Weekly Digest Of IBC Cases: 13 March To 19 March 2023

Supreme Court IBC- Resolution Professional Entitled To Take Control Of Corporate Debtor's Rights In Assets Licensed To Third Parties : Supreme Court Case Title: Victory Iron Works Ltd. v Jitendra Lohia & Anr. Citation : 2023 LiveLaw (SC) 193 The Supreme Court Bench comprising of Justice V. Ramasubramanian and Justice Pankaj Mithal, has held that a resolution professional is entitled to take control of the rights of a corporate debtor in assets which are licensed to third parties. Such an action of the RP will come within the ambit of Section 25 of IBC. Further, the assets owned by a third-party, but in the possession of the Corporate Debtor held under contractual arrangements, are excluded from the definition of “assets” in Section 18 of IBC, however, the said exclusion does not extend to Section 25 of IBC. Therefore, the Explanation to Section 18 is inapplicable to Section 25 of IBC. Insolvency Resolution Of Company Will Not Extinguish Director's Liability Under Section 138 NI Act: Supreme Court Case Title: Ajay Kumar Radheyshyam Goenka v Tourism Finance Corporation of India Ltd. Citation: 2023 LiveLaw (SC) 195 The Supreme Court bench comprising Justices Sanjay Kishan Kaul, Abhay S Oka and JB Pardiwala has held that approval of resolution plan of a corporate debtor under the IBC will not extinguish the criminal liability of its erstwhile director under Section 138 of the Negotiable Instruments Act 1881. The company's director cannot seek discharge from N.I. Act proceedings on the ground that creditor’s debt stood settled in the proceedings under IBC. NCLAT Lease Premium & Lease Rent Not Included In Explanation To Section 14(1)(D) Of IBC: NCLAT Delhi Case Title: Sunil Kumar Agarwal v New Okhla Industrial Development Authority. Case No.: Company Appeal (AT) (Ins.) No. 622 of 2022. The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member), has held that Explanation to Section 14(1)(d) of IBC does not include lease premium or lease rent amount. NCLT Cannot Decide Controversies Relating To Attachment Of Property Under Benami Prohibition Act: NCLAT Chennai Case Title: Mr. P. Eswaramoorthy v The Deputy Commissioner of Income Tax (Benami Prohibition) Case No.: Company Appeal (AT) (CH) (INS) No. 188 of 2022 The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Shri Naresh Salecha (Technical Member), has held that NCLT is not the proper Fora to determine the controversies revolving around the Attachment of Property under the Prohibition of Benami Property Transactions Act, 1988 (“PBPT Act”). The Section 60(5) of IBC does not confer jurisdiction upon NCLT to determine any questions relating to the Corporate Debtor and no remedy can be sought under the same with regards to the PBPT Act. Further, Moratorium imposed under Section 14 of IBC does not affect a Provisional Attachment Order issued under the PBPT Act. NCLT When Financial Creditors Have Not Been Paid In Full, Operational Creditors Cannot Claim A Higher Amount: NCLT Ahmedabad Case Title: Noble Resource International Pvt. Ltd. v Sona Alloys Pvt. Ltd., Case No.: CP (IB) No. 586 of 2019 The National Company Law Tribunal (“NCLT”), Ahmedabad Bench, comprising of Dr. Deepti Mukesh (Judicial Member) and Shri Ajai Das Mehrotra (Technical Member), has held that when Financial Creditors have not been paid in full in the Resolution Plan, the Operational Creditors cannot claim a higher amount under the same. The Bench observed that a conjoint reading of Section 30 and Section 53 of IBC shows that the Financial Creditors are placed at a higher priority than Operational Creditors. The Secured Financial Creditors are covered by Section 53(1)(b)(ii), the Unsecured Financial Creditors are covered by Section 53(1)(d). The Operational Creditors are to be considered thereafter having lower priority and are covered by Section 53(1)(f). Petition U/S 9 IBC Can Only Be Filed After Expiry Of 10 Day Period Under Section 8(2) IBC: NCLT Mumbai Case Title: Aypols Polymers Private Limited Vs Suvarna Fibrotech Pvt Ltd Case No.: CP (IB) No.635/MB-IV/2020 The National Company Law Tribunal (“NCLT”) , Mumbai Bench, comprising of Shri Kishore Vemulapalli (Judicial Member) and Shri Prabhat Kumar (Technical Member), has held that Petition under Section 9 of IBC can only be filed after expiry of the 10 days period mentioned under Section 8 (2) of IBC. The Tribunal observed that the proof of service of Demand Notice was not annexed to the petition and it was unclear how was the Demand Notice served. The Tribunal noted that the Corporate Debtor has 10 days to respond to the Demand Notice under Section 8(2) of IBC. A petition under Section 9 of IBC can only be filed after expiry ...

Weekly Digest Of IBC Cases: 13 March To 19 March 2023

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Pallavi Mishra

Weekly Digest Of IBC Cases: 13 March To 19 March 2023

Pallavi Mishra

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

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Pallavi Mishra

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Available exclusively to
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