Weekly Digest Of IBC Cases: 30 January To 5 February 2023

Supreme Court Jet Airways Insolvency: Supreme Court Affirms NCLAT Order Directing Successful Bidder To Clear PF, Gratuity Dues Of Employees Case Title: Jalan Fritsch Consortium v Regional Provident Fund Commissioner and Anr. Case No.: C.A. No. 407/2023 The Supreme Court Bench comprising of Justice of India DY Chandrachud, Justice PS Narasimha and Justice JB Pardiwala, refused to interfere with the order of the NCLAT which directed the Jalan Fritsch consortium, the successful resolution applicant for Jet Airways Ltd., to clear the gratuity and provident fund dues of the employees. "Anybody who steps in knows that it will be subject to the overriding dues of labour", the CJI observed. Pointing out that the NCLAT has relied on the Supreme Court's order in State Tax Officer (1) vs Rainbow Papers Limited, the CJI said, "we will not interfere". NCLAT Benefit U/S 10A Of IBC Can Only Be Claimed When Default Occurs During Prohibited Period: NCLAT Delhi Case Title: Vishal Agarwal v ICICI Prudential Real Estate AIF-I & Anr. Case No.: Company Appeal (AT) (Insolvency) No. 1016 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 benefit under Section 10A of IBC can only be claimed when there is clear default during the prohibited period. The Bench upheld admission of a Section 7 petition wherein default had occurred prior to 25.03.2020. “Insofar as application being barred by 10A, benefit under Section 10A can be claimed by the application only when there is clear default during the prohibited period. The said benefit cannot be claimed by the Appellant by ignoring the admission of default which was prior to 25.03.2020.” 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. NCLT No Simultaneous CIRP Proceedings Against Same Corporate Debtor: NCLT Ahmedabad Case Title: Vrundavan Residency Pvt. Ltd. v Mars Remedies Pvt Ltd. Case No.: CP (IB) 300/NCLT/AHM/2020 The National Company Law Tribunal (“NCLT”), Ahmedabad Bench, comprising of Dr. Deepti Mukesh (Judicial Member) and Shri Ajai Das Mehrotra (Technical Member), has held that there cannot be simultaneous CIRP proceedings against the same Corporate Debtor. The Bench declined to initiate CIRP against a Corporate Debtor which was already admitted into CIRP, but the Supreme Court had stayed the CIRP proceedings during pendency of an appeal. NCLT Prescribes Dress Code For Members, Lawyers, RP, Authorized Representative & Parties In Person File No.: 25/02/2023-NCLT The National Company Law Tribunal...

Weekly Digest Of IBC Cases: 30 January To 5 February 2023

Pallavi Mishra

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