the CoC which proposition has already been laid down by the Hon’ble Supreme Court in ARCELORMITTAL INDIA PRIVATE LIMITED VERSUS SATISH KUMAR GUPTA & ORS. [2018 (10) TMI 312 - SUPREME COURT].
There are no ground in this Appeal warranting any interference with the order of the Adjudicating Authority dated 04th January, 2024 by which the Adjudicating Authority has approved the Resolution Plan. The CoC after considering the Resolution Plan of the Appellant and all other Resolution Applicants has approved the resolution plan of Respondent No. 3 with 100% vote share which resolution plan has ultimately been approved by the Adjudicating Authority on 04th January, 2024.
There are no ground to interfere with the order dated 04th January, 2024. There is no merit in the Appeal, the Appeal is dismissed.
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2024 (3) TMI 78
Execution of Conveyance deed - Home Buyers / Commerical property (space) - entitlement to receive the payment of rent as assured in the MoU entered with the allottees and the erstwhile management.
Seeking a direction to Adjudicating Authority to execute the Conveyance Deed - HELD THAT:- It is relevant to notice that although in the impugned order the said prayer of the Applicant was noticed, considered and rejected, but in the Application which was filed by the Appellant, which has been disposed of, there was no prayer for execution of the Conveyance Deed - When there was no prayer in the Application seeking a direction for execution of the Conveyance Deed, there was no occasion to raise objection to the said prayer by the RP in its reply - even though no specific prayer was made, the Adjudicating Authority was not precluded to consider any prayers made in the Application and to entertain any issue with regard to such prayers.
The submission of the Appellant that when the Corporate Debtor is being run as a going concern, it is open for the RP to continue the real estate business of the Corporate Debtor and while running business of real estate Company, execution of Conveyance Deed, payment of rent is part of the said business. There can be no dispute that by virtue of Section 17, 18 and 25, it is duty of the IRP to manage the affairs and take control of the assets over which the Corporate Debtor has ownership rights. The allottees, cannot as a right claim execution of Conveyance Deed, as has been prayed in the present case before the Adjudicating Authority. The RP, who is running the business of the Corporate Debtor is the best person to take a decision as to what part of the business of the Corporate Debtor can be carried out.
There cannot be any dispute to the proposition that the rights of allotees cannot be affected in the CIRP as their interest is to be appropriately preserved and protected, but in what manner, the rights of homebuyers are to be protected and preserved is an issue, which depends on facts of each case and nature and function, which is carried out by the RP, who is vested with the management. Direction issued in the case of in Alok Sharma [2022 (6) TMI 925 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] to execute the Sale Deed has to confine to the facts of the said case and cannot be relied in the present case.
Whether Appellant is entitled to receive the payment of rent as assured in the MoU entered with the allottees and the erstwhile management? - HELD THAT:- The Adjudicating Authority in the impugned order has noticed the statement of the RP that rent received in respect of the units allotted to Applicants has been kept in Fixed Deposit and would be disbursed in accordance with law. The above statement of RP recorded in the impugned order amply protect the interest of the allottees. How the amount received during the CIRP from the shops allotted to the Appellant is a question, which depends on the ultimate decision of the Adjudicating Authority in the CIRP and during the currency of CIRP, the Adjudicating Authority has not committed any error, in not granting prayer of the Appellant to make the payment of entire amount received against the shops allotted to the Appellant - The above order of the Adjudicating Authority amply protects the interest of the Appellant and there are no infirmity in the said order, warranting interference in this Appeal.
Thus, no grounds have been made out to interfere with the impugned order passed by the Adjudicating Authority. The Appeal is dismissed.
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2024 (3) TMI 26
Order of replacement of the appellant by another Resolution Professional - HELD THAT:- The impugned orders are in conformity with the principles laid down in Section 27 of the Insolvency and Bankruptcy Code, 2016. In view of this position, no case for interference with the impugned orders is made out.
Appeal dismissed.
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2024 (3) TMI 25
Maintainability of petition - Declaration sought that the petitioners are not liable to pay any transfer fee as demanded in the notices - seeking to issue mandamus upon the respondents and/or its officers and/or its men and/or its agents and/or its servants to cancel, rescind and revoke the notices - prohibition on respondent and/or its officers and/or its men and/or its agents and/or its servants and/or its assignees from giving any effect or further effect - prohibiting the respondents, their men, agents, servants, subordinates and each one of them from in any manner disturbing or interfering with fullest enjoyment of the rights of the sub-lessee under the sublease.
Maintainability of petition - appeal preferred before the learned NCLAT in view of apprehension of a belated and illegal demand for purported transfer fees from the first respondent in respect of the Kharagpur land - HELD THAT:- The appellants have incessantly tried to convince this Court that waiver of transfer fee was approved by the NCLT, NCLAT and the Hon’ble Supreme Court whereas the fact is otherwise. The waiver as recorded in clause 15.15.5 of the Resolution Plan was not approved by any of the forums and it was unanimously held that such waiver was left open for determination of appropriate authorities, if applied for. Therefore it is crystal clear that the petitioners have made an attempt to obtain an order in their favour by misleading the Court and misconstruing the contents of the orders passed by the NCLT, NCLAT and the Hon’ble Supreme Court deliberately.
Challenge to notices issued by the WBIDC on April 26, 2022 and July 6, 2022 - challenge on the ground that demand raised therein is in violation of the orders passed by the NCLT, NCLAT as well as the Hon’ble Supreme Court - HELD THAT:- The authorities relied upon by the petitioners demonstrate that once a Resolution Plan is duly approved by the adjudicating authority under section 31(1), the claims as provided in the Resolution Plan shall stand frozen and will be binding on the corporate debtor and its employees and also, all such claims which are not part of the Resolution Plan shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the Resolution Plan. The Hon’ble Supreme Court as well as this Court has held in various judgments that change in shareholding of a company does not amount to transfer of its lease-hold interest on the plot in question which will call for payment of permission fees. Unless there is express transfer or assignment of a lease in favour of some other party, it cannot be ordinarily said that there is assignment or transfer of the lease merely because there is transfer of shareholding.
It is trite law that no demand which is not part of the approved Resolution Plan can be raised subsequently. Clause 15.15.5 of the Resolution Plan is reproduced herein below for proper appreciation of the matter in issue - In the case in hand, clause 15.15.5 of the Resolution Plan was not approved at all, thereby authorizing the WBIDC to raise the demand impugned. There is nothing on record to suggest that the petitioners approached the respective authorities for exemption of transfer fee prior to issuance of the notice impugned by the authority.
This Court is inclined to hold that the notices impugned issued by the WBIDC are in conformity with the terms of the Resolution Plan and there is no illegality or irregularity in the notices which calls for interference by this Court - Petition dismissed.
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2024 (3) TMI 24
While permitting withdrawal of Section 9 Application, Adjudicating Authority did not grant liberty to the Appellant to reapproach the Adjudicating Authority in the event of breach of Memorandum of Understanding - HELD THAT:- There was no undertaking by the Operational Creditor that Operational Creditor shall not pursue this matter on the basis of settlement reached between the parties. What was undertaken that in view of the settlement between the parties an application shall be filed for withdrawal/ closure of CIRP - very basis of denial to grant further liberty to the Appellant to reapproach the Adjudicating Authority was fallacious, as the MoU only states that in view of the agreement between the parties, both the parties shall file an application for withdrawal of Section 9 Application, for which no exception can be taken and the Adjudicating Authority rightly allowed the application for withdrawal. However, the MoU cannot be read to mean that the Operational Creditor has relinquished its right to make any further application before the Adjudicating Authority in event any default is committed by the Corporate Debtor.
There was no occasion for declining any further liberty to the Operational Creditor to reapproach to the Adjudicating Authority at the stage when Section 9 Application was withdrawn on the basis of Section 12A Application.
In the MoU, between the parties, neither there was any specific prayer made for revival of the CIRP, nor there was any statement that Operational Creditor has relinquished its right to revive the CIRP. The learned Counsel for the Respondent has relied on judgment of this Tribunal in Amrit Kumar Agrawal vs. Tempo Appliances Pvt. Ltd. [2020 (11) TMI 993 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI]. In the said case, Section 7 Application was dismissed on the ground of default in payment of Settlement Agreement holding that the debt does not come under the definition of financial debt. In the above case, MoU was entered on 22.09.2017 between the Appellant and the Principal Borrower, where Respondent stood as Guarantor. Since, cheques issued by Principal Borrower, were dis-honoured on presentation, the Respondent as guarantor came forward to pay the outstanding amount of Rs.86 lakhs with interest and issued two cheques in consideration of such liability.
This Tribunal held that mere obligation to pay does not bring the liability within the ambit of ‘financial debt’. The above case is clearly distinguishable from the facts of the present case. In the present case, MoU was entered between the parties in proceedings under Section 9, with regard to which default was committed by the Corporate Debtor. The said judgment has no application in the present case.
The order of the Adjudicating Authority insofar as it declines liberty to the Applicant to reapproach the Adjudicating Authority is set aside. The Appeal is partly allowed
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2024 (3) TMI 23
CIRP - Jurisdiction of the Adjudicating Authority to direct consideration of a settlement proposal after approval of a Resolution Plan. - Appellant (Successful Resolution Applicant - SRA) submits that after approval of Resolution Plan of the Appellant by the CoC, there was no occasion for directing consideration of fresh settlement proposal submitted by Ex. Directors to be placed before the CoC - HELD THAT:- The Adjudicating Authority, ought to have allowed opportunity to SRA to respond to the Application (IA No.188 of 2024 filed by Respondent Nos.1 and 2), whose Resolution Plan has been approved by the CoC and which is pending consideration before the Adjudicating Authority. Without giving an opportunity to the Appellant, direction to the CoC to consider the Plan, cannot be sustained.
The Application for approval of Resolution Plan being pending consideration, it shall be open for the Adjudicating Authority to consider IA No.188 of 2024 along with its objection.
The impugned order set aside - appeal disposed off.
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2024 (3) TMI 22
Rejection of section 9 application filed by the Appellant - pre-existing dispute - Allegations have been made in the email that excess amount has been paid to the Appellant and email also says that excess amount should be refunded - HELD THAT:- The submissions of the Learned Counsel for the Appellant that work was completed in March, 2021 and email sent was only moonshine defence cannot be accepted. Averments made in the email raises clear dispute which cannot be said to be moonshine. As per the submission of the Appellant that Corporate Debtor has taken input on the tax invoice sent by the Appellant. It is on record that advance payments were made by the Corporate Debtor and issues whether input tax taken is in excess is the issue which could not be gone into in proceeding under Section 9 of the Code.
It is observed that it shall be open for the Appellant to take such remedy as available under the contract if there are any dues.
Appeal dismissed.
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2024 (3) TMI 21
Withdrawal of CIRP - main contention of the appellant is that as per the provisions of Section 12A of IBC, 2016, CIRP can be withdrawn only on the application of the applicant who had filed the application under Section 7, Section 9 or Section 10 of the Code - HELD THAT:- The Adjudicating Authority has over looked and ignored the fact that Form ‘FA’ has not been signed by the applicant of application under Section 9 of IBC, 2016. No finding in this regard has been given in the impugned order.
The submissions of IRP requesting that the case may be remitted back to NCLT, Chennai as the corporate debtor has failed to honour the settlement agreement is considered - It is held that the Form ‘FA’ was not proper, and was not as prescribed under the provisions of Regulation 30A of IBBI (CIRP) Regulations, 2016 and Section 12A of IBC, 2016 and hold that withdrawal of CIRP was not correct as per Law. The impugned order dated 09.11.2022 is set aside.
Appeal allowed.
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2024 (3) TMI 20
Eviction of the Appellant from the property - handing over the possession of the property in question to the RP (now Liquidator) within 15 days from the passing of the order and the Statutory Authorities i.e. Local Police - HELD THAT:- Section 60(5) of the Code provides the power to the Adjudicating Authority which can be invoked to entertain or dispose of any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and also any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code. Section 238 of the Code creates an overriding effect which provides that the provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.
It was held by the Hon’ble Supreme Court in Gujarat Urja [2021 (3) TMI 340 - SUPREME COURT] that the NCLT has the jurisdiction to adjudicate disputes, which arise solely from or which relate to the insolvency of the corporate debtor but it has also been held that while doing so, the Tribunal may not usurp the legitimate jurisdiction of other courts, tribunals and fora when the dispute is one which does not arise solely from or relate to the insolvency of the corporate debtor and nexus with the insolvency of the corporate debtor must exist - The termination is not on a ground independent of the insolvency, therefore, the dispute in that case solely arising out of and relates to the insolvency of the corporate debtor and it was thus held that the RP can approach the NCLT for adjudication of the dispute that were related to the insolvency resolution.
Similarly, in the present case also, the issue is in regard to the title of the property of the Corporate Debtor which is in CIRP and as per Section 60(5)(c) of the Code the question of fact as to whether the asset of the Corporate Debtor is the property of the Appellant on account of the agreement or is the property of the Corporate Debtor in CIRP is a question relating to the insolvency resolution.
It is also pertinent to mention that the argument raised by the Appellant that the Appellant is entitled to double of the earnest money paid towards the part performance, in view of clause 7 of the agreement is concerned, it would not apply to this case because there was no denial on the part of the Corporate Debtor for the execution of the sale deed rather it was agreed by both the parties that the Appellant shall complete his part of the contract by 30.11.2018 which he had failed to perform, therefore, there are no substance in this argument as well.
There is hardly any merit in this appeal which requires interference by this Court - Appeal dismissed.
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2024 (2) TMI 1472
Admission of section 9 application - time limitation - due date for the payment of the last invoice is 19.09.2014, whereas the application under Section 9 has been filed on 13.12.2018, beyond the period of three years as envisaged under Article 137 of the Limitation Act, 1963 - HELD THAT:- There is no dispute that a Petition under Section 7 or 9 has to be filed within a period of three years in terms of Article 137 of the Act and the period of three years is to be counted from the date when the default had occurred. It is also not in dispute that the Appellant had not taken the defence either in their Reply dated 27.11.2018 filed to the Demand Notice dated 06.11.2018 or in the Reply filed to the application under Section 9. However, it is a well settled that the plea of Limitation can still be setup in Appeal in view of Section 3 of the Act which provides that `subject to the provisions contained in Sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence’.
The plea of Limitation can be setup in defence even in the Appeal if it is not setup before the Tribunal.
Be that as it may, since the question of Limitation is a mixed question of law and fact, therefore, the Appellant was required to setup his defence. In this case, the Respondent has submitted that had the question of Limitation been setup by the Appellant in defence before the Tribunal, he would have led evidence to prove that the period of Limitation had not expired in view of the fact that he had made the payment to the Reliance Industries in the Year 2015 etc., and on the basis of which the Resolution is being sought about the aforesaid invoices. The other thing is that the Memo of dishonoured cheque is dated 18.12.2015.
The issue of Limitation is to be decided after allowing both the Parties to lead their evidence, if any, it is just and expedient to set aside the impugned order and remand the case back to the Tribunal to decide the question of Limitation by affording the Parties an opportunity to lead evidence in support of their case, if any.
Matter on remand.
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2024 (2) TMI 1471
Admission of section 7 application - Appellant's locus standi to file the application - Initiationof insolvency proceedings fraudulently or with malicious intent for any other purpose other than for the resolution of insolvency of the Corporate Debtor.
First ground is that Appellant cannot question the order admitting Section 7 Application which has been affirmed by the Appellate Tribunal - HELD THAT:- It is on record that admission order was affirmed by this Tribunal by its Judgment and Order dated 06th January, 2023. But when we look into the prayers made in application, Appellant has not prayed for recall of the admission order rather the prayer was that Company Petition be dismissed and penalty be imposed under Section 65 and further to conduct enquiries regarding the collusion.
The power under Section 65 of the Code can be exercised by the Adjudicating Authority only after satisfying that grounds as mentioned exist, if the Adjudicating Authority come to the conclusion that insolvency proceedings have been initiated fraudulently or with malicious intent for any other purpose other than for the resolution of insolvency of the Corporate Debtor, it can impose penalty as provided in the provision. While exercising jurisdiction under Section 65, the Adjudicating Authority is also fully entitled to close CIRP process and pass all consequential order. The mere fact that Section 7 Application has been admitted does not denude the jurisdiction of the Adjudicating Authority to examine the application under Section 65 of the Code. The observations of the Adjudicating Authority are that the Appellant is opposing the admission of the proceeding which admission has been affirmed by the Appellate Tribunal. The above does not denude the jurisdiction of the Adjudicating Authority to examine the allegations made in the Section 65 Application even after admission of the proceedings under Section 7.
Locus of appellant - HELD THAT:- Appellant in the Application has given details of the facts, the transaction which is basis of financial debt by the Financial Creditor. The averments prima facie makes it a case for looking in to the allegations more closely and when such glaring facts have come to the Court, the Court need to examine the allegations. Moreso, Appellant’s case is that GGPPL which is also in CIRP, of which the Appellant admittedly is home-buyer has to receive amount from the Corporate Debtor which chance shall also be adversely affected due to commencement of CIRP of the Corporate Debtor. Thus in the facts of the present case, Appellant has locus to file the I.A. No. 4654 of 2023.
The Respondent submitted that Application have been filed belatedly at the stage when Resolution Plan of the Corporate Debtor is under consideration. The mere fact that Application has been filed at the time when plan is under consideration does not take away the jurisdiction of the Adjudicating Authority to consider the allegations and find out the truth, if any - It is well settled that when proceedings have been fraudulently initiated, the appropriate orders can be passed by Court.
The Adjudicating Authority committed error in rejecting the Application without considering the Application on its merit - Appeal disposed off.
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