Supreme Court Half Yearly Digest 2022 (Jan - Jun) Insolvency and Bankruptcy Code, 2016

Companies Act, 1956 - Insolvency and Bankruptcy Code, 2016 - Appeal against NCLAT order which dismissed appeals against NCLT order denying relief to appellant workmen/employees with regard to their claim relating to salary, which they claimed for the period involving CIRP- Partly allowed - (i) That the wages/salaries of the workmen/employees of the Corporate Debtor for the period during CIRP can be included in the CIRP costs provided it is established and proved that the Interim Resolution Professional/Resolution Professional managed the operations of the corporate debtor as a going concern during the CIRP and that the concerned workmen/employees of the corporate debtor actually worked during the CIRP and in such an eventuality, the wages/salaries of those workmen/employees who actually worked during the CIRP period when the resolution professional managed the operations of the corporate debtor as a going concern, shall be paid treating it and/or considering it as part of CIRP costs and the same shall be payable in full first as per Section 53(1)(a) of the IB Code; (ii) considering Section 36(4) of the IB code and when the provident fund, gratuity fund and pension fund are kept out of the liquidation estate assets, the share of the workmen dues shall be kept outside the liquidation process and the concerned workmen/employees shall have to be paid the same out of such provident fund, gratuity fund and pension fund, if any, available and the Liquidator shall not have any claim over such funds. Sunil Kumar Jain v. Sundaresh Bhatt, 2022 LiveLaw (SC) 382 : AIR 2022 SC 1985 Companies Act, 1956 - Insolvency and Bankruptcy Code, 2016 - Legislative History with respect to workmen/employee's dues towards the wages/salaries including the amount due and payable towards provident fund, gratuity and pension fund - discussed. (Para 8.2) Sunil Kumar Jain v. Sundaresh Bhatt, 2022 LiveLaw (SC) 382 : AIR 2022 SC 1985 Insolvency and Bankruptcy Code, 2016 - Appeal challenging NCLAT order which reversed the order of the NCLT wherein it had held that the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was not time-barred - Allowed - The failure of the NCLAT as the first appellate authority to look into a very vital aspect such as this, vitiates its order, especially when NCLT has recorded a specific finding of fact - Remanded. S.V. Fashions Pvt. Ltd. v. Ritu Murli Manohar Goyal, 2022 LiveLaw (SC) 326 : 2022 (5) SCALE 442 Insolvency and Bankruptcy Code, 2016 – Difference between financial and operational creditors in the nature of their role in the Committee of Creditors - It is assumed the operational creditors will be unwilling to take the risk of restructuring their debts in order to make the corporate debtor a going concern. Thus, their debt is not seen as a long -term investment in the going concern status of the corporate debtor, which would incentivize them to restructure it, but merely as a one -off transaction with the corporate debtor for certain goods or services. (Para 32) Consolidated Construction Consortium Ltd. v. Hitro Energy Solutions Pvt. Ltd., 2022 LiveLaw (SC) 129 : 2022 (3) SCALE 155 Insolvency and Bankruptcy Code, 2016 – IBC proceedings should not become recovery proceedings - IBC not akin to a recovery legislation for creditors, but is a legislation beneficial for the corporate debtor. Consolidated Construction Consortium Ltd. v. Hitro Energy Solutions Pvt. Ltd., 2022 LiveLaw (SC) 129 : 2022 (3) SCALE 155 Insolvency and Bankruptcy Code, 2016 - Limitation Act, 1963; Section 18 - The provisions of Section 18 of the Limitation Act are not alien to and are applicable to proceedings under the IBC; and (ii) An acknowledgement in a balance sheet without a qualification can furnish a legitimate basis for determining as to whether the period of limitation would stand extended, so long as the acknowledgement was within a period of three years from the original date of default. (Para 13) State Bank of India v. Krishidhan Seeds, 2022 LiveLaw (SC) 497 : 2022 (8) SCALE 253 Insolvency and Bankruptcy Code, 2016 - NCLT/NCLAT must make a reasonable assessment of the fees and expenses payable to the Interim Resolution Profession and cannot pass an order in an ad-hoc manner. (Para 16) Devarajan Raman v. Bank of India Ltd., 2022 LiveLaw (SC) 24 : (2022) 3 SCC 254 Insolvency and Bankruptcy Code, 2016 - NOIDA is an operational creditor under the provisions of the IBC Code. New Okhla Industrial Development Authority v. Anand Sonbhadra, 2022 LiveLaw (SC) 491 : 2022 (7) SCALE 656 Insolvency and Bankruptcy Code, 2016 - The Court allowed withdrawal of Corporate Insolvency Resolution Process against a builder in an application filed by three homebuyers in view of a settlement plan agreed upon by the majority of them. In the larger interest of the homebuyers, the Apex Court exercised power under Article 142 to permit...

Supreme Court Half Yearly Digest 2022 (Jan - Jun) Insolvency and Bankruptcy Code, 2016

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