Tribunal Monthly Roundup July 2023 | Top Stories on Illegal Sand Mining on Yamuna Bank; Mumbai Floods 2005; Tata Power; and more
A quick legal roundup to cover important stories from Tribunals, Regulatory Bodies, Commissions this month
IBC
‘Personal guarantor’s claim of getting right to be heard at belated stage not sufficient’; Delhi High Court dismisses petition, leaves matter open for NCLT
“If in the present case, the petition is entertained, it will eventually subvert the procedure laid down under the Insolvency and Bankruptcy Code, 2016 and the respondent in return will be denied the opportunity to present their case before the concerned NCLT.”
IBC overrides Electricity Act; Supreme Court explains hierarchy for settling dues in insolvency cases
In the case at hand, PVVNL had argued that the rights of electricity suppliers were not subordinate and subject to the ‘priority of claims’ mechanism under the IBC.
Explained | Supreme Court’s verdict on constitutionality of Section 327(7) of Companies Act vis-à-vis preferential payment of dues to workers after liquidation
The Supreme Court said that it cannot adopt a doctrinaire approach. Some sacrifices have to be always made for the greater good, and unless such sacrifices are prima facie apparent and ex facie harsh and unequitable as to classify as manifestly arbitrary, these would not be interfered with by the court. Thus, no priority can be given to workers’ dues after liquidation of the company under the IBC.
Looking to a Settlement Mechanism for Avoidance Actions under the IBC
by Anoop Rawat†, Saurav Panda†† and Amrit Mahal†††
Cite as: 2023 SCC OnLine Blog Exp 51
Personal Guarantors’ Insolvency: Commencement of Interim Moratorium
by Sharmistha Ghosh†
Threshold limit includes both principal amount and interest under IBC; NCLAT set aside NCLT’s order
NCLAT held that the Adjudicating Authority committed error in rejecting the S. 7 application for not fulfilling ‘threshold’ when Deed of Guarantee mentions about the interest on default.
Operational Creditors must be paid equivalent amount as per Section 53 of the IBC in case of liquidation of Corporate Debtor: SC
The Court said that Vistra ITCL (India) Ltd. would be treated as a secured creditor in terms of Section 52 and 53 of the IBC, and would be entitled to retain the security interest in the pledged shares.
NCLT admits Go Air insolvency plea
A creditor has limited grounds to object to S. 10 of IBC application.
What is the rule for settlement after constitution of ‘Committee of Creditors’? NCLAT Answers
“Any settlement after passing of the impugned order and after constitution of the CoC is only permissible when the same is approved with 90% vote share of CoC.”
Approaching police without resorting to special procedure under IB Code to arm twist the Resolution Professional is inappropriate: Madras High Court
Madras High Court said that there is no reason why the complaint was not filed either before IBBI or NCLT for the alleged fraud.
Delhi High Court changes the status of Look Out Circular; directs immigration authorities to inform SFIO about former Director of Techpro Systems Limited arrival and departure
The Court opined that the present case would fall under the Office Memorandum which stated that “where there is no cognizable offence under IPC and other penal laws, the LOC subject cannot be detained/arrested or prevented from leaving the country.”
Delhi High Court dismisses PIL filed seeking directions to draft and implement a comprehensive scheme to address the grievances of home buyers availing home loans
The PIL seeks formulation and implementation of a scheme that conclusively addresses the grievances of other home buyers who may not have the capacity to approach courts/forums to seek redressal against builders.
Initiation of IBC proceedings does not absolve Company Directors/Signatories of criminal liability under Section 138 NI Act: SC
The Supreme Court observed that the scope of nature of proceedings under the two Acts are quite different and would not intercede each other.
Swiss Challenge and Insolvency and Bankruptcy Code – Does the Shoe Fit The Size?
by Swarnendu Chatterjee†, Anwesha Pal†† and Megha Saha†††
Cite as: 2023 SCC OnLine Blog Exp 22
In view of moratorium declared by NCLT, all the proceedings in Court, Tribunal cannot continue on account of Amendment to S. 178(6) IT Act: ITAT
ITAT reiterated that IBC has overriding effect on all the acts including Income Tax Act (‘IT Act’) which has been specifically provided under Section 178(6) of the IT Act as amended w.e.f. 01-11-2016.
[IBC] Statutory authorities chose not to submit their proof of claim; Delhi High Court quashes show cause issued by Directorate of Revenue Intelligence
In the instant case, the Directorate of Revenue Intelligence neither submitted proof of claim nor responded to a specific communication via an e-mail addressed to Senior Intelligence Officer. This is a case where despite knowledge, the statutory authorities chose not to submit their proof of claim.
PF and gratuity dues not part of liquidation estate; cannot be recovered under Section 53 of IBC which provides for waterfall mechanism: Supreme Court
Supreme Court upheld the NCLT order that the provident fund, pension fund and gratuity fund are not part of the liquidation estate, for distribution under Section 53 of the IBC and the same has to be paid to the employees under the stated heads.