IBC Cases Weekly Round-Up: 30 May To 5 June, 2022

Supreme Court Recovery Certificate Holder Can Initiate CIRP As Financial Creditor Under IBC: Supreme Court Case Title: Kotak Mahindra Bank Limited v A. Balakrishna & Anr. Case No.: 2022 LiveLaw (SC) 534, Civil Appeal No. 689 of 2021 The Supreme Court bench, comprising of Justices L. Nageswara Rao, B.R. Gavai and A.S. Bopanna, has held that a liability in respect of a claim arising out of a Recovery Certificate under the Recovery of Debts and Bankruptcy Act, 1993 would be a "financial debt" within the meaning of Section 5(8) of the Insolvency and Bankruptcy Code, 2016 (IBC) and a holder of such Recovery Certificate would be a "financial creditor" under Section 5(7) of the IBC. The Bench observed that 'financial debt' as defined under Section 5(8) of the IBC as 'means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes…'. The use of word 'includes' is to enlarge the scope of the statute and hence the list in Section 5(8) is not an exhaustive but inclusive list. NCLAT NCLAT Urges IBBI To Amend CIRP Regulations To Include Claim Which Are Not Filed But Reflecting In Book/Record Of Corporate Debtor Case Title: Employees Provident Fund Organisation v Mr. Subodh Kumar Agarwal & Ors. Case No.: Company Appeal (AT) (Insolvency) No. 116 of 2022 The National Company Law Appellate Tribunal (NCLAT) Principal Bench comprising of Justice Ashok Bhushan, Ms. Shreesha Merla and Mr. Naresh Salecha, has urged the IBBI to consider an amendment to the IBBI (Insolvency Process for Corporate Persons) Regulations in order to include claims in information which though not filed with the Resolution Professional but clearly reflects in the books/records of the Corporate Debtor. The Bench observed that the Regulation framing authority need to consider as to whether the Regulations need any amendment, clarification so as to include in the Information Memorandum any ongoing statutory proceeding which is likely to saddle the Corporate Debtor with financial or other liability. Further, even if the Resolution Professional has details of record, notices, orders indicating that certain amounts have been finalized to the received from the Corporate Debtor but due to want of claims being filed of such statutory authority they do not find any mention in the list of claims or Information Memorandum. Temporary Unavailability Of A Member To Sign The Order Not A Ground For Fresh Hearing, If Order Was Passed With Consent Of Such Member: NCLAT Delhi Case Title: Ashish Chandravandan Patel v Axis Bank Ltd. & Anr. Case No.: Company Appeal (AT) (Insolvency) No. 618 of 2022 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Ms. Shreesha Merla (Technical Member) and Shri. Naresh Salecha (Technical Member), has held that an order passed with the consent of both Members of an NCLT Bench but signed by only one of them due to temporary unavailability of the other Member, does not require the matter to be designated as part-heard and be heard afresh. Rule 152(4) of National Company Law Tribunal Rule, 2016 ("NCLT Rules") is only applicable in cases where a Member is unable to sign the order sheet in view of resignation, retirement or death; and not where a Member is temporary unavailable to sign the Order. The order was passed on 30.05.2022. NCLAT To Hear Appeals On Resolution Plan Of Jet Airways On 5th July, 2022 Case Title: Association of Aggrieved Workmen of Jet Airways (India) Ltd. v Jet Airways (India) Ltd. & Ors. Case No.: Company Appeal (AT) (Insolvency) No. 643 of 2021 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Ms. Shreesha Merla (Technical Member), while hearing a batch of appeals filed against the resolution plan of Jet Airways (India) Ltd. by aggrieved employees and workmen of Jet Airways; Punjab National Bank; TLD MEAI FZE; Jet Aircraft Maintenance Engineers Welfare Association; Bhartiya Kamgar Sena; and Concor Air, has fixed the next date of hearing as 05.07.2022, with a direction that the implementation of the resolution plan shall abide by the outcome of these appeals. Several appeals were filed before the NCLAT challenging the order dated 22.06.2021 of NCLT approving the resolution plan of Jalan Kalrock consortium. The Association of Aggrieved Workmen of Jet Airways (India) Ltd. had also filed an appeal challenging the time period of implementation of the resolution plan; non-consideration of the workmen and employees' dues including statutory dues such as gratuity, provident fund, leave encampment et al. Further, the challenge was also made with respect to the amount of workmen dues mentioned in the resolution plan (Rs. 100 Crores approx.). The order was passed on 30.05.2022. NCLAT Terminates The CIRP Of National Textile Corporation Ltd. As...

IBC Cases Weekly Round-Up: 30 May To 5 June, 2022

Pallavi Mishra

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