Monthly Digest Of IBC Cases: December 2022

Supreme Court Provisional Attachment Under PMLA Subsequent To Initiation Of CIRP: Supreme Court To Consider The Issue 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 Justice Sanjay Kishan Kaul and Justice Abhay S. Oka, has permitted the CIRP of Corporate Debtor to be conducted on 'as is where is' and 'whatever there is' basis, during the pendency of a petition challenging the provisional attachment order passed against the Corporate Debtor under PMLA. The Bench has cautioned that the Resolution Plan shall not be approved by the Adjudicating Authority without the permission of the Supreme Court. The issue in the petition concerns 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"). NCLAT Net Worth Of Transferor & Transferee Company Being Highly Positive, Consent Of Secured Creditors Not Required For Amalgamation: NCLAT Delhi Case Title: Lasa Supergenerics Limited v Harishree Aromatics & Chemicals Private Limited Case No.: Company Appeal (AT) No. 82 of 2021 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Anant Bijay Singh (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that in cases where the net worth of the Transferor and Transferee Companies are highly positive, it is not required to seek consent of secured creditor for amalgamation. In place of seeking a No Objection Certificate from Secured Creditor, the Bench has directed the Secured Creditor to file an objection to the Scheme of Amalgamation, if any, within 30 days. Section 96(1)(B) Of IBC Does Not Stay Any Future Liability Or Obligation: NCLAT Delhi Case Title: Ashok Mahindru & Anr. v Vivek Parti Case No.: Company Appeal (AT) (Insolvency) No.1324 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 Section 96(1)(b) of IBC does not stay any future liability or obligation. The Bench declined to stay proceedings under Section 19(2) and Section 66-67 of IBC initiated against the Personal Guarantors in another insolvency petition, in view of interim moratorium imposed under Section 96 of IBC in insolvency proceedings against the Personal Guarantors. NCLAT Approves Sugar Farmers As Separate Creditors Group In The Sugar Industry Resolution Plan Case Title: Excel Engineering & Ors. v Mr. Vivek Murlidhar Dabhade & Anr. Case No.: Comp. App. (AT) (Ins.) No. 85-86 of 2020 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Anant Bijay Singh (Judicial Member) and Ms. Shreesha Merla (Technical Member), has urged the Government and the IBBI to examine some minimum entitlement to Operational Creditors based on the amount realised in the Resolution Plan over and above the liquidation value. Objections Raised By Corporate Debtor To Oppose Section 9 Petition Not To Be A Moonshine Defence: NCLAT Delhi Case Title: Krishna Hi-Tech Infrastructure Pvt. Ltd. v Bengal Shelter Housing Development Ltd. Case No.: Company Appeal (AT) (Insolvency) No.1375 of 2022 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Dr. Alok Srivastava (Judicial Member) and Mr. Barun Mitra (Technical Member), has held that the only question to be looked in Section 9 petition is whether the objection raised by the Corporate Debtor opposing claim of the Operational Creditor is not a moonshine defense. The Bench observed that contracts provide for dispute resolution mechanism for contractual disputes arising between the Parties during the contract period. The dispute between the parties are not supposed to be decided, examined and adjudicated in IBC proceeding. No Fetter, Embargo Or Legal Impediment For A Trust To Be A Resolution Applicant: NCLAT Chennai Case Title: M/s. Aswathi Agencies v Bijoy Prabhakaran Pulipra & Ors. Case No.: Company Appeal (AT) (CH) (Ins.) No. 179 of 2021 The National Company Law Appellate Tribunal ("NCLAT"), Chennai Bench, comprising of Justice M Venugopal (Judicial Member) and Mr. Kanthi Narahari (Technical Member), has held that there is no fetter, embargo or any legal impediment for a Trust to become a Resolution Applicant. "To put it precisely, the word `Person', is defined as per Section 3 (23) (d) of the I & B Code, 2016, which includes a `Trust', therefore, there is no `Fetter' / `Embargo' or a `Legal Impediment', for a `Trust', to be a `Resolution Applicant', in...

Monthly Digest Of IBC Cases: December 2022

Pallavi Mishra

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