IBC Cases Weekly Round-Up : June 6 To June 12, 2022

NCLAT NCLT Has Power To Recall Its Order: NCLAT Case Title: Printland Digital (India) Pvt. Ltd. v Nirmal Trading Company Case No.: Company Appeal (AT) (Insolvency) No. 504 of 2022 The National Company Law Appellate Tribunal (NCLAT) bench comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Alok Srivastva (Technical Member) recently held that the National Company Law Tribunal has the power to recall its order of closing the right to file reply. It was observed that there is a difference between recalling an order and review of an order where an issue is decided on merit by the Tribunal. "No doubt that the Adjudicating Authority has no jurisdiction to review its order after deciding a substantial issue but it has the jurisdiction to recall the order of the kind in dispute i.e., where the right to Reply was closed by an order on the ground that the opportunities granted were not availed." The order was passed on 30.05.2022. NCLAT Terminates The CIRP Of Kanoria Sugar & General Manufacturing Co. Ltd., As Parties Enter Settlement Case Title: Kanoria Sugar and General Manufacturing Co. Ltd. v Punjab National Bank Case No.: Company Appeal (AT) (Ins.) No. 548 of 2022. The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Naresh Salecha (Technical Member), has terminated the Corporate Insolvency Resolution Process ("CIRP") of Kanoria Sugar and General Manufacturing Co. Ltd. ("Appellant"), which was initiated by NCLT vide an order dated 27.04.2022. A settlement was arrived at between the parties and a One Time Settlement (OTS) proposal dated 31.05.2022 was accepted by the Respondent Bank for an amount of Rs. 40 Crores. A joint application bearing I.A. No. 1782 of 2022 was filed by both the parties to bring the settlement on record. The NCLAT permitted the Respondent Bank to withdraw the Section 7 petition in view of settlement and the CIRP was terminated against the Appellant. The order was passed on 03.06.2022. NCLAT Set Asides Insolvency Process Against HCL Case Title: C Vijay Kumar v Sahaj Bharti Travels Case No.: Company Appeal (AT) (Insolvency) No. 58 of 2022 The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising of Justice Ashok Bhushan, Ms. Shreesha Merla and Mr. Naresh Salecha allowed the appeal filed by the suspended director of HCL Technologies (HCL) and set aside the Corporate Insolvency Resolution Process (CIRP) initiated against the HCL. NCLAT held that merely having a remedy under Arbitration and Conciliation Act, 1996 is a not a ground to deny relief under IBC but it has to be considered that IBC proceedings should not be converted into debt recovery proceedings. The Bench observed that HCL is a globally renowned business entity and the Balance Sheet of HCL for the financial year ending on 31.03.2018 reflects a turnover of INR 61,786 Crores and a profit of INR 8,772 Crores. NCLAT ruled that the proceedings under IBC were only initiated by Operational Creditor for virtually establishing its claim of minimum guarantee amount which was never accepted or admitted by HCL and therefore, the present proceedings were initiated as a debt enforcement measure. Accordingly, NCLAT allowed the appeal filed by suspended director of HCL and set aside the insolvency admission order against HCL. NCLAT Limits Supertech's Insolvency Process To One Project Case Title: Ram Kishor Arora v. Union Bank of India Case No.: Company Appeal (AT) (Insolvency) No. 406 of 2022 The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising of Justice Ashok Bhushan and Mr. Naresh Salecha, has modified its stay order on constitution of Committee of Creditors of Supertech Ltd. (Supertech) and limited the Corporate Insolvency Resolution Process of Supertech to one project i.e., Eco Village II. Earlier, the NCLAT vide its order dated 12.04.2022 while granting time to the promoters of Supertech to settle the dispute with the Union Bank of India directed the Interim Resolution Professional not to constitute the COC. The Bench noted that as per the status report filed by IRP, out of the total 49,554 units Supertech has sold 38,603 units which is a substantial number. The NCLAT modified its interim order and directed that project wise resolution to be started to test out the success of such resolution and directed that the construction of other projects shall continue under the supervision of IRP with the assistance of ex management. NCLAT directed the IRP that the COC be constituted only for the Eco Village II project and claims received regarding the Eco Village II project shall be separated and accordingly information memorandum shall be prepared only for Eco Village II. NCLAT also directed that no resolution plan shall be put to vote without the leave of NCLAT. The next date of hearing...

IBC Cases Weekly Round-Up : June 6 To June 12, 2022

Pallavi Mishra

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