Sole Financial Creditor Can't Entertain Request For One-Time Settlement Once CIRP Proceedings Have Commenced: Telangana High Court

Telangana High Court has dismissed a Writ petition filed by Mandava Holdings Private Limited challenging the rejection of the one-time settlement (OTS) proposal offer made to PTC India Financial Services Limited so as to stop CIRPC proceedings without considering the RBI framework for compromise settlement and technical write-offs.The petitioner contended that PTC India Financial Services Limited was wrong in approving the resolution plan without considering the settlement offer and prayed that...

Delisting Regulations Of SEBI Not Applicable To Delisting Of Equity Shares Under Resolution Plan: Bombay High Court

The Bombay High Court bench of Justices M.S.Sonak and Jitendra Jain has held that Delisting Regulations framed by the SEBI would not be applicable to the delisting of shares of the company in pursuance of the approval of a Resolution Plan under section 31 of the code. Brief Facts In this case, the petitioner challenges the vires of Regulation 3(2)(b)(i) of the SEBI Delisiting Regulations, 2021 on the ground that it is violative of the SEBI Act. Along with this, the petitioner also...

Asset Deposited By Corporate Debtor As Security Before CIRP Commencement Continues To Be Asset Of Corporate Debtor: Bombay High Court

The Bombay High Court bench of Justices B.P. Colabawalla and Somasekhar Sundaresan has held that monies or any other asset deposited by a corporate debtor in court prior to commencement of CIRP by way of security would continue to be the asset of the corporate debtor.Brief Facts:The Appellant (Corporate Debtor) was directed to pay Rs. 12 lakh as damages along with interest at the rate of 24% p.a to the Respondent in a judgment dated 13.06.2016. In an appeal challenging the said judgment, an...

All Claims Prior To Approval Of Resolution Plan Stand Extinguished U/S 31 Of IBC: Bombay High Court

The Bombay High Court Bench of Justices Bharati Dangre and Abhay J Mantri held that once the petitioner has acquired the assets of the corporate debtor, the claims, if any, which were not raised, stand extinguished and the respondent cannot now seek to recover those claims from the petitioner, who acquired the assets of the corporate debtor through auction process under the IBC. Brief Facts The petitioner Company, incorporated under the provisions of the Companies Act, 2013 and...

Bombay High Court Upholds Suspension Of Resolution Professional For Deficiency In Discharge Of Duties

The Bombay High Court bench of Justices A.S. Chandurkar and Rajesh S. Patil has upheld that the suspension order passed by the Disciplinary Committee of the Insolvency and Bankruptcy Board of India (IBBI) against the Resolution Professional (RP) for lack of due diligence in verifying the Resolution Plan and non-intimation of the claims of an operational creditor. Facts: The Petitioner, Vijendra Kumar Jain was appointed as the RP of M/s Transparent Energy System Pvt. Ltd. (Corporate...

Resolution Professional At S.94/95 Stage Cannot Decide On Maintainability Of Petition By Entering Into Merits: Karnataka High Court

The Karnataka High Court Bench of Justice N.V. Anjaria and K.V. Aravind, held that the role of the Registrar while registering the application under Section 95 of the Insolvency and Bankruptcy Code (IBC) is not adjudicatory in nature and this duty of the Registrar, NCLT was in no way adjudicatory trapping. Application of judicial mind towards merits has no place in discharge of a ministerial or clerical function. Brief Facts A petition under section 95 of the IBC was...

Bombay High Court Holds Redevelopment Rights of Society Not Part Of Moratorium Process; Issues Writ Of Mandamus For Redevelopment, Upholding Right to Shelter

The Bombay High Court division bench of Justices Kamal Khata and M.S. Sonak has held that if the developer fails to meet its obligations under the Development Agreement, such as paying transit rent and completing construction within the specified time frame, there is a complete failure of consideration, and no rights accrue to it. The court awarded a writ of mandamus for permissions and approvals for redevelopment. It observed that the uncertain outcome of a Corporate Insolvency...

All Claims Before Approval Of Resolution Plan Are Extinguished Once Plan Is Approved U/S 31 Of IBC: Orissa High Court

The Orissa High Court Bench of Mr. Justice D.Dash and Mr. Justice V. Narasingh held that all liabilities of the corporate debtor prior to approval of resolution plan stand extinguished once the plan is approved under section 31 of the Insolvency and Bankruptcy Code (IBC). In this case, three writ petitions were filed against demand letters issued by the state (opposite parties) demanding statutory dues. Brief Facts The State Bank of India (financial creditor) filed an application...

Ruchi Soya (Patanjali) – Claim Not Included In Approved Resolution Plan Stand Extinguished : Karnataka High Court

The Karnataka High Court division bench comprising Mr. Justice S.G. Pandit and Mr. Justice C.M. Poonacha has held that once a resolution plan is approved by the Adjudicating Authority under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 (IBC), claims which are not included in the resolution plan are extinguished, and no further proceedings can be initiated against the corporate debtor in respect of such claims. The Court also clarified that Rule 22 of the Customs, Excise and...

Himachal Pradesh High Court Affirms Clean Slate Theory, Declares Tax Authorities' Charge Over Properties After Acquisition Plan Void And Illegal

In an important judgment delivered by the Himachal Pradesh High Court, the claims and red entries of the state tax department over the properties of Su-Kam Power Systems Ltd.(Corporate Debtor) were quashed. The corporate debtor was sold as a going concern under the provisions of the Insolvency and Bankruptcy Code (IBC). The court held that once the company was acquired and resolution plan was approved, all prior claims including claims of the tax authorities are extinguished. Brief...

Adjudicating Authority Decides Fairness And Reasonableness While Approving Resolution Plan, High Court Cannot- Delhi High Court

In a significant judgement, the Delhi High Court affirmed the commercial wisdom of the committee of creditors (CoC). The case was pertaining to rejection of the resolution plan proposed by the petitioner despite offering the highest bid in e-auction in a Corporate Insolvency resolution Plan (CIRP) of Helio Photo Voltaic Pvt. Ltd. (Corporate Debtor). Brief Facts It was claimed by the petitioner who was one of the Resolution Applicants (RA) that it was the highest bidder in the...