- Pratap Technocrats Pvt Ltd & Ors v. Monitoring Committee of Reliance Infratel & Anr
In this case, Hon’ble NCLAT held that the concept of Equitable treatment is available for claim only creditors that are similarly situated. Operational creditors are entitled to receive a minimum payment that is not less than liquidation value. However, the same is not applicable on Financial Creditors. Operational Creditors stand at a different footing as compared to Financial Creditors.
It was further observed by the NCLAT that, the appellant admittedly being Operation Creditor cannot claim that they have been treated unfairly or inequitably with regards to distribution of funds under the approved Resolution Plan as Operational Creditors other than related parties and Statutory Creditors have been allocated 19.62% of the upfront payment of Rs.3,720 crores while the Financial Creditors have been paid only 10.32% of the upfront payment. As a result, since the claims of the operational creditors have been admitted partly, they cannot claim that they have been discriminated. Accordingly, the appeal was dismissed as no merits were found.
- Ranjeet Kumar Verma v. Committee of Creditors of Straight Edge Contract Pvt Ltd Through RP (DOJ: 04-01-2021)
It was held by the NCLAT that the replacement done by the Committee of Creditors with 100% vote share stands undisputed, especially since the actual vote share requirement is 66%. The dispute in the present appeal was that the COC being related to the Corporate Debtor has colluded with the CD and with 100% vote sharing replaced the appellant IRP with the new Resolution Professional. NCLAT further held that it is indisputable that the appellant has no vested legal interest and shall not have the right to continue once the decision is taken by the COC to replace him. Accordingly, the appeal was dismissed as the appellant has no locus standi to maintain this appeal as he cannot claim that there has been any invasion of his legal rights or under the I&B Code as he is not a stakeholder. Moreover, Committee of Creditors which decided to replace Appellant was itself constituted by the Appellant and he would not be permitted to argue that the COC was bad.
- Sri D Srinivasa Rao v. Vaishnovi Infratech Ltd. (DOJ: 05-01-2021)
Hon’ble NCLAT held that the Demand Notice having been returned unserved would amount to non-delivery of notice but where the Corporate Debtor who refused to accept delivery of notice, the Adjudicating Authority would not be justified in coming to conclusion that notice has not been served on the Corporate Debtor. In the instant case, it was established through speed post that the addressee, i.e. the CD had refused the service of the demand notice as it was the same address where the CD was first served after which he did make an appearance before the Adjudicating Authority. This clearly proved the fact that the present matter is not the case of non-delivery.
Since the impugned order by the Adjudicating Authority suffers from grave legal infirmity, and was set aside and the appeal was allowed.
- Aster Technologies Pvt Ltd v. Solas Fire Safety Equipment Pvt Ltd (DOJ: 06.01.2021)
In the instant case, Hon’ble NCLAT held that the Adjudicating Authority cannot direct an Operation Creditor to settle the matter outside the tribunal only because Operational Debt was a meagre amount of Rs 4.35 lakhs. Instead it must admit the application under Section 9. The Appellant (OC) filed an application under Section 9 before the NCLT, Bengaluru Bench which issued notice to the respondent. Even though the Notice had been served successfully, no one had appeared on behalf of the Respondent. As a result, the Adjudicating Authority instead of admitting the application of Section 9, directed the respondent to settle the issue outside.
The Appellate Bench further held that the approach of the NCLT was not in accordance of the law and highly inappropriate and the Impugned Order was set aside, remanding back the matter to the Adjudicating Authority, to consider the application as per provisions of IBC and to decide the same as per law, after hearing the parties. The Appellant and Respondent are directed to appear before the Adjudicating Authority on 27th January, 2021.
- Himadri Foods Ltd v. Credit Suisse Funds AG (DOJ: 07.01.2021)
In the present matter, the Adjudicating Authority had disposed off Company Petition due to the Settlement Agreement between the parties. Later, an application was moved for the revival of the Company Petition which was allowed by the Adjudicating Authority and the petition was restored. Instant appeal was preferred by the erstwhile Directors against the impugned order on the ground that revival could not be allowed by invoking Rule 11 of the NCLT Rules, 2016.
The contention of the appellant was that since one of the Operational Creditors had already initiated the CIRP under Section 9, the present appeal should be rendered infructuous. Hon’ble NCLAT held that the terms of the Agreement were incorporated in the Order, making it an order/decree of the Court. As a result, providing freedom to the Financial Creditor on any grounds other than non-compliance of the terms of the Settlement Agreement shall not be allowed. The NCLAT observed that the development that has taken place in commencement of CIRP at the instance of another Creditor viz. an Operational Creditor against the Corporate Debtor, the relief sought in the instant appeal no more survives for consideration. The appeal is accordingly dismissed.
- Mohit Minerals Ltd v. Nidhi Impotrade Pvt Ltd (DOJ: 08.01.2021)
In this case, while referring to a judgment by the Hon’ble Apex Court in the matter of Macquire Bank Ltd v. Shilpi Cable Technologies Ltd, wherein it was held that a demand notice delivered by an Advocate duly instructed by the Operational Creditor would be a valid demand notice for the purpose of initiation of the CIRP; the NCLAT held that, similarly notice delivered could not be held to be bad in law unless it was shown that the lawyer was not duly instructed.
The Adjudicating Authority dismissed the Application filed by the Operation Creditor under Section 9 for initiation of the CIRP holding that the demand notice was issued without any authority and was not backed by the Board Resolution of the OC. However, NCLAT observed that this finding is unsustainable as the Advocate in this matter was clearly instructed by the OC and accordingly, order of the Adjudicating Authority was set aside and the appeal was allowed.
- Kalinga Allied Industries India Pvt Ltd v. Hindustan Coils & Ors (DOJ: 11.01.2021)
In this appeal, the NCLAT held that when an Application for approval of Resolution Plan is pending before the Adjudicating Authority, it must not entertain an application made by a person who did not participate in the CIRP, even if such a person is ready to a heavier amount than the successful Resolution Applicant. If a Resolution Plan is considered beyond time limit established for it, it will turn into a never ending process.
In the instant matter, the Appellant submitted its Resolution Plan which was approved by the COC with the requisite majority in its 13th meeting, after several rounds of discussions and deliberations. Thereafter various objections were filed before the Adjudicating Authority which were heard and disposed. Later on, another Resolution Applicant filed an application before the Adjudicating Authority seeking directions for consideration of its Resolution Plan as it offered 12% more than the offer of the successful Resolution Applicant (Appellant here). The Adjudicating Authority directed that the proposed Resolution Plan (by the Respondent here) be placed before the COC for consideration. Being aggrieved with this order, the Appellant filed this Appeal.
The NCLAT held that the impugned order is not sustainable in law as well as in facts and was set aside the Appeal was allowed with the directions to the Adjudicating Authority to prceed with the Application filed by the RP for approval of Resolution Plan as per law.
- Harkirat Singh Bedi v. Oriental Bank of Commerce & Ors (DOJ: 12.01.2021)
The present appeal was filed by an erstwhile promoter of the Corporate Debtor (IDEB Projects Private Limited) against impugned order dated 08.11.2019 by the Adjudicating Authority, for liquidation of the CD, on the contention that the COC abruptly decided to reject the Plan and also did not seek extension for CIRP from the Adjudicating Authority. The Appellant was declared as wilful defaulter by SBI, SBT and OBC and the Resolution Plan submitted by him cannot be considered as per section 29 A(b) of the IBC. The High Court, vide its order dated 23.08.2019 permitted the Appellant to submit Resolution Plan. The COC discussed and rejected the Resolution Plan.
The NCLAT held that the contention of the Appellant is invalid as it is the commercial wisdom of the COC whether they want to seek extension of time or not, after considering the feasibility and viability of the submitted resolution plan. Accordingly, the Appeal was dismissed and there was no infirmity found in the Order of the Adjudicating Authority.