IBC Monthly Digest: December 2024

SUPREME COURT IBC | Financial Creditor Can Submit Claim Even If There Is No Default Of Debt : Supreme Court Case Title : China Development Bank vs Doha Bank OPSC and others Citation : 2024 LiveLaw (SC) 1029 The Supreme Court has observed a default is not necessary for a debt to become a financial debt under the Insolvency and Bankruptcy Code, 2016. A bench comprising Justice Abhay S Oka and Justice Augustine George Masih held that under Section 5(7) of the IBC, any person to whom financial debt is owed becomes a Financial Creditor even if there is no default in payment of debt. "Therefore, for submitting the claim by a Financial Creditor, there is no requirement of actual default," the Court held. HIGH COURT Delisting Regulations Of SEBI Not Applicable To Delisting Of Equity Shares Under Resolution Plan: Bombay High Court Case Title: Harsh Mehta Versus Securities and Exchange Board of India and Ors. Case Number: WRIT PETITION NO. 4844 OF 2024 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. NCLAT Insolvency & Bankruptcy Code Does Not Override Public Body's Statutory Authority To Regulate Its Properties: NCLAT Case Title: Prabhat Jain, Liquidator of Narmada Cereal Pvt. Ltd. vs MP Industrial Development Corporation Limited and Ors. Case No.: Comp. App. (AT) (Ins.) No. 697 of 2023 & I.A. No. 2322 of 2023 The National Company Law Appellate Tribunal, New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Naresh Salecha (Technical Member) and Mr Indevar Pandey (Member) held a liquidator cannot not create sub-leases over public land without adhering to the statutory requirements. It was further held that Section 238 of the Insolvency and Bankruptcy Code, 2016 cannot override a public body's statutory authority to regulate its properties. Application U/S 9 Of IBC Cannot Be Admitted For Invoices Covered By Prohibited Period U/S 10A Of Code: NCLAT Case Title: Decor Paper Mills Ltd. Versus Mahashakti Plasto Pvt. Ltd. Case Number: Company Appeal (AT) (Insolvency) No. 2022 of 2024 & I.A. No. 7591 of 2024 The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has affirmed that application under section 9 of the code cannot be admitted for the invoices covered by prohibited period under section 10A of the code. Pre-CIRP Dues Cannot Be Recovered After Admission Of Corporate Debtor Into Insolvency: NCLAT Case Title: Central Transmission Utility of India Ltd. Versus Mr. Summit Binani and Anr. Case Number: TA (AT) NO. 174/2021 (Company Appeal (AT) (Ins.) No. 1011/2020) The NCLAT Chennai bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) has held that pre-CIRP dues cannot be recovered once the corporate debtor is admitted into insolvency due to moratorium under section 14 of the code. Any amount due to the corporate debtor can be recovered by filing claims before the IRP/RP as the case may be. Resolution Professional Cannot Be Faulted To Revise Plans Multiple Times As Per Instructions Of CoC: NCLAT Case Title: Fintech Restructuring LLP M/s Fairdeal Multifilament Private Limited and Ors. Case Number: Company Appeal (AT) (Insolvency) No. 1823 of 2024 The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Barun Mitra (Technical Member) has held that adverse remarks cannot be passed by the Adjudicating Authority against the RP for performing his duties in accordance with the commercial wisdom of the CoC. In this case, the Resolution Plans were revised multiple times for which the Adjudicating Authority found the RP responsible. Declaration Of Loan Account/ Debt As NPA Can Be Considered As Date Of Default To File Petition U/S 7 Of IBC: NCLAT Case Title: Bikram Bhadur Vs. Union Bank of India & Anr. Case Number: Company Appeal (AT) (Insolvency) No. 1289 of 2024 The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Barun Mitra (Technical Member) has held that upon declaration of the loan account/ debt as NPA that date can be reckoned as the date of default to enable the Financial Creditor to initiate action under Section 7 of the Code. Approval Of Resolution Plan By CoC Cannot Be Interfered With Unless Section 30(2) Of Code Is Breached: NCLAT Case Title: Yogeshkumar Jashwantilal Thakkar and Anr. Versus George Samuel, Resolution Professional of Jason Dekor Private Limited and Anr. Case Number: Company Appeal (AT) (Insolvency) No. 1417 of 2024 The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Barun Mitra (Technical Member) has held that approval...

IBC Monthly Digest: December 2024

Mohd Malik Chauhan

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