- M/s Orbit Electro Equipments Pvt. Ltd. v. Mr. Kapil Dev Taneja (DOJ: 2nd July, 2021)
In the present matter, Hon’ble NCLAT held that the Adjudicating Authority cannot remit back an approved Resolution Plan to CoC, as they become functus officio.
The appeal was preferred against the impugned order of the Adjudicating Authority to remit back the approved Resolution Plan to the CoC for fresh consideration and to forfeit the amounts already paid by the successful resolution applicant. Hon’ble NCLAT held that the Adjudicating Authority had exceeded its jurisdiction in directing suo motu the reconsideration of an already approved Resolution Plan, as after such approval the CoC becomes functus officio. The Tribunal further clarified that the course of action on failure of the approved Resolution Plan is liquidation, on an application under section 33(3) and (4) of the Code.
Accordingly, the impugned order was set aside and the present appeal was allowed.
Judgment link: https://bit.ly/3eo82jo
- R Corporation (Proprietorship Firm) v. Shri Ravi Kapoor, Liquidator of City Tiles Ltd. (DOJ: 5th July, 2021)
Hon’ble NCLAT in this case held that no appeal is allowed against the decision taken by the stakeholders consultation committee (SCC) and Liquidator with respect to taking the process further through e-auction if the Adjudicating Authority is yet to pass any order.
In the present matter, the Liquidator has gone for e-auction based on the advice of the SCC and this action is yet to be approved or disapproved by the Adjudicating Authority. The appellant preferred the current appeal against the decision taken by the SCC and Liquidator going ahead with the e-auction under Section 61 of the Code where the appeal can be filed only against the order of the Adjudicating Authority vide Section 61(1) of the Code. The Hon’ble Tribunal observed that the present appeal is not right for review before this Tribunal as no order has been passed by the Adjudicating Authority.
The appeal was held devoid of merit both on fact and law and was accordingly dismissed.
Judgment link: https://bit.ly/3wGPbGu
- Anuj Tejpal Director, of the Suspended Board of Directors OYO Hotels and Homes Private Limited v. Rakesh Yadav (DOJ: 7th July, 2021)
In the present matter, it was held that after admission of a CIRP application, Hon’ble NCLAT, on a case to case basis can exercise its inherent power under Rule 11 of NCLAT Rules, 2016, if parties are interested to settle the matter prior to constitution of CoC.
The instant appeal was preferred by the erstwhile Director of the corporate debtor against the order of admission of application under section 9 of the Code filed by the operational creditor. It was filed under Rule 11 read with Rule 31 of the NCLAT Rules, 2016 seeking a direction to set aside the impugned order, in exercise of the inherent powers of this Tribunal under Rule 11, in view of the settlement arrived at between the parties. It was further stated that all disputes, claims and counter claims of the operational creditor qua respondents stand settled to the full satisfaction of the parties and the operational creditor issued letter to that effect.
Consequently, the Tribunal relying on catena of judgments by the Hon’ble Supreme Court reiterated that the prime objective of the Code i.e. not recovery, but revival and accordingly exercised its inherent powers under Rule 11 to settle the matter before constitution of CoC.
Judgment link: https://bit.ly/3xK1XVQ
- Lotus City Plot Buyers Welfare Association v. Three C Homes Pvt. Ltd & Ors. (DOJ: 8th July, 2021)
In the instant matter, Hon’ble NCLAT held that although the Resolution Plan tends to provide a higher value than the Liquidation but in case of real estate project, it is not a feasible idea as the homebuyers are in a dire need of their home at the earliest.
The Adjudicating Authority had rejected the resolution plan and the Resolution Professional was directed to file Liquidation application. This Tribunal observed that there is a difference in CoC where the members are banks and institutional lenders from the CoC constituted in case of the present matter where it comprises of the homebuyers who are not experts in finance and related valuations. Hence, CoC in case of the commercial organisations will have a different perspective and expertise while in case of Real Estate projects they may not have the same expertise and perspective even though there is a provision for Authorized Representatives, but even he cannot be equated with the expertise with the banking professional will have.
Consequently, the Tribunal held that certain reconciliations are required with respect to the actual realisable value which the homebuyers are getting. Accordingly, the matter was remanded back to the Adjudicating Authority to review the programme at length.
Judgment link: https://bit.ly/3hHXOwo
- Vijay Radhakrishnan v. Bijoy P Pulipra, Resolution Professional PVS Memorial Hospital Pvt. Ltd. (DOJ: 9th July, 2021)
In the instant matter, Hon’ble NCLAT held that a small difference of 15.62% between the two Registered Valuers in regard to the valuation made is not a substantial one in order to warrant an appointment of a third Valuer as per CIRP Regulation 35(1)(a)(b) and (c).
The appellant made a strenuous endeavor before the Tribunal on the basis of variance of 15.62% in valuation, on which the Tribunal presented an observation that the value presented by the two valuers are only an estimate. The difference in each of the Valuer’s Report is certainly a possibility and hence the difference can be termed as minimal in view of the fact that the Fair Value and Liquidation Value were made, taking into account variety of considerations. An important point pertaining to the estimated values that cannot be brushed aside is the consequent aid that the Valuation Report shall provide to CoC in taking a commercial decision accordingly. Consequently, the plea for the appointment of third Valuer was negated by the Hon’ble Tribunal stating that the difference of valuation is not material as per Regulation 35(1)(a)(b) and (c) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
Accordingly, the appeal was dismissed without any cost.
Judgment link: https://bit.ly/2TcdFtr