Insolvency Resolution Professional Is Public Servant, Sanction Needed To Prosecute Him Under Prevention Of Corruption Act: Madras High Court

The Madras High Court has recently directed the Insolvency and Bankruptcy Board of India to consider granting sanction for prosecuting a Resolution Professional for allegedly mismanaging funds of a company during a resolution process. Justice Bharatha Chakravarthy noted that the resolution professional performed duties in connection with the administration of justice, was a person from whom a report was called for by the court of justice, and was performing a public duty. Thus, the...

DM Can Re-Execute Possession Orders U/S 14 Of SARFAESI Act After Illegal Re-Entry By Borrower: MP High Court

A division bench of Madhya Pradesh High Court, comprising Justice Anand Pathak and Justice Hirdesh, has allowed an appeal and upheld that a district magistrate can re-execute possession orders u/s 14 of the SARFAESI Act after illegal re-entry by the borrower. The Court directed the respondent authorities to provide necessary assistance to the petitioner to dispossess the borrower from the mortgaged property. Background of the Case The petitioner granted a certain mortgage loan...

DRT Cannot Reject Consolidated Plea By Tenants Under SARFAESI Act: Kerala High Court

The Kerala High Court has held that the Debts Recovery Tribunal (DRT) cannot reject a consolidated plea by tenants under the SARFAESI Act.The petition was filed, challenging an order passed by the registrar of the DRT 1, Ernakulam. By that order, it declined to register the application preferred by the petitioners against the notice of dispossession served by the Advocate Commissioner. The application was rejected, citing the reason that a consolidated securitisation application was filed...

Writ Petition Is Maintainable Despite Remedy Under IBC, If NCLT Order Is Passed In Violation Of Natural Justice: Kerala High Court

The present writ petition was filed seeking the quashing of an order passed by the NCLT, Kochi Bench. By that impugned order, the adjudicating authority has directed the resolution professional to reject the claim filed by the home buyers, including the petitioner. The corporate debtor, who is the builder and the landowner, entered into an agreement to construct the building named Kerl Trade Centre at Marine Drive, Cochin. Sale deeds were executed by the landowners in favor of the...

Scheme Of Compromise Sanctioned By Court Under Companies Act Cannot Be Frustrated By Invoking Provisions Of SARFAESI Act: Calcutta HC

The Calcutta High Court has ruled that a scheme of arrangement/compromise sanctioned under section 391 of the Companies Act, 1956, cannot be unilaterally frustrated by a secured creditor by invoking the provisions of the SARFAESI Act, 2002. The application was filed, praying for the execution of an order sanctioning a scheme of arrangement/ compromise under section 391(2) of the Companies Act, 1956, as a deemed decree within the meaning of CPC, 1908. The applicant also requested the...

SARFAESI Act | Fresh Notice To Legal Heirs Of Borrower Not Necessary To Take Possession Under S.14: J&K High Court

The Jammu & Kashmir High Court has held that a secured creditor is not required to issue a fresh notice to the legal heirs of a deceased borrower before invoking Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.A Division Bench of Justice Sanjeev Kumar and Justice Sanjay Parihar dismissed a writ petition challenging the proceedings initiated by the bank under Section 14, observing that once notice under Section...

Writ Jurisdiction Cannot Be Invoked When Party Has Already Approached DRT Under SARFAESI Act: Delhi High Court

The Delhi High Court has dismissed a petition while upholding that if a borrower has already approached the Debt Recovery Tribunal (DRT) under the SARFAESI Act, for a one-time settlement, a writ seeking the same relief under Article 226 of the Constitution is not maintainable. Background of the Case The petitioner has availed the credit facilities from the consortium of banks, i.e., Punjab National Bank, Indian Bank, and UCO Bank. Later on, the account of the petitioner was declared...

NCLT Is Bound To Appoint IRP Proposed By Corporate Debtor: Madras High Court

The Madras High Court on Monday held that the suggestions of the financial creditor, operational creditor, or corporate debtor with regard to the appointment of the IRP are liable to be accepted. While hearing a writ petition challenging the appointment of an Interim Resolution Professional (IRP) by the National Company Law Tribunal (NCLT), Chennai, the Madras High Court interpreted Sections 10 and 16 of the Insolvency and Bankruptcy Code, 2016. The petition was filed challenging the...

Liquidated Damages Clause Does Not Permit Automatic Recovery Of Full Amount, Actual Loss Must Be Proven: Delhi High Court

The Delhi High Court bench of Justice Manoj Kumar Ohri has held that the law mandates proof of actual loss despite the presence of an Liquidated Damages (LD) clause and does not allow automatic recovery of the entire LD amount upon breach. Therefore, the Petitioner's unilateral adjustment without adjudication was unlawful. The AT rightly held that such unilateral recovery does not obviate the need for proper adjudication of the LD claim.Brief Facts:The impugned award arose from Contract...

Limitation Act Applies To Proceedings Under Interest On Delayed Payments To Small Scale & Ancillary Industrial Undertakings Act: Telangana High Court

The Telangana High Court bench of Justice P. Sam Koshy and Justice N. Tukaramji have held that the provisions of the Limitation Act, 1963 are applicable to proceedings initiated under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. The Court clarified that the overriding effect under Section 10 of the 1993 Act applies only to the express provisions of that Act and does not exclude the applicability of the Limitation Act in the absence of any...

Calcutta High Court Upholds Order Dismissing Plea Challenging Shift Of NCLT Premises To New Town

The Calcutta High Court has upheld a single bench order declining a plea challenging the move to shift the NCLT Kolkata premises located near the High Court, to a new building in the city's New Town area, as proposed by the Ministry of Corporate Affairs.A division bench of Justices Rajarshi Bharadwaj and Apurba Sinha Ray held: "The question, however, is not whether the shift in location is beneficial or detrimental per se, but whether this Court can, in the exercise of its writ jurisdiction,...

'Facilitates Resolution Process': Madras HC Upholds Circular Allowing Creditor To Recommend Resolution Professional In Application U/S 95 Of IBC

The Madras High Court bench of Justice D.Bharatha Chakravarthy has held that the circular issued by Insolvency and Bankruptcy Board of India (IBBI) on 21.12.2023 under section 196 of the Insolvency and Bankruptcy Code, 2016 (Code), allowing the creditor to recommend the name of a Resolution Professional in an application filed under Section 95 of the Code cannot be deemed ultra vires the provisions of the Code, particularly Section 97, which states that in creditor-initiated insolvency...