IBC

1. Drip Capital Inc. vs. Concord Creations (India) P. Ltd. (DOJ: 08.11.2021)

In the instant case, the issue that arose before the Hon’ble NCLAT was whether NCLT was legally justified in dismissing the application u/s 7 of the Code by holding that the Corporate Debtor is not a Insolvent Company and should be given more time to repay the debt etc. Especially after admitting the fact that debt is due and payable by the Corporate Debtor.

The Hon’ble NCLAT set aside the impugned order by observing that the said observation of NCLT is in negation of the principles laid down in judgement of the Hon’ble Supreme Court in Innovative Industries Ltd. Vs. ICICI Bank. The Hon’ble NCLAT held that the impugned order suffers from patent legal infirmities as NCLT exceeded its jurisdiction by taking the defense of the Corporate Debtor. The initiation of CIRP does not amount to recovery proceedings and the NCLT at the time of determination as to whether to admit or reject an application u/s 7 of the Code is not to take into account the reasons for the Corporate Debtor’s default. Hence, the appeal was allowed.

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

2. Greater Noida Industrial Development Authority vs. Mr. Dinesh Chandra Agarwal (IRP) & Anr (DOJ: 10.11.2021)

In the instant case, Greater Noida Industrial Development Authority (GNIDA) filed an application u/s 60(5) of the Code challenging the decision of RP sought for recall of resolution plan approval order passed by NCLT. The Appellant claimed they were unaware of the CIRP proceedings and could not submit their claims in a timely manner.

The Hon’ble NCLAT after observing the timelines in the case held that the appellant was well aware of the ongoing CIRP and had sufficient time to file its claims. By being remiss, it has not only missed the opportunity to file claim, but has also filed claim after much delay, after the lapse of respective limitations. Further, the Hon’ble Tribunal relying on the judgements of the Hon’ble Supreme Court in the matter of Committee of Creditors of Essar Steel India Limited vz. Satish Kumar Gupta and Ors., and Ghanashyam Mishra and Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. held that once the Resolution Plan has been implemented after approval by NCLT, any further claim(s) cannot be considered as it would amount to a ‘hydra head popping up’, which would throw into uncertainty amounts payable by a prospective Resolution Applicant who successfully takes over the business of the Corporate Debtor. Accordingly, the Appeal was dismissed.

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

3. Sudip Dutta @ Sudip Bijoy Dutta vs. Deepika Bhugra Prasad & Anr. (DOJ: 10.11.2021)

In the present case, the Appellant is an ex-Director of the Corporate Debtor who is aggrieved by the order of liquidation passed by the NCLT in view of rejection of resolution plan by the CoC. The Appellant contends that he submitted several One Time Settlement (OTS) proposals to the creditor proposing better returns as compared to the returns in liquidation, but the same were rejected by the CoC. The Hon’ble NCLAT  relying on the judgement of Hon’ble Supreme Court in the matter of Kalparaj Dharamshi vs Kotak Advisories Limited observed that the commercial wisdom of the COC is not open to judicial intervention, unless there is a legal fallacy in its decision. In instant case, there was no legal weakness in the decision of the CoC nor any infirmity in the order under section 33 of NCLT on which the liquidation order has been challenged. Thus, the decision of CoC was taken in its commercial wisdom, should prevail unless such a decision has some legal infirmity. Accordingly, the appeal was dismissed.

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

4. Committee of Creditors of Educomp Solutions Limited vs. Mr. Mahender Kumar Khandelwal (DOJ: 12.11.2021)

In the instant case an Appeal was filed by the Committee of Creditors of the Corporate Debtor, M/s. Educomp Solutions Limited, whereby the NCLT had rejected the Plan Approval Application filed by the RP, as being infructuous on the ground that the Application filed by the Resolution Applicant seeking withdrawal of the  Resolution Plan has been allowed. The Hon’ble NCLAT relying on the judgement of Hon’ble Supreme Court in the matter of Ebix Singapore Pvt. Ltd. Vs. Committee of Creditors of Educomp Solutions Ltd. & Anr. observed that there is no scope for effecting further modification or withdrawal of Resolution Plans which is approved by the CoC, at the behest of the Successful Resolution Applicant once the Plan has been submitted to the NCLT. This Hon’ble Tribunal further observed that a submitted Resolution Plan is binding and irrevocable as between the CoC and the Successful Resolution Applicant in terms of the provisions of the Code and the CIRP Regulations and thus, the Resolution Applicant is bound by the Plan. Accordingly, the Appeal was allowed with a direction for restoration of  Plan Approval Application.

Link: https://efiling.nclat.gov.in/nclat/order_view.php

5. Unigold System vs. Fortune Spirit Limited (DOJ: 12.11.2021)

In the instant case the Appellant is an Operational Creditor who is aggrieved by the order of dismissal of section 9 application by NCLT, same being time barred. The Appellant averred that amounts were due to it against the goods supplied to the Corporate Debtor for which invoices was raised. The Respondent contended that there was no running account maintained between the parties thus there was no acknowledgement of debt.

This Hon’ble Tribunal after analysing the financial statements of the Corporate Debtor and the correspondences between the parties observed that the Appellant periodically raised invoices and in view of continuous transactions vide purchased orders raised between the parties a ‘running account’ is established for purposes of acknowledgment of debt. Further, this Hon’ble Tribunal after considering Section 18 and 19 of the Limitation Act, 1963 held that if an acknowledgement of amount due is made within the period of limitation, the period of limitation will be extended and the new date will be computed from the date of such acknowledgement. Hence the application u/s 9 was filed within the period of limitation and the appeal was allowed.

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