IBC Cases Weekly Round-Up: 4 July To 10 July,2022

NCLAT Resolution Professional Is Only Authorized To Operate Accounts Of Corporate Debtor : NCLAT Chennai Case Title: Beauty Etiole Pvt. Ltd. v C. Sanjeevi & Ors. Case No.: Company Appeal (AT) (CH) (Ins.) No. 316/2021 The National Company Law Appellate Tribunal, Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Mr. Kanthi Narahari (Technical Member), has held that the Resolution Professional is only authorized in law to exercise control over Bank Accounts operated by the Corporate Debtor and not otherwise. NCLAT Holds Lease Rental As Operational Debt Under The Insolvency And Bankruptcy Code, 2016 Case Title: Jaipur Trade Expocentre Private Limited versus Metro Jet Airways Private Limited Case No.: Company Appeal (AT) (Insolvency) No. 423 of 2021 The National Company Law Appellate Tribunal comprising of Justice Ashok bhushan, Justice Rakesh Kumar, Justice Rakesh Jain, Mr. Naresh Salecha and Mr. Barun Mitra held that the lease rental qualifies as an operational debt under the provisions of the Insolvency and Bankruptcy Code, 2016. NCLAT noted that the definition of operational debt as mentioned under Section 5(21) of the Code provides that the operational debt means a claim arising out of provision of goods and services but the term "services" is not defined anywhere under the IBC. The Bench referred to the license agreement which provides that the licensee shall pay all govt. taxed including GST and observed that the payment of GST is only provided for goods and service and the license agreement itself provided for payment of GST which clearly indicates that the license is taxed for services. It was also observed that if the agreement was not for services then there was no requirement of payment of GST. NCLAT also held that the term operation is derived from "operate" and "operating cost" is an expense incurred in the conduct of the principal activities of the enterprise and similarly operational debt is also a debt which is incurred in the conduct of the principal activities of the enterprise. NCLAT Upholds Eligibility Of NTPC As A Resolution Applicant For Jhabua Power Ltd.: NCLAT Delhi Case Title: Avantha Holdings Limited v Mr. Abhilash Lal Case No.: Company Appeal (AT) (Insolvency) No. 304 of 2022. The National Company Law Appellate Tribunal ("NCLAT") Principal Bench comprising of Justice Ashok Bhushan (Chairperson), Ms. Shreesha Merla (Technical Member) and Mr. Naresh Salecha (Technical Member), has upheld the eligibility of NTPC Ltd. under Section 29A of the IBC to submit Resolution Plan for Jhabua Power Ltd. The NCLAT Bench observed that Section 12A does not entitle Promoters of the Corporate Debtor to submit a Settlement Plan as is claimed by the Appellant. The pre-condition of accepting any withdrawal Application under Section 12A is on approval by CoC by 90% of its voting shares. CoC having never granted its approval, Section 12A route was never open for withdrawal of CIRP. The Bench opined that Section 12A proposal cannot be forced upon the lenders. On Recusal From Hearing, Members Can't Transfer Case To Another Bench In Another Place : NCLAT Delhi Case Title: Sonia Khosla & Anr. v Montreaux Resorts (P) Ltd. & Ors. Case No.: Comp. App. (AT) No. 118 of 2021 The National Company Law Appellate Tribunal ("NCLAT") Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Ms. Shreesha Merla (Technical Member) and Dr. Alok Srivastava (Technical Member), has held if Members of NCLT Bench recuse from hearing a case, they cannot transfer the same to another NCLT Bench situated in another city. The matter should be posted before the President/Acting President to be assigned to a different coram. NCLAT Delhi Stays The CIRP Of 'La Residentia Developers' As Parties Enter Settlement Case Title: Amrapali LA-Residentia Flat Buyers Welfare Association (ALRFBWA) v LA Residentia Developers Pvt. Ltd. & Anr. Case No.: Company Appeal (AT) (Insolvency) No. 704 of 2022 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Justice M. Satyanarayana Murthy (Judicial Member) and Mr. Naresh Salecha (Technical Member), has stayed the Corporate Insolvency Resolution Process ("CIRP") of LA Residentia Developers Pvt. Ltd. as parties have entered settlement. The Bench has directed the Interim Resolution Professional to not take any further steps in the CIRP. The order was passed on 07.07.2022. NCLT NCLT Hyderabad Initiates Insolvency Process Against The Personal Guarantor Of Deccan Chronicle Holdings Case Title: L&T Finance Limited v Tikkavarapu Venkaram Reddy Case No.: CP (IB) No. 88/95 of IBC/HDB/2021 The National Company Law Tribunal, Hyderabad Bench, comprising of Dr. N. Venkata Ramakrishna Badarinath (Judicial Member) Shri Veera Brahma Rao Arekapudi (Technical Member), has initiated...

IBC Cases Weekly Round-Up: 4 July To 10 July,2022

Pallavi Mishra

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