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IBC - Case Laws
Showing 601 to 620 of 9152 Records
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2024 (1) TMI 1322
Preferential Transactions or not - Fraudulent Transactions or not - Recovery of amounts illegally paid to related parties - recovery of amounts payable towards the electronic appliances - recovery of amounts payable towards the two wheelers - recovery of amounts of motor vehicles - whether the respondents can be directed to contribute to the assets of the Corporate Debtor for the amount involved in such transactions?
HELD THAT:- The applicant has given details of some transactions claiming that the respondents have siphoned off the total amount of Rs.3.87 crores. Therefore, these transactions of siphoning off the money and performing these transactions are not submitted in the application. This application was listed for orders on 11.12.2023, but orders could not be pronounced on that day as the applicant has not unequivocally clarified the plea of fraudulent transactions. At the request of the learned counsel for the applicant, 10 days’ time was granted till 20.12.2023 to file brief synopsis/ submissions, as last chance. The applicant as well as the respondents have filed Synopsis in compliance of our directions vide order dated 11.12.2023. However, no new facts were added. In view of the same we are unable to decide the transactions of Rs.3.87 crores as tabulated at page 40, whether the same are Preferential Transactions or otherwise. As far as the vehicles are concerned, according to the respondents the same were sold by the husband of R/1 as he was looking after the affairs of the Company even before initiation of CIRP. It is found that the value of these assets is also not verified and even the applicant has not made any plea to treat them as fraudulent transactions, except one vehicle, the ownership of which has been transferred after initiation of CIRP.
Thus, in absence of the requisite information, the transaction of Rs.3.87 crores cannot be classified at a preferential transaction - As regards Innova Crysta Car, its ownership has been transferred to a third person post imitation of CIRP. Hence we treat it a fraudulent transaction intended to defraud the creditors.
As regards section 66(2) (b) of the IBC, 2016 it clearly states that On an application made by a resolution professional during the corporate insolvency resolution process, the Adjudicating Authority may by an order direct that a director or partner of the corporate debtor, as the case may be, shall be liable to make such contribution to the assets of the corporate debtor as it may deem fit, if such director or partner did not exercise due diligence in minimizing the potential loss to the creditors of the corporate debtor. Therefore, relying on the said section of the IBC, 2016, respondents no.1 and 2 are directed to contribute of Rs.13,74,585/- to the assts of the Corporate Debtor.
Application allowed in part.
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2024 (1) TMI 1290
Approval of Resolution Plan - extent and the limitation of the judicial review by the Adjudicating Authority and the Appellate Tribunal in context of a Resolution Plan approved by the CoC with requisite majority - it was held by NCLAT that 'in the facts of the present case, all other parts of the Resolution Plan have not been found to infirm in any manner, there are no case for interfering with the order approving the Resolution Plan.'
HELD THAT:- There are no reason to interfere with the order of the NCLAT since no substantial question of law is involved in the appeal.
Appeal dismissed.
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2024 (1) TMI 1284
Constitutional Validity of Chapter III of the Insolvency and Bankruptcy Code, 2016, more particularly, Section 204 (a) (b) (c) (d) and (e) of the Act - ultra vires the provisions of Article 14, 19 (1) (g) and 21 of the Constitution or not - Whether Regulation 23 A is liable to be struck down as manifestly arbitrary, conferring unbridled, excessive power on IPAs and for violation of principles of natural justice? - Whether Section 204 of IBC is violative of Article 20(2) of the Constitution of India, in as much as it provides for disciplinary proceedings by two agencies, is manifestly arbitrary and prevents access to justice and is illegal for confirming unbridled and excessive powers to the agencies? - Challenge to Regulation 23A - principles of constructive res judicata.
Whether Regulation 23 A is liable to be struck down asmanifestly arbitrary, conferring unbridled, excessive power on IPAs and for violation of principles of natural justice? - HELD THAT:- There is no discretion vested with the IPAs and the suspension is automatic, once the disciplinary proceedings are initiated. Therefore, it can neither be termed as manifestly arbitrary nor be challenged on the ground of any confirmation of unguided/unbridled power - The power of suspension is not a punishment and is an adinterim measure and if one has to be issued with show cause notice, then the very purpose of ad-interim suspension is lost. In as much as ultimate punishment is imposed only on the conclusion of the disciplinary proceedings it cannot be said that any substantial or vested right of the Resolution Professional is violated.
Of course, any suspension, if prolonged, without any inquiry being proceeded with, would cause stigma. But the larger public interest and the laudable purpose behind the rule of suspension and the relative hardship had to be balanced. Only to avoid hardships, normally swift and prompt completion of the process of disciplinary proceedings is insisted upon. Therefore, the petitioner or any other aggrieved professional can only insist upon prompt completion of the proceedings and the hardship cannot be a ground for challenging the very regulation itself.
The constitutional validity of the Regulation 23A of the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 upheld.
Whether Section 204 of IBC is violative of Article 20(2) of the Constitution of India, in as much as it provides for disciplinary proceedings by two agencies, is manifestly arbitrary and prevents access to justice and is illegal for confirming unbridled and excessive powers to the agencies? - HELD THAT:- It is a result of due consideration of an expert report and cannot be termed arbitrary, much less manifestly arbitrary. When a new legislation such as the IBC carrying out major reforms in the field is brought up, as held by the Hon'ble Supreme Court in Pioneer Urban Land and Infrastructure Limited [2019 (8) TMI 532 - SUPREME COURT], the legislature must be given a free play in the joints and there must be room for experimentation and correction also. Therefore, when with the proper application of mind, provision has been incorporated in the IBC for subjecting the Resolution Professionals to be under monitoring and control of two tier system, the same by itself cannot be termed as arbitrary. Even if there is a likelihood of hardship to an individual Resolution Professional, the provision itself cannot be held to be blocking free access to justice.
Moreover mere conferment of authority on IBBI and IPAs for supervision control and disciplinary proceedings by itself cannot be held to be conferring of unbridled power. The Regulations and Bye-laws which are framed under Section 204 of the IBC clearly provide checks and balances. The procedure for taking disciplinary action and the appellate remedies are provided. Therefore, it cannot be said to be confirmation of excessive or unbridled power. Section 204 of IBC is only an enabling provision and therefore, we see no constitutional infirmity in any of the provisions under Section 204 (a) (b) (c) (d) and (e) of IBC.
Challenge to Regulation 23A - principles of constructive res judicata - HELD THAT:- When it comes to the constitutional validity of the self same regulations, the petitioner cannot pick and choose the particular regulation, one after the other on the same grounds or different grounds and repeatedly file Writ Petitions. If aggrieved, the petitioner ought to have challenged the vires of the Regulation 23 A also when he filed the earlier W.P.No.13229 of 2020, challenging the other provisions of the self same regulations and filing of the repeated Writ Petitions would be barred by the principles of constructive res judicata. More specifically, the issue of twin control has been specifically decided by this Court qua the same parties. The entire provisions of IBC were upheld by the Hon’ble Supreme Court of India in Swiss Ribbons (P) Ltd. v. Union of India [2019 (1) TMI 1508 - SUPREME COURT].
The petition is barred by the principles of res judicata and the same is also without any merits as it is declared the Regulation 23 A to be intra vires and without any merit and another unsuccessful successive challenge to the Constitutional vires of IBC.
The Writ Petitions are dismissed.
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2024 (1) TMI 1266
Condonation of delay in filing the Appeal - ground taken in the Application for condonation is that the Order passed by the Adjudicating Authority was passed without giving an opportunity to the Appellant - Violation of principles of natural justice.
Whether Appellant is entitled for benefit of Section 14 of the Limitation Act for excluding the period during which the two applications were pending before the Adjudicating Authority?
HELD THAT:- Hon’ble Supreme Court in KALPRAJ DHARAMSHI & ANR. VERSUS KOTAK INVESTMENT ADVISORS LTD. & ANR. [2021 (3) TMI 496 - SUPREME COURT] had occasion to consider Section 14 of the Limitation Act in reference to Appeal filed under Section 61 of the Code before the Appellate Tribunal. In the above case, Appeal was filed before the Appellate Tribunal against the Order dated 20th November, 2019 on 18.02.2020 - The Hon’ble Supreme Court considered the submissions, noticed the ambit and scope of the Section 14 of the Limitation Act and after noticing the judgments of the Hon’ble Supreme Court in MP. STEEL CORPORATION VERSUS COMMISSIONER OF CENTRAL EXCISE [2015 (4) TMI 849 - SUPREME COURT] and CONSOLIDATED ENGG. ENTERPRISES VERSUS PRINCIPAL SECY. IRRIGATION DEPTT. & ORS. [2008 (4) TMI 668 - SUPREME COURT] held that benefit of Section 14 of the Limitation Act can be extended in Appeal filed under Section 61 of the IBC. Ultimately after elaborate discussion and after noticing the facts of the present case, it was held that Appellant was entitled to exclusion of period during which he was bona fide prosecuting before the High Court with due diligence.
The judgment of Hon’ble Supreme Court thus clearly establishes that benefit of Section 14 of the Limitation Act can be extended in Appeal filed under Section 61 of the IBC. Thus the applicability of Section 14 of the Limitation Act with regard to Appeal under Section 61 is no more res integra.
Hon’ble Supreme Court in Kalpraj Dharamshi has also held that even if Section 14 is not strictly applicable, the principles under Section 14 are attracted. Section 14 of the Limitation Act is applicable in IBC proceeding which is now settled by several judgments of the Hon’ble Supreme Court as well as by virtue of Section 238A of the Code which clarifies about the applicability of limitation act.
Thus, even Section 14 is not attracted the benefit of Section 5 of the limitation act can be extended and the cause can be considered for condonation of delay by applying Section 5 but in the IBC there is a cap on the jurisdiction in condoning the delay as per Section 61(2) proviso, jurisdiction to condone the delay is only of 15 days. Period during which application was pending before the Adjudicating Authority is not excluded under Section 14 of the Limitation Act, the delay in filing the Appeal is beyond 15 days which is not within condonable limit. Thus, delay is beyond 15 days and cannot be condoned.
This Appeal has been filed challenging the Order beyond 45 days. The jurisdiction to condone the delay being limited to 15 days and having held that benefit of Section 14 of the Limitation Act cannot be extended to exclude period during which I.A. No. 2337 of 2023 and I.A. No. 3270 of 2023 remained pending before the Adjudicating Authority, the Delay Condonation Applications which prays condonation of 74 days delay deserves to be dismissed.
Application dismissed.
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2024 (1) TMI 1265
Application seeking direction to release payment as an Operational Creditor, for the services rendered during the CIRP period, dismissed - right to appeal in terms of Section 61(3) of the Code - HELD THAT:- The application filed under Section 60(5) was filed by the Appellant on 01.06.2019. At that time the proceedings in regard to approval of the Resolution Plan was not over. The Appellant did not file any application for staying the approval of the Resolution Plan till the disposal of his application. The Resolution Plan was approved on 27.06.2019 itself and the same has ultimately been approved by the Hon'ble Supreme Court on 28.02.2020. It is also a matter of fact that the Plan has also been implemented. In such circumstances, the application filed under Section 60(5) had lost its sheen as a new right of appeal become available to the Appellant to pursue its remedies in terms of Section 61(3)(iii) and (iv) of the Code before the Appellate Authority. The said procedure was not followed by the Appellant and therefore, in our considered opinion, the application filed under Section 60(5) was not maintainable.
In view of the aforesaid discussion and the fact that Resolution plan was approved way back on 28.02.2020 by the Hon’ble Supreme Court and has been implemented, there are no merit found in the present appeal - appeal dismissed.
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2024 (1) TMI 1257
Rejection of Resolution plan - no related party - Non-inclusion of the Appellant in the Committee of Creditors - entitlement to vote in the Committee of Creditors - categorization of the homebuyers in class as ‘Affected’ and ‘Unaffected’ homebuyers - violation of Section 30(2)(e) of IBC - it was held by NCLAT that no error has been committed by the Adjudicating Authority in rejecting the application - 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 (1) TMI 1256
Issues involved:
The issues involved in the judgment include arguments presented by counsels for respondents, adoption of arguments by another counsel, completion of hearing, submission of notes of submissions by counsels, permission to withdraw a case, and closure of a pending application for impleadment.
Comp. App (AT) (CH) (INS.) No. 302 / 2021:
In Comp. App (AT) (CH) (INS.) No. 302 / 2021, the counsels for respondents R2 to R6, R7, R8, and R9 presented arguments before the Tribunal. Counsel for R8 adopted the arguments of the counsels for R2 to R6. The hearing was completed, and the judgment was reserved. Additionally, Mr. V. Venkata Sivakumar appeared in person for an application in the same case. The Tribunal directed the counsels to file their notes of submissions before a specified date.
Comp. App (AT) (CH) (Ins) No.8 / 2022:
In Comp. App (AT) (CH) (Ins) No.8 / 2022, counsel for the Appellant / Liquidator sought permission to withdraw the case, which was granted. The Tribunal dismissed the case as withdrawn without imposing any costs. The counsel was permitted to file a memo for the withdrawal, and if filed, it would become part of the appeal material papers. The pending application for impleadment was closed without costs.
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2024 (1) TMI 1217
Initiation of CIRP - Date of default - Existence of restructuring proposals - NCLT admitted the application u/s 7 - pre-implementation conditions as stipulated in the restructuring proposals were mandatory or not - failure in its compliance tantamounted to non-execution of the restructuring approvals automatically or not - date of default was covered under Period stipulated under Section 10A of the Code or not - payments of Rs. 50 Crores made by the Corporate Debtor to the financial creditors i.e., the Respondent No. 2 and PFC resulted in automatic extension of restructuring approvals or not - financial viability of the Corporate Debtor as claimed by the Appellant would have impacted the impugned order in deciding the application filed under Section 7 of the code by the Respondent No. 2 or not.
Existence of restructuring proposals - pre-implementation conditions as stipulated in the restructuring proposals were mandatory or not - failure in its compliance tantamounted to non-execution of the restructuring approvals automatically or not - HELD THAT:- The period from the date 25.03.2020 to 24.03.2021, is the period which is required to be excluded for the purpose of initiation of CIRP under Section 7, 9 and 10. Section 10A of the Code also clearly mandates that no application shall ever be filed for initiation of CIRP of a Corporate Debtor for the said default occurring during the said period. It is significant to note that the explanation provided under Section 10A of the Code stipulate that provision of Section 10A shall not apply to any default committed under the said Sections before 25.03.2020. Hence, date of default become critical.
On the failure of the Corporate Debtor to fulfil its obligation to the original common loan agreement and subsequently, further failure to comply with the first restructuring proposal dated 21.02.2020 and further failure to comply with the second restructuring approval dated 29.09.2020, the Appellant, at this stage, cannot take the plea of continuation of all agreements/proposals. Normally, when the restructuring proposal is agreed upon, the same is in supersession to the previous loan agreement/restructuring proposal. Here, it is critical to understand that pre-implementation condition are conditions precedent, which are meant to be followed and it cannot be the case of the borrower that despite his failure to fulfil the conditions precedent, the restructuring proposal should be deemed to be valid, continuing and further deemed to be converted into agreement - In the present case, undisputedly the Corporate Debtor could not make the required payments to the lenders i.e. the Respondent No. 2 as well as PFC and also could not meet with pre-implementation conditions and therefore, the restructuring approval ceased to remain alive and the only valid agreement which survived was the common loan agreement dated 19.06.2013.
Default period falling within period specified under Section 10A of the Code or otherwise? - HELD THAT:- It is evident that the Respondent No. 2 clearly indicated date of default to be 31.03.2018, which is not covered under Section 10A of the Code. Incidentally, the Respondent No. 2 also gave date of NPA of Corporate Debtor i.e., 30.06.2018, which is also out of purview of Section 10A of the Code - the date of default as indicated in Part IV by the Appellant is 31.03.2018 based on first default as per original common loan agreement. The Adjudicating Authority has considered 31.03.2021 as a date of default based on the second restructuring approval dated 29.09.2020. We have already noted that as per Section 10A of the Code, the period is specified is from 25.03.2020 to 24.03.2021. Thus, either of the dates i.e., 31.03.2018 or 31.03.2021 are clearly out of purview of Section 10A of the Code.
Payments of Rs. 50 Crores made by the Corporate Debtor to the financial creditors i.e., the Respondent No. 2 and PFC resulted in automatic extension of restructuring approvals or not - HELD THAT:- The plea of the Appellant regarding existence and continuation of default under first restructuring proposal is wrong as the Corporate Debtor itself has submitted in I.A. No. 1020/KB/2020 filed by the them before the Adjudicating Authority in which the Corporate Debtor sought reliance solely on the Second Restructuring Proposal submitting that the Corporate debtor was required to make payment from 31.03.2021, without contending that there was any payment obligations or default continuing from first restructuring proposal - there are no force in the pleading of the Appellant on this issue.
Financial viability of the Corporate Debtor as claimed by the Appellant would have impacted the impugned order in deciding the application filed under Section 7 of the code by the Respondent No. 2 or not - HELD THAT:- It is recaptured from pleadings of the appellant that the Corporate Debtor has raised bills of Rs. 916.95 Crores from WBSEDCL and during Financial Year 2022-23, the Corporate Debtor earned EBITDA of Rs. 308 Crores and therefore, the company was solvent. During averments, the Appellant also agreed to pay outstanding amounts as per restructuring approvals around Rs. 103 Crores lying in the credit of TRA account - there has been continuous and repeated failure on the part of the Corporate Debtor to meet its obligation in making payment of principals and interest as per original common loan agreement and also failure to meet obligations as per first and second revised Restructuring Approvals. In backdrop of all these information, it is not found that so-called claim made by the Appellant about viability of the Corporate Debtor has any legal or factual force to impact the outcome of Section 7 application as contained in the Impugned Order.
Appeal dismissed.
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2024 (1) TMI 1166
Undervalued/Preferential/wrongful transaction - exclusion of rights in the Trade Mark “Gloster" from the assets of the corporate Debtor - it is argued that the dispute is in regard to the title over the registered trademark for which the jurisdiction vests with the District Court in terms of Section 134 of the Act, 1999 and the Adjudicating Authority cannot take a decision under Section 60(5) of the Code - HELD THAT:- It is found that the legislature has used the different language in Section 43 and 45 of the Code because in Section 43, the RP or the liquidator has to form an opinion whereas in Section 45 the RP or the liquidator has to examine and then determine that the transaction in question were undervalued during the relevant period. In the case of Anuj Jain [2020 (2) TMI 1700 - SUPREME COURT] the Hon’ble Supreme Court has also held that specific material facts are required to be pleaded if a transaction is sought to be brought under the mischief sought to be remedied by Sections 45/46/47 or Section 66 of the Code. It further said that it is expected of any resolution professional to keep such requirements in view while making a motion to the Adjudicating Authoritybut in any case the action could not have been taken under Section 43 and 45 without there being an application moved by the RP.
In the present case, the CoC was apprised in its 5th meeting that the forensic audit report found no preferential, undervalued, fraudulent or wrongful trading transactions nor it has found any related party preferential or fraudulent transaction whatsoever, therefore, only on the basis that the trademark was hypothecated for a bigger amount and has been assigned for lesser amount would not be a criteria for the purpose of declaring it to be undervalued transaction without there being sufficient material before the Adjudicating Authority to pass such an order, therefore, the finding recorded in this regard is not in accordance with law and thus reversed.
The present appeal is hereby allowed and the impugned order is set aside.
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2024 (1) TMI 1165
Seeking withdrawal of CIRP - dismissal merely on the ground of commercial wisdom of the CoC without looking into spirit of the Code, which is meant for revival of the Corporate Debtor and not for recovery mechanism for the bankers - Section 12A r/w Regulation 30 A for CIRP Regulation 2016 - HELD THAT:- In view of provisions laid down under Section 12A of IBC, it is crystal clear that, once CoC is constituted, there is a mandatory requirement of 90% of the voting shares of the CoC in favour of the resolution for withdrawal of the CIRP of the Corporate Debtor and if the voting of the CoC is below 90% then the application of withdrawal cannot be allowed and hence it need to be dismissed. In the present case the Respondent No. 1 with 19.94% voting did not support 12A Application filed by the Corporate Debtor, hence the Adjudicating Authority rightly gave its verdict.
Section 12A of the Code is very clear that any withdrawal of CIRP by the Appellant need to have minimum voting support of 90% of the CoC and in the present case never met this threshold. Thus, the Adjudicating Authority could not direct for settlement to the HDFC in contravention of the Code.
On taking into consideration the various judgments where it has been held by the Hon’ble Supreme Court of India that commercial wisdom is non judiciable and there is extremely limited scope for judicial intervention.
There are no merit in the appeal - appeal dismissed.
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2024 (1) TMI 1164
CIRP - Rejection of Application seeking intervention - Locus to file application - infringement of rights - Approval of resolution plan (offer) of another party - HELD THAT:- The impugned order of the Adjudicating Authority clearly indicates that Adjudicating Authority proceeded to consider the objections raised by the Appellant to the process under which RP and CoC has approved the offer submitted by Respondent No.2. The Adjudicating Authority proceeded to examine the said contention on merits and has rejected the same by the impugned order. The fact that Adjudicating Authority proceeded to examine the contentions raised by the Appellant on merits itself indicate that objections raised by the Appellant required consideration. The Adjudicating Authority proceeding to examine the objections on merits and thereafter saying that Appellant has no locus is a contradiction in itself.
On looking into the facts and sequence of events, the Appellant has submitted offer after receipt of EOI and RFRP for Resolution Plan. The Appellant also revised its offer and had negotiation with CoC and RP, which is a fact established from the record. The RP and CoC interacted with the Appellant in respect of its offer and it appears that on the basis of the offer submitted by the Appellant Right of First Refusal was exercised by Respondent No.2 and consequently offer was received Company Appeal (AT) (Insolvency) No.1650 of 2023 10 from Respondent No.2, which find favour by the CoC. The Appellant, who participated in the process cannot be said to be a person having no locus to object the Application filed by the RP for approval of offer submitted by Respondent No.2.
Appeal disposed off.
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2024 (1) TMI 1021
Approval of Resolution Plan - conditions precedent pending before the NCLAT - adjustment of a Performance Bank Guarantee (PBG) - HELD THAT:- Conditional on compliance with the three conditions, SBI stated that it would be willing to withdraw both the company appeals which were pending before the NCLAT as well as the Civil Appeals which were pending before this Court, details of which were set out in the affidavit. The offer which was made by SBI on behalf of the lenders had to be complied with as it stood in the event that the SRA sought the benefit of the offer. According to the SRA, the PBG was liable to be released on adjustment in terms of the Resolution Plan. This is a matter which would have to await an adjudication by NCLAT in the pending appeal. The impugned order of the NCLAT, on the other hand, allowed the plea of the SRA for adjustment and consequential release of the PBG at the interlocutory stage.
Infusion of Rs 350 crores, as envisaged in the affidavit, could not have been substituted with a direction for adjustment of the PBG, at that stage. Infusion meant that the third tranche has to be paid in the same manner. Adjustment of the PBG was not permissible.
SBI has stated that the lenders have been saddled with huge recurring expenditure every month to maintain the remaining airline assets of the Corporate Debtor. The lenders have been embroiled in litigation before the NCLT and NCLAT with little progress on this ground towards implementing the resolution plan. Such a state of affairs cannot be permitted to continue interminably as it defeats the very object and purpose of the provisions of and timelines under the IBC. The timely resolution of insolvency cases is vital for sustaining the effectiveness and credibility of the insolvency framework. Therefore, concerted efforts and decisive actions are imperative to break the deadlock and ensure the expeditious implementation of the resolution plan.
The order dated 28 August 2023 of the NCLAT is modified in part and, hence, the permission which was granted to the SRA to adjust the last tranche of Rs 150 crores against the PBG - The NCLAT is requested to endeavour an expeditious disposal of the appeal by the end of March 2024.
The appeals are accordingly disposed of.
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2024 (1) TMI 979
The Supreme Court of India dismissed the appeal as withdrawn by the appellant, with all contentions left open. No comments or observations were made regarding the second request. Justices Sanjiv Khanna and S.V.N. Bhatti presided over the case.
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2024 (1) TMI 964
CIRP - Principles of natural justice - refusal to give another opportunity to the Appellant to file a reply and the right to reply involving settlement discussions - HELD THAT:- It is not needed to enter into emails sent by the parties since the Adjudicating Authority has given sufficient opportunity to the Appellant to file a reply which has not yet been filed, we see no error in the order impugned refusing to give another opportunity to Appellant to file a reply. However, it shall be open for the Appellant to make submissions before the Adjudicating Authority and with the leave of the Adjudicating Authority may also file written submissions.
There is no merit in the Appeal - The Appeal is dismissed.
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2024 (1) TMI 938
Violation of principles of natural justice - Failure to clear the fees and expenses of period IRP - Impugned Order passed issuing contempt notice and the explanation which was submitted in the Affidavit filed has not been adverted to - Wilful disobedience or the order - entitlement of fees of the IRP - HELD THAT:- There is no denial that in pursuance of order dated 01.12.2022, Rs. 5 Lakh has not been deposited. The stand taken by the Appellant is that said amount is towards fee and expenses for the IRP and expenses are being regularly paid. He submits that appellant is always ready to pay the reasonable fees to the IRP and the Affidavit which was filed on 28th November, 2023, explanation has not been adverted to. Had the Adjudicating Authority adverted to the Affidavit filed by the Financial Creditor on 28th November, 2023, there would not have been any observation that there has been wilful disobedience of the Order.
The ends of justice be served in setting aside the order dated 29th November, 2023 and remitting the matter to the Adjudicating Authority for hearing afresh considering the affidavit dated 28th November, 2023 filed by the Appellant and pass the order - appeal disposed off.
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2024 (1) TMI 900
Time Limitation - Date of default as stated in the petition under Section 7 of the Insolvency and Bankruptcy Code 2016 - HELD THAT:- Issue notice, returnable on 22 January 2024.
List the Civil Appeal on 22 January 2024.
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2024 (1) TMI 899
Seeking extension of time for implementation of the Plan - seeking relaxation of timelines of a period more than 8 months to implement the Resolution Plan - HELD THAT:- Having regard to the scope and objective of Insolvency and Bankruptcy Code, 2016, to avoid Companies going into Liquidation, as Liquidation of the Corporate Debtor should be a matter of last resort; that the IBC recognizes a wider public interest in resolving corporate insolvencies and its object is not the mere recovery of monies due and outstanding; that the Successful Resolution Applicant has indicated its bona fide, at least prima facie at the present stage, to complete the implementation of the `Resolution Plan’; and therefore, this `Tribunal’ is of the considered view that powers under Rule 11, can be exercised in the facts of this matter and the aforenoted Proposal given by the Successful Resolution Applicant, be accepted.
Appeal disposed off.
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2024 (1) TMI 898
Condonation of delay of 10 days, in filing of the present appeals - sufficient reasons for delay or not - Seeking a direction to the Respondent therein to place the resolution plan submitted by the him before the CoC for consideration alongwith other resolution plans - HELD THAT:- The undisputed facts are that both the appeals have been filed against the order dated 20.07.2023. The first appeal has been filed when the application filed by the Appellant for seeking direction to the Respondent therein to place the resolution plan submitted by the Applicant before the CoC for its consideration alongwith other resolution plans and further to stay the voting results of the resolution plan, which is put for voting pending disposal of the application filed by the Applicant has been dismissed and the second appeal has been filed by the Appellant because the application filed by the RP of the Corporate Debtor for approval of the resolution plan submitted by SRA was approved. Both the appeals have been filed on 28.08.2023. The first Appeal has been filed with the free certified copy made available on 01.08.2023 whereas the second appeal has been filed with a copy of order which is alleged to have been shared by the RP on 07.08.2023.
Three issues emerges in this case, firstly, the Appellant is guilty of suppressio veri and suggestio falsi who has made a totally wrong averments in para 6 and 17 of the grounds of appeal which has been declared and verified to be correct and also filed an affidavit in support of it because, firstly, the appeal is not within the limitation though a declaration is made in para 6 of the grounds of appeal that the Appeal is within the period specified in Section 61 of the Code and secondly the Appellant has obtained the certified copy (paid copy) applying the same for it on 01.08.2023 and received the same on 10.08.2023, therefore, the period of 10 days deserves to be excluded in terms of the Section 12 of the Act, 1963. Secondly, the Appellant has not even applied for the certified copy (paid copy) at all in filing of the appeals and even one application has been filed i.e. I.A. No. 1118 of 2023 for dispensing with the filing of the certified copy. Thirdly, the Appellant has taken totally a new stand in the application for condonation of delay when an objection was raised by the Respondents that the appeal is not within the period of limitation. In the application filed for condonation of delay, the ground taken is that the limitation is to be counted from the date when free certified copy was made available in so far as the first appeal is concerned whereas no such plea has been taken in so far as the second appeal is concerned in which the averment has been made that the appeal has been filed with the copy given by the RP and lastly even if there is a delay of 10 days for which the application has been filed for condonation of delay, no ground has been made out for the purpose of condoning the delay which would fall within the parameters of sufficient cause.
There are no merit in the present applications and the same are hereby dismissed.
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2024 (1) TMI 897
Seeking Recall of the Order - Appeal was dismissed on the ground that there was a Debt and a Default and that the Section 7 Application filed by the Respondent / Financial Creditor was not barred by Limitation - HELD THAT:- Keeping in view that all the issues raised by the Applicant in the Recall Application has been addressed to in detail and this Tribunal, does not find any existence of Fraud, Collusion, an Error or a Mistake, nor any Ignorance of any fact that a Necessary Party, had not been served at all or had expired or that the Estate was not represented and therefore, there are no grounds at all to entertain this Recall Application.
This Tribunal is of the considered view that in the garb of this Recall Application, the Applicant is trying to reargue the entire matter on Limitation, Acknowledgement, under Section 18 of the Limitation Act, 1963, Jural Relationship and the Locus.
Keeping in view the grounds raised and this Tribunal’s limited Jurisdiction, there are no substantial reasons to entertain this Recall Application and hence, the same is dismissed accordingly.
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2024 (1) TMI 896
Penalty u/s 65 of the Insolvency and Bankruptcy Code, 2016 on assenting CoC members - assenting CoC members jointly voted in favour of the liquidation of the CD without even exploring the possibility of resolution of the Corporate Debtor - HELD THAT:- There is no dispute that the CoC took a decision for liquidation of the CD after holding five meetings and by voting share of 88.48 per cent which meets the criteria laid down in Section 33(2) of the Code. There is an error in the approach of the Adjudicating Authority that for the purpose of taking a decision regarding the liquidation of the CD, the CoC has to complete all the steps regarding resolution of the CD because it would be against the spirit of Section 33(2) and explanation appended to it wherein the legislature has used the word any time twice i.e., firstly, in Section 33(2) and secondly, in the explanation of Section 33(2) of the Code that the CoC has the jurisdiction to pass the order of liquidation of the CD, approving it by not less than sixty six per cent of the voting share, but it should be before the confirmation of the resolution plan.
In the case of Sunil S. Kakkad [2020 (8) TMI 392 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], this Court has categorically framed a question as to whether the RP, with the approval of the CoC with sixty six per cent vote share, directly proceed for the liquidation of CD without taking any steps for resolution of the CD. In the said case, there were three meetings of CoC in which without making endeavour for inviting EOI, the CoC unanimously resolved to liquidate the CD and that issue came for adjudication before this Court in which while referring to Section 33(2) and the explanation appended thereto it has been ordered that the CoC has the power to liquidate the CD before confirmation of the resolution plan.
The Adjudicating Authority has not given any reason for forming an opinion much less prima facie that it was a case of malicious intent on the part of the Applicant/RP with the connivance of assenting members of CoC to whom the show cause notice was given and finally the provision of Section 65 has no application because it would apply if the application is filed for the purpose other than liquidation.
The impugned order does not deserve to survive and hence, the present appeal is allowed.
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