IBC

1) State Bank of India v. Krishidhan Seeds Pvt Ltd (DOJ 17.11.2020)

The date of filing of the Application in the prescribed format to the Adjudicating Authority was nearly four years after the date on which the default occurred. The Appellant assails that the impugned order primarily on the ground that there was an Acknowledgment by the Corporate Debtor through revival letter extending the period of limitation which is said to have been overlooked by the Adjudicating Authority.  NCLAT held that there cannot be two defaults in respect of the same debt, one for the purpose of claim filed before the Debts Recovery Tribunal and the other for the purposes of I&B Code based on OTS proposal, more so when an is an application filed before the Adjudicating Authority in prescribed format and the date of default has unambiguously been reflected beyond three years of the occurrence of default. Such an application is hopelessly time-barred and shall not be permissible for Appellant. The petition was dismissed at the threshold.

Judgment link: https://nclat.nic.in/Useradmin/upload/19846434365fb502a11fbfd.pdf

2) Hindustan Oil Exploration Company v. Erstwhile Committee of Creditors JEKPL Pvt Ltd & Ors (DOJ 17.11.2020)

The Appellant, in this case, is the ‘Unsuccessful Resolution Applicant’ whose resolution plan was rejected by the Committee of Creditors.  He contested the impugned order on the ground that the erstwhile CoCs of the Corporate Debtor, in connivance with the successful Resolution Applicant, accepted a re-negotiated plan and the application of the CoC under section 60(5) of the I&B Code filed before the Adjudicating Authority was not maintainable and should not have been accepted by it since the CoC had become functus officio after approval of the Resolution Plan. It was held by the NCLAT that an Unsuccessful Resolution Applicant has no locus to question the implementation of the approved Resolution Plan of the Successful Resolution Applicant

Judgment link: https://nclat.nic.in/Useradmin/upload/917637895fb3bf41027fe.pdf

3) Ratna Singh & Anr v. Theme Export Pvt Ltd (DOJ 18.11.2020)

In this case, the Ex-Directors of the Corporate Debtor filed an appeal aggrieved by the decision of the Adjudicating Authority praying for a stay on the liquidation proceedings and quashing the earlier impugned liquidation. The Appellants claimed that the present Directors committed fraud and embezzled money to one of the Respondents. It was observed by the NCLAT that an appeal against a liquidation order can be filed only on the grounds of material irregularity or fraud committed in relation to a liquidation order. Since there was no such irregularity or fraud in relation to the impugned order, NCLAT upheld the order passed by the Adjudicating Authority. It further observed that IBC is not meant for initiating proceedings for prevention of oppression and mismanagement but is armed with provisions under Part-II, Chapter III for initiation of actions against wrong doers/ illegal transactions, etc.

Judgment link: https://nclat.nic.in/Useradmin/upload/986211485fb6390611213.pdf

4) Narinder Bhushan Aggarwal v. Little Bee International Pvt Ltd & Anr (DOJ 18.11.2020)

The Appellant is the liquidator, and is aggrieved of the NCLT order only to the extent of remuneration of Liquidator which in terms of the impugned order is directed to be payable as per Regulation 4(2) and 4(3) of the Liquidation Process Regulations 2016 and not under Regulation 39D of the CIRP Regulations.

NCLAT held that it is immaterial which provision of the IBC squarely governs the passage of order of liquidation. The fact remains that the Committee of Creditors has taken a decision in regard to the liquidation costs, expenses and the remuneration payable to the liquidator which in the light of the recommendation of the Committee of Creditors with the requisite percentage brings it within the ambit of Regulation 39D. Therefore, it is not permissible to take resort to any other provision which would be attracted only if the action of the Committee of Creditors would fall beyond the purview of Regulation 39D.

The remuneration of liquidator falling within the realm of the Committee of Creditors in terms of Regulation 39D, it was found that the impugned order cannot be sustained. The impugned order was set aside to the limited extent of remuneration of the liquidator and it was directed that the liquidator’s remuneration will be governed in accordance with the recommendations of the Committee of Creditors. The appeal was accordingly disposed of.

Judgment link: https://nclat.nic.in/Useradmin/upload/7960199515fb509568abcc.pdf

5) Diwan Chand Arya v. Government of Sikkim (DOJ 23.11.2020)

The Appellant was appointed as a Resolution Professional and was replaced by another person on the basis of an impugned order passed by the Adjudicating Authority during CIRP. The order was passed under Section 22 of the I&B Code on the 4^th CoC meeting wherein after deliberations and 97.98% voting shares, it was confirmed that the appellant should be replaced. NCLAT held that, if the conduct of CIRP was disapproved by the CoC, the Resolution Professional has no vested right of foisting himself on the CoC for his continuance. The appeal was dismissed.

Judgment link: https://nclat.nic.in/Useradmin/upload/13118056155fbba4037b4b5.pdf

6) Sandeep Sharma & Anr v. Sunil Kumar Jain Resolution Professional RP & Ors  (DOJ 23.11.2020)

Appellants are members of the suspended Board of Directors of the Corporate Debtor made this appeal against the impugned order claiming that the CIRP was not conducted according to the law and that no information was provided to them as they were dismissed. They were told that the only legal option available to them was the objection to the Resolution Plan. NCLAT held that suspended BoD can raise their objection before the CoC before approval of the Resolution Plan and in case of after approval, raise before the Adjudicating Authority at the stage of consideration of the Resolution Plan. NCLAT opined that the issue raised, in the nature of material irregularity in the process of the Corporate Insolvency Resolution Process, is bereft of substance. The Appellants are at liberty to raise their grievances as regards the Committee of Creditors approved Resolution Plan not conforming to the law when such Resolution Plan is taken up for consideration by the Adjudicating Authority under Section 31 of the Insolvency and Bankruptcy Code, 2016. The appeal was dismissed at the threshold.

Judgment link: https://nclat.nic.in/Useradmin/upload/52279715fbba3e09b2dc.pdf

7) Silpco Constructions Pvt Ltd v. Yogesh Gupta, Liquidator of Kohinoor Power Pvt Ltd  (DOJ 23.11.2020)

The Appellant claims to be the Operational Creditor of the Corporate Debtor/Respondent and prayed to allow the Appellant to remove its construction equipment and other material lying at the site of the CD. It is claimed by the Appellant that the Corporate Debtor threw out the labour illegally and detained the equipment and other belongings of the Appellant. Civil Judge (Senior Division), Alipor passed ad interim injunction directing maintaining of status quo and permitted the Corporate Debtor to continue work for the project. Appellant also filed Money Suit No. 05 of 2013 before Civil Judge against the Corporate Debtor along with an Application for an injunction. Civil Judge, Seraikella appointed one Commissioner on application by Appellant to make an inventory of the equipment at the site and the said Commissioner submitted his report with the list of equipment kept at site and stored in the container of the Appellant which is at the site and that it was locked.

By the impugned Order, the Adjudicating Authority after considering the suits pending asked the Appellant to go and get the order of injunction passed by Civil Judge (Senior Division), vacated and then to approach the Adjudicating Authority.  NCLAT disposed of this Appeal with the liberty to the Appellant to approach Civil Court for return of the disputed equipment, machinery, etc. although, liquidation proceedings are pending, as there is no dispute that the equipment, machinery etc. concerned are belonging to the Appellant and not the property of the Corporate Debtor.

Judgment link: https://nclat.nic.in/Useradmin/upload/19757059325fbe07695e650.pdf

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