IBC Cases Weekly Round-Up: 7 November To 13 November, 2022

Supreme Court Can Provisional Attachment Under PMLA Be Passed After Initiation Of CIRP Under IBC? Supreme Court To Consider Case Title: Ashok Kumar Sarawagi v Enforcement Directorate & Anr. Case no.: Special Leave Petition (Civil) Diary No(S). 30092/2022 The Supreme Court Bench comprising of Chief Justice U.U. Lalit and Justice Bela M. Trivedi, has issued notice in a petition where it is to be decided whether an order of provisional attachment passed under Prevention of Money Laundering Act, 2002 ("PMLA") would prevail over Insolvency and Bankruptcy Code, 2016 ("IBC") or not, if the said order has been passed subsequent to initiation of Corporate Insolvency Resolution Process ("CIRP"). The Supreme Court has issued notice on the Special Leave Petition and has directed the Parties to maintain status quo with respect to the proceedings in question. The question before the Bench is whether a provisional attachment order passed under PMLA subsequent to initiation of CIRP would prevail over IBC or not. NCLAT Default During Section 10A Period Cannot Be Clubbed To Meet Threshold Requirement Under Insolvency And Bankruptcy Code, 2016: NCLAT New Delhi Case Title: Plus Corporate Ventures Pvt. Ltd v. Transnational Growth Fund Ltd. Case No.: Company Appeal (AT) (Insolvency) No. 1270 of 2022 The National Company Law Appellate Tribunal (NCLAT) bench comprising of Justice Ashok Bhushan and Mr. Barun Mitra, while deciding an appeal filed by the Operational Creditor against the order dated 17.08.2022 passed by NCLT, New Delhi held that amount of default occurred during the Section 10A period (24.03.2020-23.03.2021) of the Insolvency & Bankruptcy Code, 2016 (IBC/Code) cannot be clubbed by the Operational Creditor to meet the threshold requirement of One Crore under Section 4 of the Code. NCLAT also noted that there are two events of default which are outside the Section 10A period but their amount is less than one crore and thus, the application under Section 9 will not be maintainable and accordingly, dismissed the appeal filed by the Appellant. Provident Fund Dues Are Not Assets Of Corporate Debtor, They Have To Be Paid In Full: NCLAT Delhi Case Title: Assam Tea Employees Provident Fund Organization v Mr. Madhur Agarwal & Anr. Case No.: Company Appeal (AT) (Insolvency) No. 262 of 2022 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that provident fund dues are not the assets of the Corporate Debtor and they have to be paid in full. The Bench placed reliance on its recent judgment in Regional P.F. Commissioner v Ashish Chhawchharia, Resolution Professional for Jet Airways (India) Ltd. & Anr., Company Appeal (AT) Ins. No. 987 of 2022, wherein it has been held that provident fund dues have to be paid in full. It was observed that the Resolution Professional's contention that Appellant is an Operational Creditor and both Operational Creditor and Financial Creditor have taken haircut is not acceptable. AA Cannot Enquire Into Justness Of Rejection Of Resolution Plan By COC: NCLAT Chennai Case Title: Dr. C. Bharath Chandran v Ms. Sabine Hospital and Research Centre & Ors. Case No.: Company Appeal (AT) (CH) (Ins) No. 320 of 2022 The National Company Law Appellate Tribunal ("NCLAT"), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Mr. Naresh Salecha (Technical Member), has held that the Adjudicating Authority has no authority to enquire into the 'justness' of Committee of Creditor's decision to reject a Resolution Plan. When a rejected plan is placed before the Adjudicating Authority, then it is expected to do nothing more but to initiate Liquidation process under Section 33(1) of IBC. Coc Initiates Liquidation, Appeal Against Initiation Of CIRP Becomes Infructuous: NCLAT Delhi Case Title: Mr. Rakshit Dhirajlal Doshi v IDBI Bank Limited Case No.: Company Appeal (AT) (Insolvency) No. 296 of 2022 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Anant Bijay Singh (Judicial Member) and Mr. Barun Mitra (Technical Member), has held that an appeal challenging the order initiating CIRP becomes infructuous if the Committee of Creditors decided to liquidate the Corporate Debtor and accordingly an application for liquidation is filed. "After hearing the parties and going through the pleadings made on behalf of the parties, we agree with the reasons given by the Adjudicating Authority while passing the impugned order and as the CoC has recommended for liquidation of the Company for which I.A. is pending before the Adjudicating Authority, hence this Appeal has become infructuous." NCLT Union Govt. Appoints Judicial & Technical Members For NCLT Circular No. 18/25/2022-EO(SM-II) The Government of India vide its...

IBC Cases Weekly Round-Up: 7 November To 13 November, 2022

Pallavi Mishra

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