Landmark Judgments by the Hon’ble NCLAT 1st May to 15th May, 2021
- Vivek Raheja Resolution Professional v. NA (DOJ: 04.05.2021)
In the instant matter, Hon’ble NCLAT extended the Corporate Insolvency Resolution Process for a period beyond 330 days on account of the lockdown. Holding that the country faced pandemic situation due to which proceedings came to a standstill, it further observed that the Adjudicating Authority ought to have considered the situation as exceptional circumstances for the reason prevailing due to which the CIRP process was still at nascent stage.
Relying on the Essar Steel India Ltd. judgment by the Apex Court, the Hon’ble NCLAT held that the Adjudicating Authority and /or this Tribunal may extend time beyond 330 days in exceptional cases. Accordingly, the appeal was disposed of without any cost.
Judgment link: https://nclat.nic.in/Useradmin/upload/160777421560913230abaa5.pdf
- Regional Provident Fund Commissioner Warangal Employees Provident Fund Organization Vs. Vandana Garg & Ors (DOJ: 12.05.2021)
The Hon’ble NCLAT in this case reinstated what was held in the recent case of Ghanashyam Mishra and Sons Private Limited v Edelweiss Asset Reconstruction Company Limited. The appellant had raised a claim of a much higher amount despite filing a claim earlier before the Resolution Professional (RP). The earlier claim filed by the Appellant was considered by the RP while formulating the Resolution Plan of the corporate debtor which was later on approved by the Adjudicating Authority.
It was further observed 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 everyone else related. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of 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. Accordingly, the appeal was dismissed.
Judgment link: https://nclat.nic.in/Useradmin/upload/699024067609bb7ce3d81e.pdf
- Ramasamy Palaniappan Vs. Radhakrishnan Dharmarajan & others (DOJ: 05.05.2021)
In the present matter, it was contended by the Appellant that the RP committed the categorical violation of Regulation 40 C by not considering the interests of all Stakeholders of the Corporate Debtor and merely seeking exclusion of time-period to complete the formalities in the capacity of the RP.
Herein, Form-G was published when Covid was at its peak. Many of the Prospective Resolution Applicants could not visit the hotel premises and further opined that at the time of issue of Form G Covid was at its peak and corporate debtor being into the hospitality industry, was the worst affected due to the pandemic. Relying on Kalpraj Dharamshi v Kotak Investment Advisors Limited of the Supreme Court, it was held by the Hon’ble NCLAT that CoC, under its commercial wisdom, did not prefer for publication of Form-G afresh to invite Expression of India. Such a decision of the CoC is not justiciable. The NCLAT held that the decision taken by the Adjudicating Authority needs no interference. Accordingly, the appeal was dismissed.
Judgment link: https://nclat.nic.in/Useradmin/upload/31594882260928ee8d6ac7.pdf