IBC Cases Weekly Round-Up: 19th To 25th 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 AA Shall Either Approve Or Reject The Resolution Plan, No Power To Modify It: NCLAT Delhi Case Title: Mathuraprasad C Pandey & Ors. v Partiv Parikh & Anr. Case No.: COMPANY APPEAL (AT)(Ins) No.201/2021 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Rakesh Kumar (Judicial Member) and Dr. Ashok Kumar Mishra (Technical Member), has held that when a Resolution Plan is presented before the Adjudicating Authority for approval, it is clear mandate of legislation to either approve or to reject the Resolution Plan. There is no provision under IBC which empowers the Adjudicating Authority for making alteration or modification in the Resolution Plan. NCLT Claim Based On An Uninvoked Bank Guarantee Liable To Be Rejected By RP: NCLT Mumbai Case Title: Mrs. Bhanu Navin Nisar v Vijay Group Realty LLP Case No.: C.P. 4359/I&B/MB/2019 The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Shri H.V. Subba Rao (Judicial Member) and Smt. Anuradha Sanjay Bhatia (Technical Member), has held that a Resolution Professional is legally liable to reject the claim of a creditor arising out of an uninvoked Bank Guarantee. NCLT Delhi Imposes Cost Of Rs. 1 Lakh On Suspended Director Case Title: Indian Bank (Erstwhile Allahabad Bank) v Nimitaya Hotel & Resorts Pvt. Ltd. Case No.: C.P. (IB) 1913 (ND)/2019 The National Company Law Tribunal ("NCLT"), New Delhi Bench, comprising of Shri Bachu Venkat Balaram Das (Judicial Member) and Shri L.N. Gupta (Technical Member), has imposed a cost of Rs. 1 Lakh upon the Suspended Director of Corporate Debtor (Applicant) for instituting multiple proceedings seeking same reliefs and wasting precious judicial time. It was held that, "The Application is barred by the doctrine of Res Sub-Judice. Since, the applications have resulted in multiplicity of proceedings and in wastage of precious judicial time, we discourage such practice. The Application is accordingly dismissed with a cost of Rs. 1,00,000/- (one lakh) only to be deposited by the Applicant herein in the Prime Minister's Relief Fund within 15 days, the receipt of which shall be filed with the NCLT Registry." HIGH COURT Object of S.60(2) IBC Is To Group Together CIRP/ Liquidation Proceedings Before Single Forum: Calcutta High Court Case Title: Alliance Broadband Services Pvt. Ltd. V. Manthan Broadband Services Pvt. Ltd. (In Liquidation), Case No.: CS 54 of 2019, 2022 LiveLaw (Cal) 372 The Calcutta High Court Bench comprising of Justice Krishna Rao while adjudicating a petition has ruled that the object of Section 60(2) of the Insolvency and Bankruptcy Code, 2016 is to group together Corporate Insolvency Resolution process (CIRP) or liquidation proceedings of a corporate debtor and insolvency resolution/ liquidation/ bankruptcy proceedings of the corporate or personal guarantor of the same corporate debtor before a single forum i.e., the National Company Law Tribunal. The Bench reasoned that the provision intended to ensure both of the said proceedings did not proceed before different fora which may lead to multiplicity of proceedings and conflict of interest. Moratorium Under Companies Act, 2013, Parties Cannot Be Referred To Arbitration: Delhi High Court Case Title: DLF Ltd. versus IL&FS Engineering and Construction Company Case No.: 2022 LiveLaw (Del) 1209 The Delhi High Court Bench comprising of Justice V. Kameswar Rao has ruled that the moratorium granted by the National Company Law Appellate Tribunal (NCLAT), staying the institution of suits and proceedings against the Corporate Debtor, after the resolution process is initiated against it under Sections 241 and 242 of the Companies Act, 2013, is akin to an order of moratorium passed under Section 14 of the Insolvency and Bankruptcy Code, 2016...

IBC Cases Weekly Round-Up: 19th To 25th December 2022

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Pallavi Mishra

IBC Cases Weekly Round-Up: 19th To 25th December 2022

Pallavi Mishra

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Pallavi Mishra

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