Weekly Digest Of IBC Cases: 6th - 12th November 2023

SUPREME COURTSupreme Court Upholds Constitutionality Of IBC Provisions Relating To Personal Guarantors; Says Adjudicatory Role Can't Be Read Into Sec 97Case Title: Surendra B. Jiwrajika and Anr. vs. Omkara Assets Reconstruction Private Limited Case No.: SLP(C) No. 016464/2021 The Supreme Court Bench comprising Chief Justice DY Chandrachud, Justices JB Pardiwala and Justice Manoj Misra, has upheld the constitutionality of the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC) relating to Personal Guarantors' Insolvency Resolution, which were introduced through the amendments made in 2019.The Court held that these provisions (Section 95 to 100 of IBC) cannot be held as unconstitutional for not affording an opportunity of hearing to the personal guarantors before the insolvency petition filed by creditors is admitted against them and the moratorium is automatically applied against them as soon as the insolvency petition is filed."The statute (IBC) does not suffer from any manifest arbitrariness to violate Art 14 of the Constitution," The bench further held that it cannot read an adjudicatory role into these provisions and that the entire process of timelines would be rendered negatory if the role of adjudicator is changed. For the Court to change the adjudicatory role envisaged under these provisions would amount to "rewriting the legislative functions", the Court said.NCLATNCLAT Delhi: An Operational Creditor Who Is A Participant In Meetings Of CoC Has No Right To Seek A Copy Of Information MemorandumCase Title: Vinay Kumar Singhal RP for PG Advertising Pvt. Ltd. Vs. Mahesh BajajCase No.: Comp. App. (AT) (Ins) No. 645 of 2023 The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) has held that an Operational Creditor who is a participant in meetings of the Committee of Creditors (“CoC”) has no right to seek a copy of the Information Memorandum.It was observed that both IBC and its Regulations are totally silent about the supply of the Information Memorandum to the participant. The legislature, however, has made a provision for providing a copy of the Information Memorandum to the member of the CoC and the Resolution Applicant but not to the participant of the meeting of the CoC. Therefore, a copy of the Information Memorandum need not be given to the Operational Creditor who is merely a participant of the CoC and not a member.NCLAT Delhi: Claims Cannot Be Entertained After Approval Of Resolution Plan By CoC Even If Resolution Plan Is Still Pending For Approval By NCLTCase Title: Suraksha Realty Ltd vs Anuj Bajpai Resolution Professional of Panache Aluminium Extrusion Pvt. Ltd.Case No.: Company Appeal (AT) (Insolvency) No. 1389 of 2023The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson), Mr Barun Mitra and Mr. Arun Baroka (Technical Members) has rejected an appeal and held that claims cannot be entertained after approval of the Resolution Plan by Committee of Creditors (“CoC”) even if the Resolution Plan is still pending for approval of the National Company Law Tribunal (“NCLT”).NCLAT referred to the Supreme Court judgement in M/s. R.P.S. Infrastructure Limited Vs. Mukul Kumar and Anr. where the court has already taken the view that after approval of the plan by the CoC, any claims cannot be entertained.Time Spent In Obtaining Legal Opinion And Engaging Counsel Is Not ‘Sufficient Cause’ For Condonation Of Delay In Filing Of Appeal: NCLAT ChennaiCase title: Anish Lawrence & Anr. v Renahan VamakesanCase No.: Company Appeal (AT) (CH) (Ins) No. 377 of 2023The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that the time spent in obtaining legal opinion and engagement of counsel is not a ‘sufficient cause’ to condone the delay in filing of appeal under proviso to Section 61(2) of IBC.The Bench was adjudicating an application for condonation of delay in filing of appeal wherein the Appellant had filed the appeal on exactly on the 45th day after obtaining certified copy of order. The delay of beyond 30 days in filing of appeal had occurred due to the time was consumed in obtaining legal opinion and engaging a counsel. The Bench dismissed the application.NCLAT Delhi: Benefit Under Section 17 Of Limitation Act Is Not Available When Fraud Was Played In Creditor Company And Not In Company Of Corporate DebtorCase Title: Gyan Chandra Misra RP for Three C Green Developers Pvt. Ltd. Vs. Three C Universal Developers Pvt.Case No.: Company Appeal (AT) (Insolvency) No.1316 of 2023The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member), has that benefit under Section 17 of the...

Weekly Digest Of IBC Cases: 6th - 12th November 2023

Pallavi Mishra

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