COC
Represented by UCO Bank v. Mr. Parag Sheth [Co. Appeal (AT) (Insolvency) No. 1254/2019]
In the said matter, an appeal was
preferred by the committee of creditors (COC) seeking various general
reliefs including preponement of hearing before the adjudicating authority (AA),
expedition in hearing of various applications pending before the AA, replacement
of the insolvency resolution professional (IRP) etc. No specific order
of the AA was under challenge. The NCLAT, while relying on Section 61 (1) of
the Code, observed that the appeal was not maintainable in as much as no
specific order of the AA was challenged in the appeal.
Poonam
Gupta v. Suman Chadha & Lifestyle Fitness Private Limited [Co. Appeal (AT)
(Insolvency) No. 771/2019]
The NCLAT, while citing the
summary nature of proceedings under the Code, refused to entertain the plea of
the corporate debtor (CD) (in a Section 9 matter) that it had paid back
most of the dues of the operational creditor (OC) in cash vide a
handwritten receipt.
Harpreet
Singh Ahluwalia v. Eatigo India Private Limited [Co. Appeal (AT) (Insolvency)
No. 1150/2019]
In the present matter (in a
Section 9 matter), the challenge of the CD was only to the quantum of the
amount owned by it to the OC and not to services rendered by the OC. The NCLAT
reiterated its position that if the amount is disputed, as long as the claim
amount is more than Rs. 1 Lakh, corporate insolvency resolution process (CIRP)
can be initiated against the CD.
Mahendra
Trading Company & Others v. Hindustan Controls and Equipment Private
Limited [Co. Appeal (AT) (Insolvency) No. 97/2019]
In the said matter, the NCLAT
discussed the manner in which the limitation period of 30 (thirty) days (as
prescribed under Section 61 (1) of the Code) is to be reckoned. The NCLAT
observed that the period of limitation begins to run from the date of receipt
of ‘free certified copy’ of the impugned order. While making such observations,
the NCLAT placed reliance on Section 420 of the Companies Act, 2013 and the
NCLT Rules 2016 which stipulate supply of a free copy of every order (passed by
the NCLT) to the concerned parties.
During the course of
adjudication, the NCLAT also noticed Singh Enterprises v. Commissioner of
Central Excise, Jamshedpur and Others (2008) 3 SCC 70, which, inter alia,
observed that when on outer limit for filing an appeal (under a statute) is
specifically provided for, then in such case, Section 5 of the Limitation Act,
1963 has no application. Tribunals, being creature of statute, are not vested
with jurisdiction to condone delay (in filing appeal) beyond the period
prescribed in that statute.
Employees
of Indus Fila v. SPG Macrocosm Limited [Co. Appeal (AT) (Insolvency) No. 857/2019]
The NCLAT while relying on
Section 36 of the Code, observed that amounts of provident fund and gratuity
fund belong to the employees of the CD and hence cannot form part of the
liquidation estate of the CD. In other words, such amounts cannot be taken into
consideration while liquidating a CD under the Code. The NCLAT relied on State
Bank of India v. Moser Baer Karamchari Union [Co. Appeal (Ins.) No.
396/2019]
Umaia
Shanmuga Pandian v. EPC Construction India Limited [Co. Appeal (AT)
(Insolvency) No. 886/2019]
The present case pertained to a
claim of performance bonus being made by the employees of the CD (undergoing
CIRP) on the basis of an internal performance bonus policy promulgated and
issued by the CD. The NCLAT observed that performance linked bonus plans (which
are subject to individual and company performance) are contingent in nature and
hence do not mandatorily constitute a component of employee salary.
Vinod
Mittal v. Rays Power Experts Private Limited [Co. Appeal (AT) (Insolvency) No. 851/2019]
The case involved suppression of
relevant record (emails) by the OC (which reflected a pre-existing dispute)
despite directions of the AA to provide all correspondence pertaining to the
matter. The NCLAT, while holding that the application was wrongly admitted by
the AA, and while allowing the appeal of the CD, imposed costs on the OC as
well as the director of the OC (responsible for suppression of record).
Birla
Industries Group Charity Trust v. Anil Goel [Co. Appeal (AT) (Insolvency) No. 1267/2019]
The NCLAT reiterated
its earlier position that it has no jurisdiction to condone delay beyond 15
(fifteen) days after the conclusion of the 30 (thirty) day filing period, in
terms of Section 61 (2) of the Code. In other words, under Section 61 (2) of
the Code, the NCLAT is empowered to condone delay in preferring appeal by not
more than 15 (fifteen) days. A similar view has been taken by the NCLAT in Premco
Rail Engineers Ltd. v. Korba West Power Company Ltd. [Co. Appeal (AT)
(Insolvency) No. 1105-1106/2019] & Excise and Taxation Department
Haryana Panchkula v. Marmagoa Steel Ltd. [Co. Appeal (AT) (Insolvency) No.
1077/2019].
Technology
Development Board v. Nicco Corporation Limited (in Liquidation) [Co. Appeal
(AT) (Insolvency) No. 1292/2019]
The NCLAT observed that any
shortfall in the gratuity fund created on account of failure on the part of the
CD to make appropriate deposits therein (in accordance with the provisions of
the Payment of Gratuity Act, 1972) should be made good from the assets of the
CD.
The NCLAT further observed that
individual gratuity claims (of the employees) of the CD may be made before the
appropriate authority (under applicable law) and not before the AA.
Andhra
Bank v. Sterling Biotech Limited [IA No. 2787/2019 in Co. Appeal (AT)
(Insolvency) No. 612/2019]
The NCLAT observed that a
settlement under Section 12A of the Code qua a CD can proceed regardless
of ongoing criminal proceedings (relating to money laundering) against the said
CD. The only caveat given by the NCLAT was that the ‘settlement monies’ should
not be ‘proceeds of crime’. The competent authority (i.e. the Enforcement
Directorate) was empowered to examine this aspect.
Asset
Reconstruction Company India Limited v. Koteswara Rao Karuchola [Co. Appeal (AT)
(Insolvency) No. 633/2019]
The NCLAT opined that an entity
against whom proceedings (for money laundering) were ongoing ought not be
permitted to become a member of the COC.
S
Kumar Construction Company v. Bharti Airtel Limited [Co. Appeal (AT)
(Insolvency) No. 1277/2019]
In the present case, a free copy
of the impugned order (passed by the AA) was not supplied to the Appellant. The
NCLAT opined that under such circumstances, an appeal filed within a period of
30 (thirty) days from the date of the knowledge of the impugned order is to be
considered to be within limitation.
B.R.
Traders v. Venkataramanarao Nagarajan [Co. Appeal (AT) (Insolvency) No. 189/2019]
The NCLAT reiterated that any
resolution plan which is less than the liquidation value is unacceptable in as
much as it violates Section 30 (2) (b) of the Code.
In the said matter, inter alia,
an application was filed by a third party to the CIRP for handing back of its
certain machinery which had come to be installed in the plant of the CD
pursuant to a written commercial contract between the parties. The NCLAT
permitted the RP to retain such machinery despite termination of the contract
by the said third party, in view of the RP’s submission that such machinery was
required for keeping the CD as a going concern and that there existed claims
and counter claims between the CD and the third party.
Manica
Ramesh Shah v. AI Fara’s Properties Private Limited [Co. Appeal (AT)
(Insolvency) No. 1047/2019]
The NCLAT observed that a
transaction for sale/purchase of an already existing unit (in a commercial
premises) may not constitute to be a ‘financial debt’ for the purposes of the
Explanation to Section 5 (8) of the Code. The definitions of the expressions
‘allotee’ and ‘real estate project’ must be satisfied. The NCLAT further stated
that the objective was to protect allottees in development projects and not for
enforcing specific performance of property.
Hardeep
Singh Sawhney v. Sawhney Builders Private Limited [Co. Appeal (AT) (Insolvency)
No.1147/2019]
The NCLAT reiterated that in a
Section 7 case, existence of an undisputed debt is a sina qua non for
triggering CIRP. Further, the said debt should also be payable in law and in
fact.
K.
Paramasivam v. The Karur Vyasa Bank Limited [Co. Appeal (AT) (Insolvency) No. 538/2019]
The NCLAT disagreed with the
contention of the Appellant company that it could not be proceeded with under
the Code (in the capacity of being a ‘corporate guarantor’ in view of the fact that
it acted as a surety not for a ‘corporate person’ but for a partnership and
proprietary concern (which is beyond the ambit of Section 7 of the Code).
Sunil
S Kakkad v. Parag Sheth, Resolution Professional/Liquidator [Co. Appeal (AT)
(Insolvency) No. 1260/2019]
The NCLAT while relying on Jindal
Steel and Power Limited v. Arun Kumar [Co. Appeal (Ins.) No. 221/2018,
observed that, at the stage of liquidation of the CD, promoters of the CD are
not eligible to file a ‘scheme’ in terms of Section 230 of the Companies Act,
2013.
