Monthly Digest Of IBC Cases: February 2023

NCLAT Nature Of Financial Debt Doesn’t Change Upon Breach Of Consent Terms: NCLAT Delhi Case Title: Priyal Kantilal Patel v IREP Credit Capital Pvt. Ltd. & Anr. Case No.: Company Appeal (AT) (Insolvency) No. 1423 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 the nature of financial debt would not change on account of breach of the consent terms. The Bench has upheld the initiation of CIRP against a Corporate Debtor upon a subsequent Section 7 petition, which was filed after the Corporate Debtor breached the consent terms entered into in the earlier Section 7 petition. “The mere fact that in earlier company petition, consent terms was arrived, which consent terms was breached by the corporate debtor, the financial debt which was claimed by the financial creditor would not be wiped out nor the nature and character of financial debt shall be changed on account of breach of the consent terms. Permitting such interpretation shall be giving premium to the corporate debtor who breach the consent terms.” NCLAT Delhi Sets Aside The Order Of Private Sale Of Bhuvee Stenovate Private Limited Case Title: State Bank Of India V. Bhuvee Stenovate Pvt. Ltd. & Ors. Case No: Comp. App. (AT) (Ins.) No. 1013 of 2022 The National Company Law Appellate Tribunal (NCLAT) Bench has set aside the order of NCLT Kolkata which permitted a private sale of Bhuvee Stenovate Private Limited for an amount of Rs.61.05 Crores, even though the request for Private Sale had been made by the Intervener purchaser Laser Solar LLP. The order and consequent sale was set aside by the NCLAT Bench, while laying down the law relating to sale proceeds during liquidation. It was held as under: · Liquidator has to conduct the Private Sale and give opportunity to others to compete · Liquidator has to seek permission from the Adjudicating Authority to proceed with a Private Sale · Liquidator has to prepare a strategy to approach interested buyers for assets to be sold by a Private Sale. · Adjudicating Authority could not have concluded the sale of the Corporate Debtor without giving an opportunity to the liquidator to take steps for Private Sale. Assets Of Subsidiary Company Cannot Be Dealt With In CIRP Of Holding Company: NCLAT Delhi Case Title: Greater Noida Industrial Development Authority (GNIDA) v Roma Unicon Designex Consortium Case No.: Company Appeal (AT) (Insolvency) No. 180 of 2022 The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Dr. Alok Srivastava (Technical Member) and Mr. Barun Mitra (Technical Member), has held that the assets of the Subsidiary Company cannot be dealt with in the CIRP of Holding Company. A parcel of land was leased by Greater NOIDA Authority to the subsidiary of Corporate Debtor (Holding Company). In the CIRP of Corporate Debtor, the approved Resolution Plan proposed to transfer the subsidiary’s land to the Successful Resolution Applicant, without obtaining Greater NOIDA Authority’s consent. The Bench has set aside the orders approving the resolution plan of the Successful Resolution Applicant. “Misconceived, Not Maintainable”: NCLAT Delhi Dismisses Appeal Filed By IBBI Case Title: Insolvency & Bankruptcy Board of India v GTL Infrastructure & Ors. Case No.: Company Appeal (AT) (Ins) No. 103 of 2023 The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member), has dismissed an appeal filed by the Insolvency and Bankruptcy Board of India (“IBBI”), challenging the dismissal of a Section 7 petition in a matter to which IBBI was not a party. The IBBI filed the appeal while contending that the petition was dismissed upon a wrong interpretation of Section 7 by the Adjudicating Authority. The NCLAT Bench observed that IBBI is not aggrieved by the Adjudicating Authority’s order and has nothing to do with the litigation between the Financial Creditor and Corporate Debtor. Partial Payment Of PF & Gratuity Dues Violative Of Section 30(2)(E) Of IBC: NCLAT Chennai Reiterates Case Title: Mrs. C.G. Vijyalakshmi v Shri Kumar Rajan & Ors. Case No.: Company Appeal (AT) (CH) (Ins.) No. 29 of 2021 The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that Provident Fund and Gratuity dues have to be paid in full to the workmen/employees till the CIRP commencement date. The Bench held that the approved resolution plan violated Section 30(2) of IBC, by paying only 35.13% of the PF and Gratuity dues and thus treating the workmen/employees as Secured...

Monthly Digest Of IBC Cases: February 2023

Pallavi Mishra

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