IBC Quarterly Digest: July To September 2024

Supreme CourtFree Copy Of NCLT Order & Copy Of Order Obtained On Paying Cost Are 'Certified Copies' For Filing NCLAT Appeal : Supreme CourtCase Title: State Bank of India v. India Power Corporation Ltd Citation: 2024 LiveLaw (SC) 766The Supreme Court today (September 27) set aside an order of the National Company Law Appellate Tribunal (NCLAT) which refused to condone delay in filling an appeal because of the filling of a 'free copy' of the impugned order. The bench of CJI DY Chandrachud and Justice Manoj Misra held that there was no difference between a free certified copy of the order and a certified copy which is obtained after paying cost under Rule 50 of the National Company Law Tribunal Rules 2016. Stakeholders Consultation Committee's Advice Not Binding On Liquidator: Supreme CourtCase Title: V.S. Palanivel v. P. Sriram CS Liquidator etc, Civil Appeal Nos. 9059-9061 of 2022 Citation: 2024 LiveLaw (SC) 662The Supreme Court clarified that the advice offered by the Stakeholders Consultation Committee (SCC) constituted in liquidation proceedings is not binding on the Liquidator. IBC| Timeline To Pay Balance Sale Consideration By Auction Purchaser In Liquidation Proceedings Mandatory : Supreme CourtCase Title: V.S. Palanivel v. P. Sriram CS Liquidator etc, Civil Appeal Nos. 9059-9061 of 2022 Citation : 2024 LiveLaw (SC) 662The Supreme Court recently interpreted Rule 12 of Schedule 1 under Regulation 33 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 as mandatory in character. Rule 12 relates to how assets of the Company (Corporate debtor) are to be sold by the Liquidator.IBC | 'Auction-Purchaser Entitled To Benefit Of COVID Limitation Extension': Supreme Court Refuses To Cancel Sale Over Delayed DepositCase Title: V.S. Palanivel v. P. Sriram CS Liquidator etc, Civil Appeal Nos. 9059-9061 of 2022 Citation : 2024 LiveLaw (SC) 662The Supreme Court recently refused to cancel an e-auction despite the Auction Purchaser making a glaring default in making a deposit of the balance sale consideration on grounds that the subject matter of the auction has been utilised and the appellant failed to approach the court on time.A bench of Justices Hima Kohli and Ahsanuddin Amanullah noted: "Much water has flown under the bridge by now. The subject land has been utilized by the Auction Purchaser to build a 200-bed Mother and Child hospital which is operational. Huge amounts have been pumped into the project by the Auction Purchaser. The hospital is fully functional providing medical facilities to seven surrounding districts." In contrast, it noted that the appellant who moved the court in appeal to cancel the auction has not been a vigilant litigation. It observed: "His conduct shows that he has dragged his feet at every stage. Records reveal that belated applications have been filed by him for seeking recall of the orders passed by the Adjudicating Authority granting extension of time to the Auction Purchaser. For reasons best known to him, it took 19 months for the appellant to prefer an appeal before the Tribunal against the order passed by the Adjudicating Authority, as provided for in the IBC. Furthermore, the appellant resisted handing over possession of the subject property to the respondents thereby causing more delay."IBC | CIRP Of Holding Company Cannot Include Subsidiary's Assets: Supreme Case no. – Civil Appeal No. 4565 of 2021Case Title: BRS Ventures Investments Ltd. v. SREI Infrastructure Finance Ltd. & Anr.The Supreme Court on July 23 held that a holding company is not the owner of its subsidiary's assets and thus, subsidiary assets cannot be included in the holding company's resolution plan.A bench of Justice Abhay Oka and Justice Pankaj Mithal dismissed an appeal ﬁled by a Successful Resolution Applicant of a Corporate Guarantor against NCLT's decision to admit Financial Creditor's application for recovery of balance amount from the Corporate Debtor. The Corporate Debtor in this case was a subsidiary of the Corporate Guarantor. “A holding company and its subsidiary are always distinct legal entities. The holding company would own shares of the subsidiary company. That does not make the holding company the owner of the subsidiary's assets...Therefore, the assets of the subsidiary company of the corporate debtor cannot be part of the resolution plan of the corporate debtor”, the court held.Insolvency Resolution Of Corporate Guarantor Won't Bar Creditor From Filing CIRP Against Corporate Debtor For Balance Debt : Supreme Court Case Title: BRS Ventures Investments Ltd. Versus SREI Infrastructure Finance Ltd. & Anr.Citation : 2024 LiveLaw (SC) 508In a notable decision relating to the Insolvency & Bankruptcy Code of 2016, the Supreme Court held when that the insolvency resolution of a corporate guarantor will not prevent the creditor from initiating another insolvency process against the corporate debtor for the balance debt.The Court clariﬁed that the insolvency...

IBC Quarterly Digest: July To September 2024

Tazeen Ahmed

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