Weekly Digest Of IBC Cases: 20th To 26th November 2023

Supreme Court IBC | No Casual Interference With Commercial Wisdom Of CoC: Supreme Court Sets Aside NCLT Direction To Reevaluate Corporate Debtor's Assets Case Title: Ramkrishna Forgings Limited v Ravindra Loonkar & Anr. Citation: 2023 LiveLaw (SC) 1007 The Supreme Court bench comprising Justice Vikram Nath and Justice Ahsanuddin Amanullah, has set aside an order whereby the National Company Law Tribunal (“NCLT”) kept the approval of a resolution plan in abeyance while directing an Official Liquidator to conduct re-valuation of the Corporate Debtor’s assets. Consequently, the order of National Company Law Appellate Tribunal (“NCLAT”) affirming the NCLT’s order has also been set aside. An application under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (“IBC”) was filed by the Resolution Professional before NCLT, seeking approval of the resolution plan submitted by Successful Resolution Applicant(SRA). The valuation of Corporate Debtor’s assets was already done Resolution Professional as per the provisions of IBC and its Regulations. However, the NCLT kept the resolution plan in abeyance and appointed an Official Liquidator to conduct re-valuation of assets. The Bench has held, “In the case at hand, we find that there was no occasion before the Adjudicating Authority NCLT to be swayed only on the per se ground that the hair-cut would be about 94.25% and that it was not convinced that the fair value of the assets have been projected in proper manner as the bid of the appellant was very close to the fair value of the assets of ACIL. Ordering revaluation of the assets, by the OL, Ministry of Corporate Affairs, Government of India, in-charge of the particular area, cannot be justified.” NCLAT Corporate Debtor Denying Liability Prior To Issuance Of Demand Notice Is Pre Existing Dispute: NCLAT New Delhi Case title: Panjwani Electrical Engineers and Consultants v Larsen And Toubro Ltd. Case No.: Company Appeal (AT) (Insolvency) No.1399 of 2023 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 when Corporate Debtor denied its liability to pay even prior to issuance of Demand Notice under Section 8 of IBC, then the petition under Section 9 of IBC is liable to be dismissed on the ground of pre-existing dispute. NCLAT Delhi: Doctrine Of Promissory Estoppel Can’t Be Applied Against An Approved Resolution Plan Case Title: Fervent Synergies Limited VS Manish Jaju Case No.: Company Appeal (AT) (Insolvency) No.1338 of 2023 The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr Arun Baroka (Technical Member), has held that the doctrine of promissory estoppel cannot be applied against an approved Resolution Plan by the Committee of Creditors (“CoC”) under IBC. “The mandatory contents of the Resolution Plan are laid down in the CIRP Regulations, 2016. If a Resolution Plan is compliant with the provision of Section 30, sub-section (2) of the IBC and the provisions of the Regulations, 2016, the Plan cannot be faulted on the ground of the promissory estoppel, which the Appellant is pressing against the Resolution Professional, who has admitted the claim.” Section 7 Petition Seeking ‘Joint’ CIRP Of Separate Corporate Entities Involved In Common Real Estate Project Is Maintainable: NCLAT Delhi Case title: Mist Avenue Pvt. Ltd. v Nitin Batra & Ors. and connected matters. Case No.: Company Appeal (AT) (Insolvency) No. 127 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 that a petition under Section 7 of IBC, filed by allottees for joint CIRP of separate corporate entities involved in a common real estate project is maintainable. Three separate companies were engaged in the development of a real estate project. When the construction of units was not completed within time, the Allottees filed a Section 7 petition under IBC, seeking initiation of joint CIRP against all three companies involved. The NCLAT while upholding the maintainability of such Section 7 petition, has observed as under: “All the three Appellants being involved with the one single project in which the allottees have been allotted units, all are necessary ingredients of any resolution which may help the allottees to receive their units, in absence of any of the appellants in Corporate Insolvency Resolution Process, Resolution of project and revival of the Resolution of project is impossible………We are in agreement with the view expressed by the Adjudicating Authority that Section 7 Application filed against all the three appellants ...

Weekly Digest Of IBC Cases: 20th To 26th November 2023

Pallavi Mishra

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