Weekly Digest Of IBC Cases: 4th To 10th December 2023

NCLAT No Provision In IBC For Upfront Payment To Dissenting Financial Creditors On Resolution: NCLAT Delhi Case Title: Puro Naturals JV v Warana Sahakari Bank & Ors. Case No.: Company Appeal (AT) (Insolvency) Nos.661-663 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 held that there is no provision under IBC which requires the Successful Resolution Applicant to make upfront payment to Financial Creditors who dissented to the resolution plan. The resolution plan proposed to make upfront payment to assenting Financial Creditors within 90 days, whereas the payment to dissenting Financial Creditors was to be made in three years. The dissenting Financial Creditor contended that they should be paid upfront. The Bench held as under: “There is no provision which can be pointed out, which requires Successful Resolution Applicant to make upfront payment to the dissenting Financial Creditors. What is required by law is the payment “in priority over the Financial Creditors who voted in favour of the plan”.” NCLAT Delhi: Period Of Limitation For Filing An Appeal U/S 61 Of IBC Starts From Date Of The Rectification Order; Rectification Order Merges With The Original Order Case Title: Ashok Tiwari vs Tattva & Mittal Lifespaces Private Limited Case No.: Company Appeal (At) (Insolvency) No. 729 Of 2023 The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Anant Bijay Singh (Judicial Member) and Mr Ajai Das Mehrotra (Technical Member), has held that the rectification Order of NCLT merges with the Original Order and the period of Limitation for filing an appeal under Section 61 of IBC starts from the date of the rectification Order. NCLAT Delhi: National Financial Reporting Authority Has Overriding Powers To Penalise CAs For Professional Misconduct Case Title: Mr Harish Kumar T.K vs National Financial Reporting Authority Case No.: COMPANY APPEAL (AT) NO. 87 of 2023 The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member), has upheld the penalty imposed by the National Financial Reporting Authority (“NFRA/Respondent”) on the auditors of Dewan Housing Finance Corporation Ltd (“DHFL”). The ruling confirms that NFRA has the right to issue a penalty retrospectively when there is misconduct. NCLAT clarified that NFRA holds superior and overriding powers over the Institute of Chartered Accountants of India (“ICAI”) in cases related to the professional misconduct of Chartered Accountants. “NFRA has superior and overriding powers in matters relating to professional misconduct of the Chartered Accountants in terms of Section 132 of Companies Act, 2013 … We may conclude NFRA has been consciously and deliberately given superior authority over ICAI on oversight of auditors and in disciplinary matters as stipulated in Section 132 of Companies Act, 2013 After taking into consideration the background for forming NFRA, the judgment of the Apex Court, proven scams, need to restore shaken confidence of public and investors at large and prevent any adverse impact on Indian economy, we hold that NFRA has clear and required retrospective jurisdiction over the alleged offences by delinquent Chartered Accountants for period prior to formation of NFRA or prior to coming into effect relevant portion of Section 132 of Companies Act, 2013,” NCLAT New Delhi: Raising Of Amount Via Share Subscription-Cum-Shareholders Agreement Is A Commercial Borrowing And Constitutes 'Financial Debt' Under IBC Case Title: Sanjay D. Kakade vs. HDFC Ventures Trustee Company Ltd. Case No.: Company Appeal (AT) (Insolvency) No.481 of 2023 The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising of Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that raising of amount through Share Subscription-cum-Shareholders Agreement is a commercial borrowing and constitutes 'Financial Debt' under IBC. NCLT NCLT Kolkata: CIRP Petition U/S 10 Avoiding Income Tax Liability Not Maintainable Under The IBC Case Title: M/s Jayam Vyapaar Private Limited Case No.: Company Petition (IB) No. 72/KB/2023 The National Company Law Tribunal (NCLT), Kolkata Bench, comprising of Smt. Bidisha Banerjee (Judicial Member) and Shri Arvind Devanathan (Technical Member), has held that a petition filed under Section 10 of IBC to initiate Corporate Insolvency Resolution Process (CIRP) for avoiding Income Tax liability is not maintainable. NCLT Kolkata: Explicit Written Agreement Of Loan Compulsory For NBFC To Establish 'Financial Debt' Case Title: Desana Impex Limited vs. Brick and Mortar Reality Pvt. Ltd. Case No.: Company Petition (IB) ...

Weekly Digest Of IBC Cases: 4th To 10th December 2023

Pallavi Mishra

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