IBC Cases Weekly Round-Up: 25 July To 31 July, 2022

NCLAT Payment Of Earnest Money Towards Purchase Of Land Is Not A Financial Debt: NCLAT Delhi Case Title: S. Chandriah v Sunil Kumar Agarwal & Ors. Case No.: Company Appeal (AT) Insolvency No. 22 of 2022 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Naresh Salecha (Technical Member), has held that payment of Earnest Money towards purchase of land is a financial liability but not a 'financial debt' as per the Insolvency and Bankruptcy Code, 2016 ("IBC"), as it has not been disbursed for consideration of time value of money. For a debt to be financial debt, essential condition is that the debt is disbursed against the consideration for the time value of money. Time value of money means the price received for the length of time for the money for which the money has been disbursed. It was opined that the disbursement made by the Appellant to the Corporate Debtor was only a payment of Earnest Money, to be adjusted in sale of the land and was not a disbursement in consideration for the time value of money. NCLAT Sets Aside The Order Of NCLT Rejecting CIRP Initiation, Finds That The Service On The Respondent Was Effected As Per Master Data Details Case Title: Sparta Global Projects Pvt. Ltd. v KUGD Services Pvt. Ltd. Case No.: Company Appeal (AT) (Insolvency) No. 341 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. Barun Mitra (Technical Member), has directed the Adjudicating Authority to admit a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 ("IBC") which was earlier rejected. The Adjudicating Authority had rejected the petition on the basis of Demand Notice not being delivered to the Corporate Debtor in strict consonance of Rule 5(2) of the Adjudicating Authority Rules. NCLAT Delhi Sets Aside The CIRP Of LAResidentia Developers, As Parties Enter Settlement Case Title: Amrapali LA-Residentia Flat Buyers Welfare Association (ALRFBWA) v LA Residentia Developers Pvt. Ltd. & Ors. 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 set aside the Corporate Insolvency Resolution Process ("CIRP") of LA Residentia Developers Pvt. Ltd. as parties have entered settlement. It was observed that the continuing business relation between the Parties show that the Corporate Debtor is not insolvent. NCLT DHL Supply Chain Files Insolvency Plea Against Eicher Motors: NCLT Delhi To Decide The Issue Of Maintainability Case Title: DHL Supply Chain Pvt. Ltd. v Eicher Motors Ltd. Case No.: IB 272/ND/2022. The National Company Law Tribunal (NCLT), New Delhi Bench, comprising of Dharminder Singh (Judicial Member) and Sumita Purkayastha (Technical Member), while adjudicating an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 ("IBC") in DHL Supply Chain Pvt. Ltd. v Eicher Motors Ltd., has directed DHL to convince the Bench on the maintainability of the application in terms of Section 10A of the IBC. DHL Supply Chain Pvt. Ltd. ("Applicant") is an Indian division of Deutsche Post DHL group and is engaged in the business of logistic operations. Eicher Motors Ltd. ("Respondent") is the listed parent of Royal Enfield motorcycles, which is the world's oldest motorcycle brand, with its flagship product being the 'Royal Enfield Bullet' in India. The matter is next listed on 01.08.2022. NCLT Disallows JSW To Withdraw FromStatus Of Successful Resolution Applicant Of Ind-Barath Energy Case Title: Bank of Baroda v Ind-Barath Energy (Utkal) Ltd. Case No.: CP (IB) NO. 276/7/HDB/2018 The National Company Law Tribunal, Hyderabad Bench, comprising of Bhaskara Pantula Mohan (Judicial Member) and Dr. Binod Kumar Sinha (Technical Member), has held that under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 ("IBC"), Adjudicating Authority is not empowered to terminate or remand back a resolution plan to the Committee of Creditors for re-consideration, an assessment can only be made to see whether the plan incorporates provisions for its smooth implementation or not. The Bench observed that the proviso to Section 31(1) cannot be construed so as to allow the Adjudicating Authority once again to get into the questions of deterioration or revaluation of assets etc. which must be left to the commercial wisdom of the CoC. The Adjudicating Authority would not have any jurisdiction to either terminate the Resolution Plan or even send it to CoC for reconsideration. Further, the resolution plan submitted by JSW Energy Ltd. has been approved...

IBC Cases Weekly Round-Up: 25 July To 31 July, 2022

Pallavi Mishra

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