IBC

1. BSE Limited Vs. KCCL Plastic Limited (DOJ: 17.12.2021)

The instant appeal was filed before the Hon’ble NCLAT against the impugned order of NCLT Ahmedabad Bench, whereby the NCLT had rejected an application filed by the Appellant u/s 9 of the Code as barred by limitation, claiming ‘Annual Listing Fee’ as operational debt. The Hon’ble NCLAT after observing the factual matrix of the case decided concur with the order of the NCLT, and held that Listing Fees comes under the ambit of ‘Regulatory dues’ which the SEBI is entitled to recover. Therefore, the dues in the form of Listing Fee are not ‘Operational Dues’ but ‘Regulatory Dues.’ Accordinlgy, the present Appeal was dismissed.

Link: https://ibbi.gov.in//uploads/order/a0f7fc4019363f7c9769673811ffd0bb.pdf

2. Prerna Singh Vs. CoC of  M/s Xalta Food and Beverages Pvt. Ltd. (DOJ: 17.12.2021)

In the instant case the Hon’ble NCLAT dealt with the issue as to whether the right of lessor to recover rent is affected on account of moratorium and consequently the lessor is entitled to recover the rent and which shall include in CIRP costs. The Hon’ble NCLAT observed that Regulation 31 of CIRP Regulations define the ‘Insolvency Resolution Process Costs’. In present case Regulation 31(b) is relevant which provides that ‘amounts due to a person whose rights are prejudicially affected on account of the moratorium imposed under Section 14(1)(d)’ as due to moratorium period, the lessor could not recover the possession of the property from the Corporate Debtor. Thus, the Hon’ble NCLAT held that the right of lessor to recover rent is affected on account of moratorium and the lessor is entitled to recover the rent, which shall be included in CIRP costs.

Link: https://efiling.nclat.gov.in/nclat/order_view.php?path=

3. Axis Bank Limited Vs. Value Infracon India Private Limited (DOJ: 20.12.2021)

In the instant case, the Hon’ble NCLAT dealt with the question as to whether a Bank can be considered as a Financial Creditor on account of it having sanctioned housing loans to some of the allottees who have purchased Flats/units in the Project floated by the Corporate Debtor.

The Hon’ble NCLAT considering the judgment of the Hon’ble Supreme Court in the case of Pioneer Urban Land & Infrastructure Ltd. & Anr.’ Vs. ‘Union of India & Ors. observed that it is the home buyers who should be considered as Financial Creditors of the Corporate Debtor, whether they have self-financed their flat or have exercised their choice of taking a loan from a bank. Furthermore, the Hon’ble NCLAT observed that as per Section 77 of the Companies Act, 2013 no ‘charge’ had been created against any of the property of the Corporate Debtor in favour of the Appellant therefore a mere ‘Permission to Mortgage’ is of no relevance in the absence of not having ‘registered a charge’. Hence the present Appeal was dismissed.

Link: https://ibbi.gov.in//uploads/order/40f01b00cd4e063bd5ff0dffbf851fae.pdf

4. Krrish Realtech Private Limited (DOJ: 21.12.2021)

In the instant Appeal the issue that arose before the Hon’ble NCLAT was whether NCLT before admission of a Pre-Packaged Insolvency Resolution Process Application (PPIRP) under Section 54C of IBC can, hear Objectors/ Interveners. The Hon’ble NCLAT, without going into the merits of the claims of the interveners held that the Scheme under Chapter III-A and the Regulations 2021 do not contain any express provision either prohibiting NCLT from hearing any of the objectors or interveners prior to the admission of PPIRP application or providing for giving notice or hearing to the interveners or objectors. Furthermore, the Hon’ble NCLAT observed that u/s 424 (1) of the Companies Act, 2013 the NCLT has to follow the principle of natural justice while addressing matters. Hence, the statutory scheme delineated by Chapter III-A of the Code as well as the Regulations, 2021 does not indicate any prohibition on the NCLT to hear any objector or intervener before admitting an application of PPIRP. Therefore, the NCLT was not wrong in allowing the objectors/interveners to file their objections. Hence the present Appeal was dismissed.

Link: https://ibbi.gov.in//uploads/order/e7a249a17800229402418bf358d57894.pdf

5. S. Buildtech Pvt. Ltd. Vs. Ardee Infrastructure Venture Pvt. Ltd. (DOJ: 23.12.2021)

The Appellant filed the present Appeal challenging the order of NCLT whereby the NCLT rejected the Section 7 IBC Application on two grounds firstly that the last repayment having been made on 15.03.2016 and the Application under Section 7 having been filed on 20.03.2020 i.e. beyond three years, Application is barred by time. Secondly, the Appellant/ Applicant does not come within the definition of Financial Creditor since there is no document to show any interest has ever been paid to the Applicant by the Corporate Debtor in lieu of the amount.

The Hon’ble NCLAT in view of the judgments of the Hon’ble Supreme Court in the case of Dena Bank vs. C. Shivakumar Reddy and Ors. and Asset Reconstruction Company (India) Limited vs. Bishal Jaiswal and Anr. has been pleased to observe that acknowledgment in the Balance Sheet is sufficient acknowledgment under Section 18 of the Limitation Act, 1963. Section 18 of the Limitation Act, 1963 is fully applicable to proceedings under the Code and entries in books of accounts and/ or balance sheets of a Corporate Debtor would amount to an acknowledgment under Section 18 of the Limitation Act. Furthermore, the Hon’ble NCLAT observed that as per definition under Section 5(8) of the IBC, ‘financial debt’ means a debt alongwith interest, if any. Thus, a financial debt may be with interest, if any. The definition clearly contemplates that debt along with interest is not mandatory to be there it to be a financial debt and interest will be a part of the debt only if there is interest in the transaction. Thus, the Hon’ble NCLAT set aside the order of NCLT and remitted the matter back to NCLT for fresh consideration into the Balance Sheet and the Application under Section 7.

Link: https://efiling.nclat.gov.in/nclat/order_view.php?path=