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The present appeal raises substantial questions about the legal framework governing the withdrawal of a CIRP; the settlement of claims after the admission of an application instituted by a debtor; and the scope of the inherent powers vested in the NCLAT under Rule 11 of the NCLAT Rules.
A forensic audit was conducted by Grant Thornton LLP at the request of the respondent-bank. The audit led to the withdrawal of the ‘red flagging’ of the company’s account.
by Prakul Thadi* and Sarthika Singhal**
The dues shown payable to the appellant was Rs. 13,47,40,819 while the appellant claimed it to be Rs. 43,40,31,951.
“The principle aims of IBC are to promote investment, and resolution of insolvencies of corporate persons, firms, and individuals in a time bound manner. The IBC consolidated and amended a web of laws which had led to an ineffective and inefficient mechanism for resolution of insolvencies marked with significant delay”
The main contention of the appellants is that the lay-off notice was not issued in accordance with the provisions of the Industrial Disputes Act, 1947.
The NCLAT held that the appellant has no Locus Standi to make claim for any unpaid Fees/Costs from the members of the CoCs, as he is neither the RP in the project nor is connected with another project.
While dismissing the present appeal, the NCLAT held that appellant’s prayer pertaining to admission of the claim cannot be acceded to in the ‘eye of Law’.
NCLAT directed the new Resolution Professional to protect the assets of the Corporate Debtor as required under S. 25(1) of the IBC
There is no need to prove any fraudulent intent for a preferential transaction as per S. 43 of the IBC.
“Any settlement after passing of the impugned order and after constitution of the CoC is only permissible when the same is approved with 90% vote share of CoC.”
Madras High Court said that there is no reason why the complaint was not filed either before IBBI or NCLT for the alleged fraud.
Jharkhand High Court clarified that Section 233 of Insolvency and Bankruptcy Code (‘IBC Code’) gives protection to a resolution professional from criminal prosecution for acts in good faith, and not where he has been apprehended red-handed with the bribe amount.
NCLAT held that that the allocation of meagre amount in Resolution Plan to Creditors can be questioned when the plan value earmarked for them is less than the liquidation value but same is not the case in instant matter.
National Company Law Appellate Tribunal observed that as per S. 61(2) every appeal must be filed within 30 days before the Appellate Tribunal and the Appellate Tribunal has the jurisdiction to extend the period of 15 days if it is satisfied that there is a sufficient cause for not filing the appeal within the prescribed time.
The NCLAT held that even after completion of challenge mechanism under CIRP Regulation 39(1A)(b), the CoC retains its jurisdiction to negotiate with one or other Resolution Applicants, or to annul the Resolution Process and embark on to re-issue RFRP.
NCLAT observed that allowing present appeal holding the Successful Resolution Applicant ineligible would automatically make the resolution plan redundant.
In matter related to reconsideration of Resolution Plan after approval, NCLAT held that thought the object of the CIRP is maximisation of value of the Corporate Debtor, but the said maximisation must be achieved within the timeline provided in the scheme.
In a case related to rejection of Resolution Plan by the Adjudicating Authority, which was once approve the Adjudicating Authority, the Tribunal opined that the Adjudicating Authority was right on non-approval of the Resolution Plan as the Adjudicating Authority’s order was not followed in its true spirit.
The NCLAT granted interim relief to Zee Entertainment Enterprises Ltd (ZEEL) by staying bankruptcy proceedings against them, after the NCLT admitted S. 7 application and directed the initiation of CIRP against the Corporate Debtor/ZEEL.