IBC, 2016 : Important Decisions of May 2024 (Part 1)

IBC : Important Decisions of May 2024 (Part 1) 

Insolvency and Bankruptcy Code, 2016 was enacted with a purpose. There are few interesting decisions pronounced some years ago which explained the contours of IBC, 2016. Innoventive Industries Ltd v. ICICI Bank [2017] GCtR 1171 (SC), Pioneer Urban Land and Infrastructure Limited & Anr v Union of India [2019] GCtR 628 (SC) and Swiss Ribbons Pvt Ltd v. Union of India[2019] GCtR 1313 (SC) are some of those older but interesting decisions dealing with aspects of IBC, 2016.

IBC, 2016 claims to be "an Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto."

S.238 of IBC, 2016 states that "the provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law".

In the month of May 2024, few interesting decisions dealing with IBC, 2016 have been pronounced.

In this Part 1, a list of some important decisions dealing with issues of IBC pronounced in the month of May 2024 are given below : -

1. Sanjay Sharma v. Super Iron Foundry Pvt. Ltd. [2024] GCtR 1246 (NCLAT)

2. Optinova AB v. Bio-Med Health Care Products Private Ltd [2024] GCtR 1247 (NCLAT)

3. Rajesh Lallubhai Chitalia v. Brijendra Kumar Mishra & Anr [2024] GCtR 1248 (NCLAT)

4. Sumer Radius Realty Pvt. Ltd. v. Avenue 54 Welfare Association & Ors. [2024] GCtR 1249 (NCLAT)

5. Jagdish Prasad Chokhani v. IDBI Bank Ltd. [2024] GCtR 1250 (NCLAT)

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters/blogs without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made by the violator. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957. This is not to be considered as any professional legal advice and does not constitute client-attorney relationship.

NCLT's Order Unsustainable : Appeal Filed by Resolution Applicant Allowed

 NCLT's Order Unsustainable : Appeal Filed by Resolution Applicant Allowed

According to S.31 (2) of IBC, 2016, NCLT has the power to reject the resolution plan. The process of fast track CIRP can be seen from the provisions of S.56 (1) where a time period of 90 days has been mentioned. 

Sec. 60 (1) of IBC, 2016 for territorial jurisdiction is linked with the place where the registered office of the corporate person is located. 

In a recent case of December 2023 arising out of litigation under IBC, 2016, the appeal was filed by resolution applicant challenging the Order of the NCLT. 

In Express Resorts and Hotels Ltd v Amit Jain [2023] GCtR 2127 (NCLAT), the approach of NCLT in dealing with applications filed by resolution applicants was exposed. Finally, the appeal filed by Resolution applicant was allowed and NCLT's Order was termed as "unsustainable" at page 13. 

Surprisingly, the entire discussion makes absolutely no mention about the ratio of Innoventive Industries Ltd v ICICI Bank [2017] GCtR 1171 (SC). 

One can download full copy of the decision free of cost from the following link : - 

https://nclat.nic.in/display-board/judge 

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters/blogs without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957. This is not to be considered as any professional legal advice and does not constitute client-attorney relationship.

IBC, 2016 : Suspended Director's Appeal Challenging Order of NCLT Dismissed

 IBC, 2016 : Suspended Director's Appeal Challenging Order of NCLT Dismissed

Litigations under Insolvency and Bankruptcy Code, 2016 ("IBC, 2016") occurs at various levels. 

According to S.5(7) of IBC, 2016, “financial creditor” means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to. It is important to note that under S.14 (2) of IBC, 2016 "the supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period". S.16 (1) of IBC, 2016 permits NCLT to appoint an IRP. 

In a recent case [Citation : Mehulkumar Arvindbhai Patel and Anr. v Vinod Tarachand Agarwal [2023] GCtR 2126 (NCLAT)], the suspended Director had filed the appeal. 

The appeal was filed challenging the Order of NCLT. After untangling one of the most controversial issues related to IBC, 2016, the appeal filed by suspended director was dismissed in December 2023. 

One can download full copy of the decision free of cost from the following link : - 

https://nclat.nic.in/display-board/judge 

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters/blogs without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957. This is not to be considered as any professional legal advice and does not constitute client-attorney relationship.

IBC, 2016 : NCLT's Order passed in Contravention of Rules Set Aside

 IBC, 2016 : NCLT's Order passed in Contravention of Rules Set Aside

Section 3 (11) of Insolvency and Bankruptcy Code, 2016 ("IBC, 2016") defines debt and says that “debt” means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt." Sec. 6 of IBC, 2016 permits even a corporate debtor initiate CIRP. 

In a recent case related to IBC, 2016 in Jasti Samba Siva Rao v SREI Equipment Finance Ltd [2023] GCtR 2125 (NCLAT, Chennai), the Order of National Company Law Tribunal ("NCLT") was challenged. 

Explaining the effect of applicable Rules, the Order passed by NCLT was set aside.

One can download full copy of decision free of cost from the following link : - 

https://nclat.nic.in/display-board/judge 

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters/blogs without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957. This is not to be considered as any professional legal advice and does not constitute client-attorney relationship.

IBC, 2016 : 5 Important Judgments of Supreme Court

 IBC, 2016 : 5 Important Judgments of Supreme Court

Many decisions deal with Insolvency and Bankruptcy Code, 2016.

5 important ones dealing with IBC, 2016 are as follows : 

1. Swiss Ribbons Pvt. Ltd. & Anr. v Union of India & Ors [2019] GCtR 1313 (SC).

2. Innoventive Industries Ltd v ICICI Bank [2017] GCtR 1171 (SC)

3. Pioneer Urban Land and Infrastructure Limited & Anr v Union of india [2019] GCtR 628 (SC).

4. Ghanashyam Mishra & Sons Pvt Ltd v Edelweiss ARC Ltd [2021] GCtR 3372 (SC).

5. Ebix Singapore Private Limited  v Committee of Creditors of Educomp Solutions Limited & Anr [2021] GCtR 2124 (SC).

Kindly note that full text Judgments of Hon'ble Supreme Court can be downloaded absolutely free of cost from the official website at the link https://main.sci.gov.in/judgments - Then entering the date of Judgment.

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction.