Weekly Digest Of IBC Cases: 8th To 21st April 2024

SUPREME COURT Process For IBC Offences To Be Issued By Sessions Court Despite Companies Act Amendment Vesting Jurisdiction On Judicial Magistrate: Supreme Court Case Title: Insolvency And Bankruptcy Board Of India Versus Satyanarayan Bankatlal Malu & Ors. Citation: 2024 LiveLaw (SC) 317 The Supreme Court bench comprising Justice BR Gavai and Justice Sandeep Mehta, while observing that the offences committed under the Insolvency and Bankruptcy Code, 2016 (“IBC”) would be tried by the Special Court established under Section 435 of the Companies Act, 2013 and the sessions judge would have the power to issue process against the accused, has upheld the issuance of process by the sessions judge to the accused. The Court rejected the contention of the accused that the Sessions Judge wasn't empowered to issue process to the accused for the offences punishable up-to two years under the IBC but the judicial magistrate. Reversing the High Court's decision, the Bench interpreted the scheme of Section 236(1) of IBC to hold that the power to try offences punishable under the IBC was vested in the special court by 'legislation by incorporation', meaning thereby the intention of the Parliament was clear to vest the power to issue summons upon the special court consisting of a person qualified to be a Sessions Judge or an Additional Sessions Judge. Thus, the subsequent amendments to the Section 435 of Companies Act, 2013 authorizing judicial magistrates to issue summons for offences punishable up to two years under the IBC would not have any effect on Section 236 of IBC. NCLAT Under Section 30(2)(b), Operational Creditor Can't Be Paid Through Partly Paid 'Redeemable Preference Shares': NCLAT Delhi Case title: Gupta Textiles v Darshan Patel & Ors. Case No.: Company Appeal (AT) (Insolvency) No. 408 of 2024 The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that amount payable under resolution plan to Operational Creditors in terms of Section 30(2)(b) of IBC, can only be by way of cash and not partly paid Redeemable Preference Shares or equity. NCLAT Chennai Stays Insolvency proceedings Against Charter Aircraft Service Provider 'Deccan Charters' Case title: Sanjay Saihgal v Krone Finstock Private Limited & Anr. Case No.: Company Appeal (AT) (CH) (Ins) No.123/2024 The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member), Justice Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member), has stayed the insolvency proceedings initiated against Deccan Charters Pvt. Ltd. by the NCLT, till the next date of hearing i.e. 26.04.2024. Deccan Charters is a Bengaluru based company which operates chartered helicopters and fixed wing aircrafts and also provides services such as aircraft maintenance, aircraft management and aviation training. 'Free Of Cost' Copy Of Order Sent By NCLT Registry Is Not A 'Certified Copy' For The Purpose Of Filing Appeal: NCLAT Chennai Case title: Munagala Roja Harsha Vardhini v Vardhansmart Private Limited Case No.: Company Appeal (AT) (CH) (Ins) No.23/2024 The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member), Justice Sharad Kumar Sharma (Judicial Member) and Shri Jatindranath Swain (Technical Member), has held that the 'free of cost' certified copy of final order sent by NCLT registry in compliance of NCLT Rules is not a 'certified copy' of the order for the purpose of filing appeal before NCLAT. Rule 22(2) of the NCLAT Rules, 2016 provides that every appeal shall be accompanied by a certified copy of the impugned order. It was observed that the Appellant's obligation to apply for a certified copy of the order to be challenged by paying requisite fees cannot be dispensed with. Delay In Issuance Of Sale Certificate Due To Restraint Order By NCLT, Auction Purchaser Not Entitled To Interest On Sale Consideration: NCLAT Delhi Case title: Gokul Agro Resources Ltd. v Mr. Supriyo Kumar Chaudhuri Case No.: Company Appeal (AT) (Insolvency) No. 1070 of 2023 The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held an Auction Purchaser cannot claim interest on sale consideration from the Liquidator for delayed issuance of Sale Certificate, if the delay has occurred due to a restraint order passed by NCLT. Allottee Obligated To Comply With Threshold Under Section 7(1) Of IBC Even After RERA Passes An Order In Its Favour: NCLAT Delhi Case title: Shri Rahul Gyanchandani & Ors. v Parsvnath Landmark Developers Pvt. Ltd. Case No.: Company Appeal (AT) ...

Weekly Digest Of IBC Cases: 8th To 21st April 2024

Pallavi Mishra

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