IBC Cases Weekly Round Up: 28th August To 3rd September 2023

Supreme Court EPFO Employees Must Comply With IBC Timeline For Filing Claims; Default Officers Must Face Action: Supreme Court Case Title: Employees Provident Fund Organization V. Fanendra Harakchand Munot Citation: 2023 LiveLaw (SC) 734 | CIVIL APPEAL NO. OF 2023 The Supreme Court Bench comprising Justice Sanjiv Khanna and Justice SV Bhatti, has held that the Commissioner and employees of the Employees Provident Fund Organization (EPFO) must ensure that they comply with the timelines under the Insolvency and Bankruptcy Code, 2016. The Apex Court also stated that in case of failure to comply with the timelines, action must be taken against erring employees. "..we are of the view that the Commissioner and employees of the EPFO must take steps to ensure that there is compliance with the timelines provided under the Insolvency and Bankruptcy Code, 2016. Failure may have legal consequences. The employees of the EPFO must be aware of the consequences in order to ensure compliance. In case there is dereliction of duty, action should be taken against erring employees in accordance with law." NCLAT NCLAT Delhi Reverses The Decision Of NCLT, Upholds CoC’s Decision To Accept Relinquishment Of Personal Guarantee On Payment Case Title: SVA Family Welfare Trust & Anr. v Ujaas Energy Ltd. & Ors. Case No.: Company Appeal (AT) (Insolvency) No. 266 of 2023 The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has upheld the decision of Committee of Creditors (CoC) to accept a value for relinquishment of personal guarantees of the Corporate Debtor under the Resolution Plan. The Resolution Plan contained a clause whereby the rights under personal guarantees of the Corporate Debtor would stand extinguished and the Financial Creditors would be paid compensation towards release of such personal guarantees. The Plan was approved by the CoC with 78.04%. “The decision of the CoC to accept the value for relinquishment of personal guarantee was a commercial decision of the CoC which cannot be allowed to be impugned at the instance of dissenting Financial Creditor.” NCLT NCLT Delhi Approves Resolution Plan For Net 4 India Limited Case Title: Edelweiss Asset Reconstruction Company Limited v Net4 India Limited Case No.: IB-409/PB/2017 The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Bachu Venkat Balaram Das (Judicial Member) and Shri Rahul Bhatnagar (Technical Member), has approved the Resolution Plan of Open Platforms Pvt. Ltd. for Net4 India Ltd. Net 4 India Ltd. (“Corporate Debtor”) is engaged in the business of Domain name registration, Data Centre & Cloud Hosting Solutions, Enterprise Internet Services, VoIP Solutions, Enterprise Messaging & Hosting Solutions and Network Services Provider. While Approving A Plan, Shall Not Waive Off Statutory Obligations Of The Corporate Debtor: NCLT Mumbai Case Title: Corporation Bank v General Composite Pvt. Ltd. Case No.: CP (IB) No. 703 /MB/C-I/2019 The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Shri H.V. Subba Rao (Judicial Member) and Ms. Anu Jagmohan Singh (Technical Member), has approved a resolution plan and directed that such approval shall not waive off any of the statutory obligations/liabilities of the Corporate Debtor and shall be dealt by the appropriate Authorities in accordance with law. Further, any waiver sought in the resolution plan shall be given subject to the approval of the concerned Authorities, in light of Supreme Court judgment in Ghanshyam Mishra and Sons Private Limited v/s. Edelweiss Asset Reconstruction Company Limited. Liquidator Assigns ‘Not Readily Realizable Assets’ Of Rs. 26 Crores For Rs. 50,000 During Pendency Of Avoidance Applications: NCLT Delhi Invalidates Assignment Case Title: Ritu Tandon v M/s Rain Automotive India Private Limited Case No.: Company Petition No. (IB)-1095(ND)/2019 The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Ashok Kumar Bhardwaj (Judicial Member) and Shri L.N. Gupta (Technical Member), has held that a Resolution Professional or Liquidator cannot assign a debt or Not Readily Realizable Assets (“NRRA”), when the avoidance applications under Sections 43,45, 50 and 66 of IBC are pending adjudication before the NCLT. The NRRAs can only be assigned once the Debt/Demand is determined or crystallized through NCLT’s adjudication. “In the absence of conclusion/ adjudication of Avoidance/PUFE proceedings by the Adjudicating Authority, there will be room for arbitrariness and the Liquidator may end up assigning the NRRAs for an arbitrary or a meagre amount, as has happened in the instant case, where the Liquidator has assigned the debt/ “Not readily realisable assets” (NRRAs) of Corporate Debtor worth Rs....

IBC Cases Weekly Round Up: 28th August To 3rd September 2023

Pallavi Mishra

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