Monthly Digest Of IBC Cases: October 2022

Supreme CourtDiscretion Of NCLT Under Section 7(5) IBC - Observations In 'Vidarbha Industries' Made In Context Of Case: Supreme Court Refuses ReviewCase Title : Axis Bank Ltd versus Vidarbha Industries Power Ltd Case No.: 2022 LiveLaw (SC) 817, RP (Civil) 1043/2022 The Supreme Court Bench comprising of Justices Indira Banerjee and JK Maheshwari held that there is no ground to review the judgment in Vidarbha Industries Power Ltd. vs Axis Bank Limited which held that the National Company Law Tribunal has discretion to not admit the insolvency application filed by a financial creditor even if the corporate debtor is in default. Disposing of the review petition filed by Axis Bank, the Court stated that the observations in the judgment were made in the context of the facts of the case. The Court refused to accept the argument of Solicitor General of India that certain observations made in the judgment could be interpreted in a manner that might be contrary to the aims and objects of the IBC and render the law infructuous."The apprehension appears to be misconceived", the Bench observed in the review. Standard Of Pre-Existing Dispute Under IBC Is Not Equivalent To Principle Of 'Preponderance Of Probability': Supreme Court Case Title: Rajratan Babulal Agarwal v Solartex India Pvt. Ltd. & Ors. Case No.: Civil Appeal No. 2199 of 2021 The Supreme Court Bench, comprising of Justice K.M. Joseph and Justice Hrishikesh Roy, has held that the standard with reference to which a case of a pre-existing dispute under the IBC must be employed, cannot be equated with the principle of preponderance of probability, which guides a civil court at the stage of finally decreeing a suit. NCLAT Withdrawal Of Resolution Plan Will Have Disastrous Effect: NCLAT Case Title: Shardha Buildcon Pvt. Ltd v. The Dhar Textile Mills Ltd. Case No.: Company Appeal (AT) (Ins) No. 1128 of 2022 The National Company Law Appellate Tribunal (NCLAT) bench, comprising of Justice Ashok Bhushan and Mr. Barun Mitra dismissed the appeal filed by the Resolution Applicant seeking permission to withdraw its resolution plan and held that allowing withdrawal of a resolution plan will have serious disastrous effect on the whole purpose of the IBC. The Appellant filed the appeal before the NCLAT against the order passed by NCLT, which relying upon the judgment of Supreme Court in Ebix v. Educomp dismissed the application filed by Appellant seeking withdrawal of the resolution plan. "The IBC is process consists of different steps with a ultimate object of reviving the Corporate Debtor. Permitting Successful Resolution Applicant to withdraw after the Plan has been approved will have serious disastrous effect on whole purpose and object of IBC." Accordingly, NCLAT dismissed the appeal filed by the Appellant and upheld the order of NCLT. NCLAT Delhi Sets Aside Unreasoned Order Passed By AA For Not Satisfying "Requirements Of An Order" Case Title: Gandhar Oil Refinery (India) Ltd. v City Oil Pvt. Ltd. Case No.: Company Appeal (AT) (Insolvency) No. 915 of 2022 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice M. Satyanarayana Murthy (Judicial Member) and Mr. Barun Mitra (Technical Member), has set aside an order passed by Adjudicating Authority dismissing a petition under Section 9 of IBC, for not being a reasoned order and thus not satisfying the requirements of an order. It was observed that though no specific form is prescribed under IBC for contents of order or Judgment, but general rules relating to contents shall be followed by Adjudicating Authority. If Electricity Supply Is Essential To Preserve Corporate Debtor's Value, Dues Must Be Paid During CIRP: NCLAT Delhi Case Title: Shailesh Verma v Maharashtra State Electricity Distribution, Case No.: Company Appeal (AT) (Insolvency) No. 383 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 held that if electricity supply service is critical to preserve the value of Corporate Debtor, then the dues towards such supply must be paid by the Resolution Professional during CIRP. It was observed that when Corporate Debtor opines that supply of electricity is essential and is to be continued by the supplier, then it must pay the electricity dues of the CIRP period. PF Dept. Attachment Of CD's Bank Account Before CIRP, Can't Continue During Moratorium: NCLAT Chennai Case Title: Mr. B. Parameshwara Udpa v Assistant PF Commissioner & Anr. Case No.: Company Appeal (AT) (CH) (Ins) No. 231 of 2021 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 an order issued...

Monthly Digest Of IBC Cases: October 2022

Pallavi Mishra

Tags