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

Supreme Court IBC - Liquidator Can't Cancel Valid Auction On Mere Expectation Of Fetching Higher Price; No Unfettered Discretion: Supreme Court Case Title: Eva Agro Feeds Private Limited V. Punjab National Bank & Anr., Civil Appeal No(S). 7906/2021 Citation: 2023 LiveLaw (SC) 753 The Supreme Court Bench comprising Justice B V Nagarathna and Justice Ujjal Bhuyan, has held that even though the highest bidder in an auction sale under the Insolvency and Bankruptcy Code, 2016 has no indefeasible right to demand acceptance of his bid, the liquidator, if such a bid is rejected must furnish reasons for the same in the rejection order. The mere expectation of the Liquidator that a higher price may be obtained is not a good ground to cancel an otherwise valid auction. The Court also held that once an auction is complete, the liquidator does not have absolute or unfettered discretion to cancel the auction, unless it is found that fraud or collusion had vitiated it. “..while the highest bidder has no indefeasible right to demand acceptance of his bid, the Liquidator if he does not want to accept the bid of the highest bidder has to apply his mind to the relevant factors. Such application of mind must be visible or manifest in the rejection order itself.” NCLAT While Application For Approval Of Resolution Plan Is Pending Before AA, CoC Can’t Convene Meeting To Consider Other Resolution Plans: NCLAT Delhi Case title: Indian Overseas Bank v M/s. Rathi TMT Saria Pvt. Ltd. & Ors. Case No.: Comp. App. (AT) (Ins) No.1134 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 when a Resolution Plan approved by the CoC is pending consideration before the Adjudicating Authority for approval, the CoC is not permitted to hold any meeting for considering other resolution plans. Proceedings Under Section 13 Of Companies Act, 2013 Can’t Be Questioned In Proceedings Under Section 7 Of IBC: NCLAT Delhi Case title: Ishan Singh v Spaze Towers Pvt. Ltd. Case No.: Company Appeal (AT) (Insolvency) No.226 of 2023 The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that orders passed in the proceedings under Section 13 of the Companies Act, 2013 cannot be questioned in proceedings under Section 7 of IBC. The Bench further ruled that relevancy of a document is to be examined by the Adjudicating Authority after taking the concerned document on record and hearing the contentions of the parties. Shri Arun Baroka Takes Oath As A Technical Member In NCLAT On 01.09.2023, Shri Arun Baroka has taken oath as a Technical Member in the National Company Law Appellate Tribunal (“NCLAT”), Delhi. Mr. Baroka is an IAS officer who recently retired from the post of the Secretary, Department of Chemicals & Petro-chemicals, Government of India. He is an Electrical Engineering graduate from IIT, Delhi and has done MBA (Marketing and Systems) from IIM, Kolkata. On 29.08.2023, the NCLAT had issued a notice intimating regarding the oath taking ceremony of Mr. Baroka, which took place on 01.09.2023 in the Chairperson Court, NCLAT Delhi. NCLAT Chennai: Advances By Property Buyers To Real Estate Developers Are ‘Borrowing’ And Financial Debt Case Title: Venkat Rao Marpina vs. Vemuri Ravi Kumar Case No.: C.P.(IB)/107/7/HDB/2021 The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Shreesha Merla (Technical Member), has held that since homebuyers have been added in the Explanation to Section 5(8)(f) of IBC, thus, the advances given by Property buyers to real estate developer will be considered as ‘borrowing’, and such amounts raised from allottees falls within the scope of Section 5(8)(f) of IBC. NCLT NCLT Delhi Admits Imperia Structures Ltd. Into Insolvency Case Title: Chirag Jain & Ors. v Imperia Structures Ltd Case No.: IB-525/PB/2022 The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Mahendra Khandelwal (Judicial Member) and Shri Rahul Bhatnagar (Technical Member), has initiated Corporate Insolvency Resolution Process (“CIRP”) against Imperia Structures Ltd., which launched a real estate project named “Imperia Byron/Mindspace” in Sector- 62, Gurgaon, Haryana. Mr. Gaurav Katiyar has been appointed as the Interim Resolution Professional (IRP). NCLT Mumbai Initiates Insolvency Process Against Sahara India Medical Institute Ltd., A Sahara Group Company Case Title: Aprn Enterprises Private Limited v Sahara India medical Institute Limited Case No.: CP (IB) No.412/MB-IV/2022 The National Company Law Tribunal (“NCLT”), Mumbai Bench,...

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

Pallavi Mishra

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