Monthly Digest Of IBC Cases: July 2024

Supreme Court IBC | CIRP Of Holding Company Cannot Include Subsidiary's Assets: Supreme Court Case no. – Civil Appeal No. 4565 of 2021 Case Title – BRS Ventures Investments Ltd. v. SREI Infrastructure Finance Ltd. & Anr. The Supreme Court on Monday (July 23) held that a holding company is not the owner of its subsidiary's assets and thus, subsidiary assets cannot be included in the holding company's resolution plan. A bench of Justice Abhay Oka and Justice Pankaj Mithal dismissed an appeal filed by a Successful Resolution Applicant of a Corporate Guarantor against NCLT's decision to admit Financial Creditor's application for recovery of balance amount from the Corporate Debtor. The Corporate Debtor in this case was a subsidiary of the Corporate Guarantor. “A holding company and its subsidiary are always distinct legal entities. The holding company would own shares of the subsidiary company. That does not make the holding company the owner of the subsidiary's assets...Therefore, the assets of the subsidiary company of the corporate debtor cannot be part of the resolution plan of the corporate debtor”, the court held. Insolvency Resolution Of Corporate Guarantor Won't Bar Creditor From Filing CIRP Against Corporate Debtor For Balance Debt : Supreme Court Case Title: BRS Ventures Investments Ltd. Versus SREI Infrastructure Finance Ltd. & Anr. Citation : 2024 LiveLaw (SC) 508 In a notable decision relating to the Insolvency & Bankruptcy Code of 2016, the Supreme Court held when that the insolvency resolution of a corporate guarantor will not prevent the creditor from initiating another insolvency process against the corporate debtor for the balance debt. The Court clarified that the insolvency resolution of the corporate guarantor will not result in the discharge of the corporate debtor towards the remaining debt. High Court Mere Initiation Of Arbitration Proceedings Doesn't Bar Corporate Debtor From Pursing Remedies Under IBC: Delhi High Court Allows Section 11(6) Petition Case Title: Pitambar Solvex Pvt Ltd And Anr. vs. Manju Sharma And Ors. Case No.: ARB.P. 212/2024, I.A. 9821/2024 The Delhi High Court bench of Justice Neena Bansal Krishna held that mere initiation of the arbitration proceedings does not bar the corporate debtor from pursuing his other remedies including those under the Insolvency Bankruptcy Code. NCLAT NCLAT Delhi: Lending Institutions Providing Loans To Homebuyers Don't Qualify As Financial Creditors Under IBC Case Title:IIFL Home Finance Ltd. vs. Shiv Nandan Sharma, Resolution Professional Saha Infratech Pvt. Ltd. Case No.: Company Appeal (AT) (Insolvency) No. 856 of 2024 The National Company Law Appellate Tribunal ('NCLAT') Delhi, comprising Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha, and Mr. Indevar Pandey (Technical Members) held that lending institutions providing loans to homebuyers do not qualify as 'Financial Creditors' under Insolvency and Bankruptcy, Code 2016 ('IBC'). NCLAT Delhi: Assured Returns Class Of Creditors Allotted Commercial Space/Unit Constitutes 'Allottee' Under RERA And IBC Case Title: Rita Malhotra & Anr. vs. Orris Infrastructure Pvt. Ltd. Case No.: Company Appeal (AT) (Insolvency) No. 484 of 2024 The National Company Law Appellate Tribunal (“NCLAT”) New Delhi bench comprising Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra, and Mr. Arun Baroka (Technical Members) held that assured returns class of creditors who are allotted commercial space/unit constitutes an 'allottee' under Real Estate (Regulation and Development) Act, 2016 (“RERA”) and Insolvency and Bankruptcy Code, 2016 (“IBC”). Corporate Guarantor Can't Be Absolved From Its Liability Only Due To Non-Invocation Of Guarantee: NCLAT Delhi Case Title: Iskon Infra Engineering Private Limited vs. Central Bank of India Case No.: Company Appeal (AT) (Insolvency) No. 323 of 2024 & I.A. No. 1080 of 2024 The National Company Law Appellate Tribunal ('NCLAT') Delhi bench, comprising Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member) held that a Corporate Guarantor cannot be absolved from its liability only due to non-invocation of guarantee. 'Voluminous Appeal Records, Citations Of Very Little Value': NCLAT Chennai Raps Practising Company Secretary For Unnecessarily Burdening The Tribunal Case Title: A. Vijayan v. Silver Line Retreat Hotels Private Limited Case No.: CA(AT)(CH) No. 30 of 2024 The National Company Law Appellate Tribunal, Chennai Bench comprising of Justice Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) came down heavily on a Practising Company Secretary for filing an Appeal with voluminous records running in several volumes. Resolution Applicant Whose Name Was Not Included In 'Prospective Resolution Applicants' List Cannot Be Substituted At Later Stage:...

Monthly Digest Of IBC Cases: July 2024

Rajesh Kumar

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