Supreme Court Annual Digest 2022 - Insolvency and Bankruptcy Code (IBC) With Parallel Citations

Insolvency andBankruptcy Code, 2016 - Appealchallenging NCLAT order which reversed the order of the NCLT wherein it hadheld that the application under Section 9 of the Insolvency and BankruptcyCode, 2016 was not time-barred - Allowed - The failure of the NCLAT as thefirst appellate authority to look into a very vital aspect such as this,vitiates its order, especially when NCLT has recorded a specific finding offact - Remanded. S.V. Fashions Pvt. Ltd. v. Ritu Murli Manohar Goyal, 2022 LiveLaw (SC) 326 : 2022 (5) SCALE 442Insolvency and Bankruptcy Code,2016 – Difference between financial and operational creditors in thenature of their role in the Committee of Creditors - It is assumed theoperational creditors will be unwilling to take the risk of restructuring theirdebts in order to make the corporate debtor a going concern. Thus, their debtis not seen as a long -term investment in the going concern status of thecorporate debtor, which would incentivize them to restructure it, but merely asa one -off transaction with the corporate debtor for certain goods or services.(Para 32) Consolidated Construction Consortium Ltd. v. Hitro Energy SolutionsPvt. Ltd., 2022LiveLaw (SC) 129 : (2022) 7SCC 164Insolvencyand Bankruptcy Code, 2016 - IBC does notexclude the application of Section 14 or 18 or any other provision of theLimitation Act. (Para 81) AssetReconstruction Company (India) Ltd. v. Tulip Star Hotels Ltd., 2022 LiveLaw (SC) 648 : AIR 2022 SC 3559Insolvency and Bankruptcy Code,2016 – IBC proceedings should not become recovery proceedings - IBCnot akin to a recovery legislation for creditors, but is a legislationbeneficial for the corporate debtor. Consolidated Construction Consortium Ltd. v.Hitro Energy Solutions Pvt. Ltd., 2022LiveLaw (SC) 129 : (2022) 7SCC 164Insolvencyand Bankruptcy Code, 2016 - If theResolution Plan ignores the statutory demands payable to any State Governmentor a legal authority, altogether, the Adjudicating Authority is bound to rejectthe Resolution Plan - If a company is unable to pay its debts, which shouldinclude its statutory dues to the Government and/or other authorities and thereis no plan which contemplates dissipation of those debts in a phased manner,uniform proportional reduction, the company would necessarily have to beliquidated and its assets sold and distributed in the manner stipulated inSection 53 of the IBC - The Committee of Creditors, which might includefinancial institutions and other financial creditors, cannot secure their owndues at the cost of statutory dues owed to any Government or GovernmentalAuthority or for that matter, any other dues. (Para 52-54) State Tax Officer v. Rainbow Papers Ltd., 2022 LiveLaw (SC) 743 : AIR 2022 SC 4141Insolvencyand Bankruptcy Code, 2016 - Intended to consolidate and amend the lawswith a view to reorganize Corporate Debtors and resolve insolvency in a timebound manner for maximization of the value of the assets of the CorporateDebtor - The statute deals with and/or tackles insolvency and bankruptcy. It iscertainly not the object of the IBC to penalize solvent companies, temporarilydefaulting in repayment of its financial debts, by initiation of CIRP. (Para 80 - 81) Vidarbha Industries Power Ltd. v. Axis Bank Ltd., 2022 LiveLaw (SC) 587 : (2022) 8 SCC 352Insolvencyand Bankruptcy Code, 2016 - NCLT admitted anapplication for initiating CIRP filed by operational creditor - NCLAT set itaside - Supreme Court dismissed and held: NCLT committed a grave error of lawby admitting the application of the Operational Creditor, even though there wasa pre-existing dispute as noted by it. SSEngineers v. Hindustan Petroleum Corporation Ltd; 2022 LiveLaw (SC) 617Insolvencyand Bankruptcy Code, 2016 - NCLT/NCLAT must make a reasonableassessment of the fees and expenses payable to the Interim ResolutionProfession 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 254Insolvencyand Bankruptcy Code, 2016 - NOIDA is an operational creditor under theprovisions of the IBC Code. New Okhla Industrial Development Authorityv. Anand Sonbhadra, 2022 LiveLaw (SC) 491 : 2022 (7)SCALE 656Insolvency andBankruptcy Code 2016 - Supreme Court holds that there is noground to review the the judgment in Vidarbha Industries Power Ltd. v. AxisBank Limited, 2022 LiveLaw (SC) 587 whichheld that the National Company Law Tribunal has discretion to not admit theinsolvency application filed by a financial creditor even if the corporatedebtor is in default. Axis Bank Ltd v. Vidarbha Industries Power Ltd; 2022 LiveLaw (SC) 817Insolvencyand Bankruptcy Code, 2016 - The provisions of Section 18 of the LimitationAct 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 alegitimate basis for determining as to whether the period of limitation wouldstand extended, so long as the acknowledgement was within a period of...

Supreme Court Annual Digest 2022 - Insolvency and Bankruptcy Code (IBC) With Parallel Citations

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