Weekly Digest Of IBC Cases: 29th January To 4th February 2024

Supreme Court IBC | Moratorium Under S 14 No Bar To Execute Decree Against Directors/Officers Of Corporate Debtor: Supreme Court Case Title: Ansal Crown Heights Flat Buyers Association (Regd.) V M/S. Ansal Crown Infrabuild Pvt. Ltd. & Ors. Citation: 2024 LiveLaw (SC) 63 The Supreme Court has held that the imposition of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) has no effect on the execution of a decree against the Directors or Officers of the Company (Corporate Debtor), which is undergoing Corporate Insolvency Resolution Process (“CIRP”) under IBC. When the Company was admitted into CIRP, the National Consumer Disputes Redressal Commission (“NCDRC”) declined to permit execution of a decree against the Company and also its Directors/Officers. The Bench held that the protection of moratorium under Section 14 of IBC is only available to the Company and not to its Directors or Officers, thus the execution of decree can be done against them even during moratorium. The Bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan, has held, “Therefore, we are of the view that only because there is a moratorium under Section 14 of the IBC against the company, it cannot be said that no proceedings can be initiated against the opposite party Nos. 2 to 9(the respondent Nos. 2 to 9) for execution, provided that they are otherwise liable to abide by and comply with the order, which is passed against the company. The protection of the moratorium will not be available to the directors/officers of the company.” NCLAT Bank Files Claim After 738 Days Of Delay And Post Approval Of Resolution Plan, NCLAT Delhi Upholds Rejection Of Claim Case title: Kotak Mahindra Bank Ltd. v Sandeep Goel RP for Sarvottam Realcon Pvt Ltd. Case No.: Company Appeal (AT) (Insolvency) No. 140 of 2024 The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has upheld the rejection of a claim submitted by Kotak Mahindra Bank Ltd., which was submitted to the Resolution Professional after delay of 738 days and post approval of resolution plan for the Corporate Debtor. NCLAT Delhi: Security Of Refund Of Advance Amount Can't Change Nature Of Transaction Into Financial Debt Case Title: Sainik Industries Pvt. Ltd. vs. Ritesh Raghunath Mahajan, RP, Indian Sugar Manufacturing Company Ltd. Case No.: Company Appeal (AT) (Insolvency) No. 1614 of 2023 The National Company Law Appellate Tribunal ('NCLAT') New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member), has held that the Security of refund of the advance amount cannot change the nature of transaction into financial debt. Resolution Applicant Who Participated In The Process Has Locus To Object The Application For Approval Of Resolution Plan: NCLAT Delhi Case title: PRIO S.A. v Mr. Pravin R. Navandar & Ors. Case No.: Company Appeal (AT) (Insolvency) No.1650 of 2023 The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that a resolution applicant who has participated in the process, has locus to object the application filed by Resolution Professional under Section 30(6) of IBC for approval of resolution plan submitted by another resolution applicant. NCLAT Delhi Upholds Dismissal Of Plea To Initiate Proceedings Under Section 340 Of CrPC Against Allottees For Allegedly Filing False Affidavits Case title: M/s Mist Direct Sales Pvt. Ltd. v Mr. Nitin Batra & Ors. Case No.: Company Appeal (AT) (Insolvency) No. 96 of 2024 The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has upheld the rejection of an application seeking initiation of proceedings under Section 340 r/w Section 195 of the Criminal Procedure Code, 1973 (“CrPC”) against Allottees, for allegedly filing false affidavits before NCLT in Section 7 of IBC proceedings. Proceedings under Section 340 of CrPC can be initiated when a person intentionally gives a false statement or fabricated false evidence at any stage of the judicial proceedings. The Appellant alleged that the Section 7 petition was not filed by 100 'valid' allottees as required under Section 7(1) of IBC and the affidavits filed by Allottees were false and fabricated. The NCLT held that it cannot decide on the issue of forged affidavits and declined to initiate proceedings under Section 340 of CrPC. NCLT NCLT Delhi: Debt Assignment Deed Cannot Be Challenged In CIRP U/s 7 Of ...

Weekly Digest Of IBC Cases: 29th January To 4th February 2024

Pallavi Mishra

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