Weekly Digest Of IBC Cases: 10th June 2024 To 16th June 2024

HIGH COURTS Madras High Court: Adjudicating Authority Must Exercise Jurisdiction Akin To Revisional Jurisdiction To Assess The Correctness Of COC's Actions Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr. Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022 The Madras High Court bench of Justice N. Seshasayee held that though the Adjudicating Authority may not substitute the commercial wisdom of the Committee of Creditors ('CoC'), however, it must exercise jurisdiction akin to revisional jurisdiction to assess the correctness of the actions taken by the CoC. Madras High Court: MSME Corporate Debtor Can't Misuse Clean Slate Theory To Withhold Information When Its Management Had A Duty To Disclose Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr. Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022 The Madras High Court bench of Justice N. Seshasayee held that an MSME Corporate Debtor cannot exploit the Clean Slate Theory by withholding information, especially when its management, which remained in control, had a duty to disclose such information. Resolution Applicant Not Bound To Pay Past Dues When No Claim Is Made, Even If Electricity Dues Are Statutory In Character: Meghalaya High Court Case Title: M/s Reliance Infratel Limited & Anr. vs. State of Meghalaya & Ors. Case No.: WP(C) No. 238 of 2023 The Meghalaya High Court has held that a State authority cannot compel a successful resolution applicant under Insolvency and Bankruptcy Code, 2016 (I&B Code) to pay past electricity dues, if the State authority has not made any claim in respect of its dues under approved resolution plan. Madras High Court: Clean State Theory Only Protects Third-Party Successful Resolution Applicant And Not Suspended Board Of Corporate Debtor From Future Claims Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr. Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022 The Madras High Court bench of Justice N. Seshasayee held that the Clean State Theory only protects the third party – Successful Resolution Applicant ('SRA') and not the suspended board of the Corporate Debtor from uncertainties of future claims. Madras High Court Urges Parliament To Assess Efficiency Of IBC And Consider Recovery Percentage From Successful Resolution Processes Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr. Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022 The Madras High Court bench of Justice N. Seshasayee urged the Parliament to assess and evaluate the working efficiency of the Insolvency and Bankruptcy Code, 2016 ('IBC') and questioned whether the Parliament has considered the general recovery percentage achieved from a successful corporate debtor resolution process. Madras High Court: Every Claim Of Operational Creditors Includes Right To Their Property Under Article 300A Of The Constitution Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr. Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022 The Madras High Court comprising of Justice N. Seshasayee held that every claim by operational creditors involves a right to their property under Article 300A of the Constitution of India. Madras High Court: The Successful Working Of IBC Rests On Diligence And Integrity Of IRP And RP Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr. Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022 The Madras High Court stressed and defined the role and responsibilities of the Interim Resolution Professional ('IRP') and Resolution Professional ('RP') to act fairly and transparently to secure the interests of all the stakeholders, particularly operational creditors. Determination Of Share Title Is Within Civil Court's Domain, Not With NCLT/NCLAT: Telangana High Court The Telangana High Court bench of Justice Moushumi Bhattacharya and Justice Nagesh Bheemapaka has held that the determination of the title of the shares is within the domain of the Civil Court and not the NCLT/NCLAT. The bench held that Section 430 of the Companies Act comes into play only after the title to the shares is decided. Case Title: Cherukuri Ramakrishna vs Sandhya Hotels Private Limited Case No.: C.C.C.A. No.57 OF 2023 Madras High Court: Clean State Theory Not Applicable To Undisclosed Creditors Left Out Due To Negligences Of IRP Or RP Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr. Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022 The Madras High Court bench of Justice N. Seshasayee held that the Clean State Theory shall not apply to undisclosed creditors to protect them from the deliberate non-disclosure ...

Weekly Digest Of IBC Cases: 10th June 2024 To 16th June 2024

Sachika Vij

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