Monthly Digest Of IBC Cases: February 2024

Supreme Court IBC | Resolution Plan Requires Closer Examination If Plan Envisages Use Of Asset Owned By Statutory Authority: Supreme Court Case Title: Greater Noida Industrial Development Authority Versus Prabhjit Singh Soni & Anr. Case No.: CIVIL APPEAL NOS.7590-7591 OF 2023 The Supreme Court bench comprising Chief Justice of India Dr. DY Chandrachud, Justice J.B. Pardiwala, and Justice Manoj Misra, has observed that ordinarily feasibility and viability of a resolution plan is best decided by the commercial wisdom of the Committee of Creditors (“CoC”), however, when the resolution plan envisages the use of asset/land not owned by the Corporate Debtor but by a third party, which is a statutory body, bound by its own rules and regulations having statutory flavor, then there has to be a closer examination of the plan's feasibility. IBC | Claim Submitted With Proof Cannot Be Overlooked Merely Because It Was Submitted In Wrong Form: Supreme Court Case Title: Greater Noida Industrial Development Authority Versus Prabhjit Singh Soni & Anr. Case No.: Civil Appeal No(s).7590-7591/2023 The Supreme Court bench comprising Chief Justice of India Dr. DY Chandrachud and Justice JB Pardiwala and Justice Manoj Misra, has observed that the claim submitted by the Resolution Applicant (“RA”) under the Corporate Insolvency Resolution Process (“CIRP”) cannot be rejected/overlooked merely on the fact that the claim submitted appears to be in a different form other than the form in which the claim needs to be submitted. The creditor submitted a claim to the Resolution Professional under Form C of Regulation 8 of CIRP Regulations 2016, as a financial creditor. The claim of the resolution applicant was rejected by the Committee of Creditors (“CoC”), National Company Law Tribunal (“NCLT”), and National Company Law Appellate Tribunal (“NCLAT”) on the note that the resolution applicant being Operational Creditor needs to submit their claim under Form B of Regulation 7 of CIRP Regulations 2016, as Operational Creditor.- The Bench held, No doubt, the record indicates that the appellant was advised to submit its claim in Form B (meant for operational creditor) in place of Form C (meant of financial creditor). But, assuming the appellant did not heed the advice, once the claim was submitted with proof, it could not have been overlooked merely because it was in a different Form.” NCLAT NCLAT Delhi Upholds Dismissal Of Plea To Initiate Proceedings Under Section 340 Of CrPC Against Allottees For Allegedly Filing False Affidavits Case title: M/s Mist Direct Sales Pvt. Ltd. v Mr. Nitin Batra & Ors. Case No.: Company Appeal (AT) (Insolvency) No. 96 of 2024 The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has upheld the rejection of an application seeking initiation of proceedings under Section 340 r/w Section 195 of the Criminal Procedure Code, 1973 (“CrPC”) against Allottees, for allegedly filing false affidavits before NCLT in Section 7 of IBC proceedings. Proceedings under Section 340 of CrPC can be initiated when a person intentionally gives a false statement or fabricated false evidence at any stage of the judicial proceedings. The Appellant alleged that the Section 7 petition was not filed by 100 'valid' allottees as required under Section 7(1) of IBC and the affidavits filed by Allottees were false and fabricated. The NCLT held that it cannot decide on the issue of forged affidavits and declined to initiate proceedings under Section 340 of CrPC. NCLAT Delhi: Adjudicating Authority Should Grant Extension Of Time To Consider Resolution Plan Crucial To Fulfill Object Of IBC Case Title: Nimai Gautam Shah, Resolution Professional of Sintex Plastics Technology Ltd. vs. RBL Bank Ltd. Case No.: Company Appeal (AT) (Insolvency) No.82 of 2024 The National Company Law Appellate Tribunal ('NCLAT') New Delhi, comprising Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member) held that the Adjudicating Authority ought to have granted an exclusion/extension of time when the Resolution Plan received in the process was required to be considered to fulfill the object of the IBC. Section 9 Petition Not Served Upon Corporate Debtor, NCLAT Delhi Sets Aside NCLT Order Initiating CIRP Case title: Satish Kumar Sethi v Varsha & Anr. Case No.: Company Appeal (AT) (Insolvency) No. 217 of 2024 The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has set aside an NCLT order whereby a petition under Section 9 of IBC was admitted and CIRP was initiated without serving a...

Monthly Digest Of IBC Cases: February 2024

Pallavi Mishra

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