Personal Hearing By Way Of Exchange Of Chat Messages Not An Effective Opportunity Of Personal Hearing: Calcutta High Court

The Calcutta High Court has ruled that personal hearing conducted by way of exchange of chat messages cannot be said to be an effective opportunity of personal hearing to the assessee and that it does not satisfy the test of fairness or the principles of fair play. The Bench, consisting of Justices T.S. Sivagnanam and Hiranmay Bhattacharyya, reiterated that the moment an insolvency petition is admitted, in view of the moratorium that comes into effect under Section 14(1)(a) of the...

Offences And Penalties Under IBC

Before enacting the Insolvency and Bankruptcy Code, 2016 ("Code"), the law governing insolvency and bankruptcy was multitudinous. The erstwhile framework created ambiguity leading to problems like multiple forums and lack of business or financial expertise. A company may adopt a successful business model although, it may fail to repay its creditors. The insolvency process incorporated under the Code preserves the economic value of the business by helping the creditors and debtors to agree...

NCLAT Upholds Dismissal Of Section 7 Petition Filed By Hinduja Leyland Finance Ltd. During The Prohibited Period; Grants Liberty To Re-File With Corrected Documents

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Ms. Shreesha Merla (Technical Member) and Mr. Naresh Salecha (Technical Member), while adjudicating an appeal in Hinduja Leyland Finance Ltd. v Fly Express Logistic Pvt. Ltd., has upheld that Corporate Insolvency Resolution Process ("CIRP") cannot be initiated over a default which had occurred in the period mentioned under Section 10A of the Insolvency and...

IBC Cases Weekly Round UP: 16th To 22nd May, 2022

SUPREME COURT 1. Supreme Court Declares Noida As An Operational Creditor Under The Insolvency And Bankruptcy Code, 2016 Case title: New Okhla Industrial Development Authority v Anand Sonbhadra Case No.: Civil Appeal No. 2222 of 2021 The Supreme Court Bench comprising of Justice KM Joseph and Justice Hrishikesh Roy has upheld the NCLAT judgment wherein it was held that the NOIDA is an Operational Creditor under IBC and not a Financial Creditor. The order was passed on ...

Non-Payment Of TDS Amount Not A Ground For Initiating CIRP: NCLAT Delhi Imposes Cost Of Rs. 1 Lakh On The Applicant

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Ms. Shreesha Merla (Technical Member) and Shri Naresh Salecha (Technical Member), while adjudicating an appeal filed in Amitabh Roy v Master Development Management (India) Pvt. Ltd, has held that an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 ("IBC") cannot be admitted over defaults relating to non-payment of TDS (Tax Deduction at Source)...

IBC AND RBI Guidelines Are 'Disjoint Sets', "There Is No Question Of One Prevailing Over The Other": NCLT Kolkata Dismisses Application Filed By SREI Ex Promoter Hemant Kanoria

The National Company Law Tribunal ("NCLT"), Kolkata Bench, comprising of Shri Rajasekhar V.K. (Judicial Member) and Shri Balraj Joshi (Technical Member), while adjudicating an application filed in Reserve Bank of India v SREI Infrastructure Finance Ltd., has held that the Insolvency and Bankruptcy Code, 2016 ("IBC") and the RBI Guidelines do not prevail over each other as they have different scope and purpose. The NCLT does not have jurisdiction to adjudicate upon an audit conducted...

Section 18 Limitation Act Is Applicable To IBC Proceedings, Reiterates Supreme Court

The Supreme Court observed that the provisions of Section 18 of the Limitation Act are applicable to proceedings under the Insolvency and Bankruptcy Code, 2016.An acknowledgement in a balance sheet without a qualification can furnish a legitimate basis for determining as to whether the period of limitation would stand extended, so long as the acknowledgement was within a period of three years from the original date of default, the bench comprising Justices DY Chandrachud and Surya Kant...

Rejected Claims By Resolution Professional In Insolvency Proceedings, To Be Decided By The Arbitrator: Delhi High Court

The High Court of Delhi held that the claims rejected by Resolution Professional in the insolvency proceedings on the ground that they arose after the Insolvency Commencement Date (ICD), are to be decided by the arbitrator. The Court held that extinguishment of claims that arose after the Insolvency Commencement Date (ICD) is a contentious issue that is to be decided by the arbitrator when the parties have an arbitration agreement. The Court reiterated that the scope under Section...

SARFAESI Proceedings Cannot Be Continued Against Corporate Debtor Once CIRP Is Admitted And Moratorium Is Ordered: Supreme Court

The Supreme Court observed that the proceedings under the SARFAESI Act cannot be continued once the CIRP is initiated and the moratorium is ordered.The bench comprising Justices L. Nageswara Rao and B R Gavai noted that, in such a situation, any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the SARFAESI Act is prohibited.In this case, the Indian Overseas Bank had extended certain credit...

Joint Auction Under IBC And SARFAESI Is Permissible: NCLAT

National Company Law Appellate Tribunal (NCLAT) Principal Bench comprising of Justice Ashok Bhushan and Ms. Shreesha Merla in the case of Ayan Mallick versus Pratime Bayal upheld the Order of NCLT, Kolkata wherein NCLT held that a joint auction under the provision of Insolvency and Bankruptcy Code, 2016 (IBC/Code) and SARFAESI, 2002 is permissible in order to maximise the value of the assets of the Corporate Debtor. The Suspended director of the Corporate Debtor filed the appeal before...

Supreme Court Declares Noida As An Operational Creditor Under The Insolvency And Bankruptcy Code, 2016

Supreme Court in the case of New Okhla Industrial Development Authority versus Anand Sonbhadra held that the NOIDA is an operational creditor under the provisions of the Insolvency and Bankruptcy Code, 2016. (IBC/Code) The Bench comprising of Justice KM Joseph and Justice Hrishikesh Roy dismissed the appeal filed by NOIDA against the judgment of the National Company Law Appellate Tribunal (NCLAT) wherein NCLAT held that the NOIDA is an operational Creditor under IBC and cannot be...

All Related Proceedings Stand Discharged, Settled, Abated, & Extinguished On Approval Of Resolution Plan: Gujarat High Court

The Gujarat High Court reiterates the legal position and has allowed the civil application filed by Essar Steel Limited seeking declarations that the claims raised by the original espondent stand abated and extinguished in view of Section 31(1) of the Insolvency and Bankruptcy Code read with the Resolution Plan and the judgement passed by the Supreme Court in Essar Steel India Limited vs Satish Kumar Gupta and Ors. The Applicant (Arcelor Mittal Nippon Steel India Ltd) formerly...