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“Once a Secured Creditor relinquishes its security interest to the liquidation estate, it cannot seek priority among other Secured Creditors on the basis of the charge and is only entitled to receive proceeds from the sale of assets in the manner specified under Section 53 of the IBC.”
The NCLT gave the first right to buy shares to the petitioners and then the Deccan Group. If neither party purchased the other’s shares, the NCLT would consider winding up the company under Section 242(1)(b) of the Companies Act.
The NCLT acknowledged the impact of force majeure events, particularly the unprecedented rise in coal prices and operational disruptions caused by the COVID-19 pandemic on Corporate Debtor.
“The present one is a case where material facts have not been disclosed by the Applicant Company, violating Section 230 (2)(a) of the Companies Act, 2013, which in our considered opinion is bound to prejudice the public interest at large.”
by Prachi Johri* and Rishi Thakur**
Editorial Board to the NLS Business Law Review is calling for submissions for Volume 11(2) of the Journal
Cyril Amarchand Mangaldas (“CAM”) advised Hindustan Unilever Limited (HUL)
“The essence of the IBC lies in resolving insolvency matters through a process driven approach, and any deviation from its prescribed scope would undermine the legislative intent of the Code.”
“Decision taken by the CoC for liquidation in commercial wisdom of the CoC should not be interfered with by the Adjudicating Authority.”
The NCLT held that non-delivery of possession despite payments and continued acknowledgment of liability through emails and communications proved default under Section 7 IBC.
The NCLT held that the Resolution Professional does not have adjudicatory powers to invalidate or challenge the charges based on an absence of NOC.
Cyril Amarchand Mangaldas (CAM) advised IDFC Limited (“IDFC”) and IDFC Financial Holding Company Limited (“IDFC FHC”)
The instant matter revolved around a deadlock in management caused by alleged financial mismanagement and oppressive actions by the respondents.
NCLT held that the Resolution Professional followed the principles of Natural Justice and considered relevant documents, therefore, the Personal Insolvency Resolution Process should be initiated.
“The term “personal guarantor” is defined under Section 5(22) of the IBC as “personal guarantor” means an individual who is the surety in a contract of guarantee to a corporate debtor.”
“A provision vesting “inherent powers” on a Court or Tribunal are to be used sparingly and should not be used to imply and read in substantive powers where the statue itself does not prescribe such powers.”
The NCLT noted that Form AA, meant for individual Insolvency Professionals, had been modified by the Insolvency Professional Entity to fit its consent as no separate form for IPEs exists.
Interviewed by K V Vinaya
by Anuja Pethia* and Rishabh Govila**