Supreme Court
IBC | Difference Between 'Avoidance Transactions' & 'Fraudulent Or Wrongful Trading' : Supreme Court Explains
The Supreme Court, in its recent decision in Piramal Capital and Housing Finance Ltd v. 63 Moons Technology explained the key difference between how the Insolvency and Bankruptcy Code 2016 deals with avoidance transactions and transactions relating to fraudulent or wrongful trading. Notably, under the IBC 2016, 'avoidance transactions' are specific transactions conducted by a corporate debtor prior to insolvency proceedings that are deemed detrimental to the interests of creditors....
Supreme Court Upholds Piramal's Resolution Plan For DHFL, Sets Aside NCLAT Order
The Supreme Court today (April 1) approved the Resolution Plan proposed by Piramal Capita and Housing Finance for the erstwhile Dewan Housing Finance Corporation Ltd(DHFL).The Court held that funds recovered from the fraudulent transactions at Dewan Housing Finance Corporation Ltd (DHFL) will go to Piramal Capital & Housing Finance Ltd.The Court set aside the NCLAT order, which directed the creditors of Dewan Housing Finance Corporation Limited (DHFL) to reconsider the resolution plan...
IBC | Supreme Court Accepts Apology Of Tax Authorities For Asking Successful Resolution Applicant To Pay Dues Not Covered By Approved Plan
Giving the benefit of doubt and accepting their unconditional apology, the Supreme Court today disposed of a contempt petition filed against Chhattisgarh tax authorities for raising demand notices against a successful resolution applicant over claims in respect of a period prior to the approval of the resolution plan."we have no hesitation in holding that the demands raised by the respondents/authorities for a period prior to the date on which the learned NCLT has approved the Resolution Plan...
IBC | Once Resolution Plan Approved, Dues Not Part Of It Get Extinguished : Supreme Court Rejects Post-Resolution Income Tax Demand
The Supreme Court today (March 20) declined a claim raised by the Income Tax Department to include a tax demand in a Resolution Plan after it was approved by the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016 (IBC).Citing the case of Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. (2021) 9 SCC 657, which held that all claims not included in the resolution plan are extinguished upon its approval, the bench comprising Justices Abhay S. Oka...
No S.138 NI Act Case Against Ex-Director Of Company When Cause Of Action Arose After IBC Moratorium Was Declared: Supreme Court
The Supreme Court held that if the cause of action for the offence of cheque dishonour under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) has arisen after the declaration of moratorium with respect to the company as per the Insolvency & Bankruptcy Code, 2016 (IBC), then the proceedings under S.138 NI Act cannot be continued against the ex-director of the company. The Court reasoned that upon imposition of the moratorium, the board of directors' powers are suspended, and...
Supreme Court Wonders Why NCLAT Wrote Long Order On Delay Condonation Application Despite High Pendency
The Supreme Court recently expressed surprise that the National Company Law Appellate Tribunal (NCLAT), despite having a high pendency of cases, devoted extensive time and effort to writing a 17-page order on a delay condonation application.A bench of Justice Abhay Oka and Justice Ujjal Bhuyan remarked that lengthy submissions and pleadings by members of the Bar often contribute to unnecessarily verbose orders.“We wonder why the NCLAT which has a high pendency should devote so much of time and...
IBC Moratorium Does Not Bar Execution Of Penalties Imposed Under Consumer Protection Act : Supreme Court
In a significant development, the Supreme Court today (March 4) ruled that an interim moratorium under Section 96 of the Insolvency & Bankruptcy Code, 2016 (“IBC”) does not apply to penalty proceedings under Section 27 of the Consumer Protection Act, 1986 (“CP Act”). The Court explained that Section 79(15) of the IBC excludes certain liabilities, such as fines and penalties, from the moratorium's effect. As a result, penalties imposed by Consumer Redressal Forums under the regulatory...
Supreme Court Disapproves Of High Court Interdicting Insolvency Process Against Personal Guarantor At Threshold Stage In Writ Jurisdiction
The Supreme Court while deciding an appeal pertaining to insolvency proceedings initiated against a personal guarantor, observed that the High Court should not have prohibited such proceedings by holding that the guarantor's liability has been waived. “It is well-settled that when statutory tribunals are constituted to adjudicate and determine certain questions of law and fact, the High Courts do not substitute themselves as the decision-making authority while exercising judicial review.,” the...
IBC | For Resolution Plan Involving Combination, Prior Approval Of Competition Commission Mandatory Before CoC Examination : Supreme Court
The Supreme Court on January 29, by 2:1 majority, observed that a resolution plan under the Insolvency and Bankruptcy Code, containing a proposed combination(a merger or amalgamation of entities), should only be placed before the Committee of Creditors (CoC), after it has been approved by the Competition Commission of India (CCI).In this regard, the Court referred to Section 31(4) proviso of the IBC. This proviso talks about the approval of the resolution plan and its proviso reads as:“Provided...
Supreme Court Dismisses Builder's Plea To Confine Insolvency Process To Single Real Estate Project
The Supreme Court recently dismissed an appeal seeking to confine Corporate Insolvency Resolution Process (CIRP) of Spaze Towers Pvt. Ltd. (Corporate Debtor) to a single real estate project of the company located in Gurugram.A bench of Justice Abhay Oka and Justice Augustine George Masih dismissed an appeal against the decision of National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi rejecting an application to confine the CIRP of the corporate debtor to a single...
'IBC A Complete Code' : Supreme Court Disapproves Of High Court Exercising Writ Jurisdiction To Interdict CIRP
Disapproving a High Court's order interdicting a Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), the Supreme Court recently observed that the IBC is a complete code in itself, having sufficient checks and balances, and thus, the exercise of supervisory and judicial review powers by High Courts demands rigorous scrutiny and judicious application.Allowing the appeal of a successful resolution applicant against Karnataka High Court's interdicting of...