NCLAT Upholds Dismissal Of Section 7 Petition, Corporate Debtor Willing To Pay Full Amount, Opposed By Financial Creditor - The Daily Guardian
Connect with us

Legally Speaking

NCLAT Upholds Dismissal Of Section 7 Petition, Corporate Debtor Willing To Pay Full Amount, Opposed By Financial Creditor

Published

on

NCLAT Upholds Dismissal Of Section 7 Petition, Corporate Debtor Willing To Pay Full Amount, Opposed By Financial Creditor

The National Company Law Appellate Tribunal (“NCLAT”) in the case Reliance Commercial Finance Limited v Darode Jog Builder Private Limited, the Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Judicial Member, Justice M. Satyanarayana Murthy and the Technical Member, Mr. Barun Mitra observed while adjudicating an appeal filed in Reliance Commercial Finance Limited v Darode Jog Builder Pvt. Ltd., has upheld the Adjudicating Authority’s decision to not admit a petition under Section 7 of IBC, despite there being a default and a debt. It was recorded by the bench the Corporate Debtor an opportunity to pay/settle the full amount of default despite the Financial Creditor’s unwillingness to enter settlement.

Background Facts of the Case:
The Appellant/ Financial Creditor, Reliance Commercial Finance Limited had sanctioned Term-Loans of Rs. 19.5 Crores to the Corporate Debtor i.e., Darode Jog Builder Pvt. Ltd. on 29.07.2013. In 2017, the Loan Accounts were declared as the Non-Performing Assets. On 04.11.2019, a petition under Section 7 of Insolvency and Bankruptcy Code, 2016 (“IBC”) was filled by Financial Creditor, wherein seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) over a default of Rs. 15,79,41,658/- against the Corporate Debtor.
It was observed that in an hearing held on 06.07.2022, the Corporate Debtor acknowledged its liability to pay and made an offer of Rs. 12.75 Crores, which is to be paid within 45 days. Thus, the Adjudicating Authority directed the Counsel for the Financial Creditor to obtain appropriate instructions. Thus, the court observed that if the Settlement did not take place, the Petition would automatically be admitted on the next date of hearing.
The court on the next date of hearing i.e. 11.07.2022, it was submitted by the Corporate Debtor that it is willing to deposit the entire amount of Rs. 15,79,41,658/- within 45 days. However, the Financial Creditor expressed its unwillingness for settling the matter. The Bank account details of the Financial Creditor were obtained by the Adjudicating Authority and alongside granted liberty to the latter to file for restoration of petition in case said amount is not deposited within 45 days. The court disposed of the appeal.
The Financial Creditor filed an appeal before the NCLAT, aggrieved by the order dated 11.07.2022.

Contentions Made By Appellant:
It was submitted by the Financial Creditor that the Adjudicating Authority committed error in disposing of the Petition, as it was not willing to settle the matter. However, the Adjudicating Authority could not have permitted the Corporate Debtor to deposit amount in Financial Creditor’s account.

Contentions Made By Respondent:
It was argued by the Corporate Debtor that Financial Creditor was unwilling to settle as earlier entire amount was not offered and settlement had not taken place despite several adjournments. Further, it was submitted that the Corporate Debtor has financial capacity to deposit the entire amount.

NCLAT Decision:
The Bench placed reliance on the Supreme Court judgment in the case Vidarbha Industries Power Limited Vs. Axis Bank Limited, Civil Appeal No. 4633 of 2021.
It was observed by the bench that as per the judgment, even after debt and default is there, Adjudicating Authority has to apply its mind to assess the feasibility of initiating CIRP.
It stated that when the Corporate Debtor has complied to deposit the entire defaulted amount of the Financial Creditor as permitted by the Adjudicating Authority and no purpose and occasion shall survive to still proceed with the Corporate Debtor Insolvency Resolution.
Accordingly, the bench observed that the proceedings under Section 7 are for resolution of insolvency. Adjudicating Authority had not erred in ascertaining whether the Corporate Debtor can comply to deposit the entire defaulted amount in bank account of Financial Creditor’s. Further, the court observed that the Financial Creditor’s interest was fully protected, since liberty was already given to revive the petition in case full amount was not received within 45 days.

The bench dismissed the appeal.

The Daily Guardian is now on Telegram. Click here to join our channel (@thedailyguardian) and stay updated with the latest headlines.

For the latest news Download The Daily Guardian App.

Legally Speaking

Court sends Waqf Board scam co-accused to 14 day judicial custody

Published

on

A Delhi court on Monday remanded Kausar Imran Siddiqui alias Laddan, co-accused in Delhi Waqf board scam case, to 14 days custody.  

AAP MLA Amanatullah Khan is the primary accused in the case and is out on bail. The Anti-Corruption Bureau (ACB) has stated that Laddan is a fund manager for Khan. The Duty Sessions Judge at Rouse Avenue Court also expressed its displeasure over the non-presence of ACB on the previous date.  

ACB had submitted to the court Ladan’s “handwriting sample” and sought 7 days of custody for him.

The court observed that the agency had not given any reasonable answer for its absence on previous occasion. Thereafter, he was sent to 14 day judicial custody.

AAP MLA was arrested for alleged irregularities in appointment in Delhi Waqf Board during his chairmanship.
Accused Kausar Imran Siddiqui alias Laddan was produced on a production warrant before the court on 27th September. He was interrogated and arrested with the permission of the court.

Laddan’s name came into the frame, when additional public prosecutor Anil Srivastava opposed Khan’s bail plea. He stated that a diary was recovered from Ladan’s house.  It was alleged that he was Khan’s fund manager.  Earlier, the (ACB) had said that money was sent to Dubai and other money transactions need to be investigated. It also stated that a large amount of money was transferred to a party via Dubai. There were 100 people who either received or paid money to Laddan. Out of these 37 people have transactions of crores of rupees.                                                                                                                                                                          

This diary also has an entry about one Zeeshan Haider, who received crores of rupees. He is also a close associate of the accused, ACB had argued. The ACB has also submitted that Laddan is a nominated functionary of a political party. He has photographs with the accused during an iftar party. Additionally, 14 crores sale deed is recovered, which is said to be a ‘Benami property’.

Previously, Ladan was in judicial custody in another case lodged at Jamia Nagar police station. He was arrested from Telangana.

Continue Reading

Legally Speaking

Solicitor General Tushar Mehta incharge of allocation of cases to ASG’s

Tarun Nangia

Published

on

Solicitor General Tushar Mehta incharge of allocation of cases to ASG’s

An office memorandum issued by the Ministry of Law and Justice Indicates that Solicitor General Tushar Mehta would be assigned the responsibility of allocation of cases of ASG’s and panel counsels.
The office memorandum issued September 13th states, A Modification is made in procedure of allocation of cases to Law Officers, Counsel by lncharge Central Agency Section, Branch Secretariats for cases before the Supreme Court and High Courts at Delhi, Mumbai, Kolkata, Chennai & Bengaluru.
In respect of the cases before the Supreme Court, the list of cases on daily basis, will first be placed before the Ld. Attorney General for India for the purpose of his selecting the matters in which he considers his appearance to be necessary. Thereafter, the list of cases will be placed before the Ld. Solicitor General of India who will mark the matters to himself, to the Additional Solicitors General of India to appear alone or with Attorney General for India, Solicitor General of India to the counsel from Group’A’l’B’ l’C’Panel.
Further, in respect of the cases before the High Courts of Delhi, Bombay (PB), Calcutta (PB), Madras (PB) and Karnataka (PB), cases on daily basis will be allocatedand will be marked by the lncharge, Litigation, theBranch Secretariats in consultation with the Additional Solicitor General of India concerned.
It is being directed to ensure strict compliance of the procedure being modified as above to all the subordinate offices of this Department including the Central Agency Section, Litigation (High court) section and all the four Branch Secretariats at Mumbai, Kolkata, Chennai and Bengaluru.
The same being issued with the approval of the competent authority, the office memorandum says.

Continue Reading

Legally Speaking

Allahabad High Court: Censures Woman Who Protested In Courtroom Against Grant Of Bail To Accused; Unbecoming Of A Fair Litigant

Published

on

Allahabad High Court: Censures Woman Who Protested In Courtroom Against Grant Of Bail To Accused; Unbecoming Of A Fair Litigant

The Allahabad High Court in the case Sapna v. State of U.P. observed and censured the conduct of a woman who protested in the courtroom against the grant of bail to an accused. The court noting that she was purportedly from the informant’s side.
The bench comprising of Justice Siddharth called her conduct to be unbecoming of a fair litigant.
However, when the Court granted bail to accused Sapna, a woman, who was standing in court room protested in loud voice and was taken out forcibly by the lawyers and litigants. The court noted that she created lots of disturbance outside the court as well.
On September 23, the incident took place before the bench of Justice Siddharth when it was dealing with the bail plea of one Sapna who was arrested in December 2019 in connection with the murder of one named Vivek Kumar Gupta.
Further, the accused was booked for the murder of Gupta on the basis of information received from an informer that the applicant, her husband and other co-accused were responsible for the murder of the deceased.
Before the court, it was argued by her counsel that the dead body of the deceased was not recovered on the pointing of the applicant and her signatures were forcibly obtained on the recovery memo. Thus, the cause of the death of the deceased was not ascertained in post-mortem nor time of death was ascertained.
Further, it was contended that the applicant had been implicated in this case only on the basis of her confessional statement and the recovery of one spade and one Sabble was allegedly made from the pointing out of the co-accused and that no blood stains were found thereon. Also, it was argued that the accused was implicated in this case only because she is the wife of the co-accused.
It was observed by the court that the entire prosecution case was based on the confessional statements of the applicant and the co-accused and that even in the confessional statement of the applicant and the role of causing the murder of the deceased had not been assigned to her.
The Court further noting that the trial is not likely to be concluded in near future and that the applicant is in jail along with her two years old son, it has been decided by the court to grant her bail on the condition of her furnishing a personal bond and two sureties each in the like amount to the satisfaction of the court concerned.

Continue Reading

Legally Speaking

CBDT Extended Due Date For Filling Various Reports Of Audit For AY 2022-23 To October 7

Published

on

CBDT Extended Due Date For Filling Various Reports Of Audit For AY 2022-23 To October 7

The Central Board of Direct Taxes (CBDT) has extended the timeline for filing various reports of audit for Assessment Year 2022-23 under the Income Tax Act, 1961, for the certain categories of assessees.
Vide Circular No. 19/2022, dated 30.09.2022, the CBDT has extended the due date from 30th September, 2022 to 7th October, 2022.
However, The Circular provides on considering the of difficulties faced by the taxpayers and other stakeholders in electronic filing of various reports of audit under the provisions of the Income-tax Act,1961 (Act), the Central Board of Direct Taxes (CBDT), in exercise of its powers under Section 119 of the Act, wherein extending the due date of furnishing of report of audit under any provision of the Act for the Previous Year 2021- 2022, which was 30th September 2022 in the case of assessees referred in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act, to October 7th, 2022.

Continue Reading

Legally Speaking

Madhya Pradesh High Court Answers: Is Single Writ Appeal Against Two Separate Orders Of Writ Court Maintainable?

Published

on

Madhya Pradesh High Court Answers: Is Single Writ Appeal Against Two Separate Orders Of Writ Court Maintainable?

The Madhya Pradesh High Court in the case M/S Fort Crushing Metal Through Sunil Jian vs M.P. Paschim Kshetra Vidyut Vitran Co. Ltd. And Others, the Indore Bench observed and has recently upheld the maintainability of a writ appeal preferred against two separate orders passed by a Writ Court.
The bench comprising of Justice Subodh Abhyankar and Justice S.K. Singh observed while rejecting the contentions raised by the Respondents challenging the maintainability of the appeal.
In the present case, the court is of the considered opinion that it would only serve the interest of justice if the appellant can also challenge the order of rejection of review petition in the appeal preferred against the original order, in a review petition, as three are occasions when the appellate court itself is of the opinion that the appellant could have raised the grounds raised in the appeal.
Facts of the Case:
An appeal is preferred by the Appellant against the order passed by the Writ Court. Thus, in the same appeal, the Appellant was also challenging the rejection of its review petition against the same order passed by the Writ Court. Later, in the appeal, the respondent moved an application challenging the maintainability of the appeal.
Before the court, it was submitted by the respondents’ provisions under Section 2(1) of Madhya Pradesh Uchha Nyayalaya (Khand Nayaypeeth Ko Appeal) Adhiniyam, 2005, and the rules made thereunder do not provide for one appeal against the two separate orders. It was also referred by them the provisions under Order XLVII Rule 7 CPC, to assert that an order of a court rejecting an application for review is not appealable.
The Court while examining the submissions of parties and documents on record, the Court was not convinced with the arguments put forth by the Respondents. The court while dealing with the submission of the Respondents that pursuant to the provisions under Order XLVII Rule 7 CPC, the appeal was not maintainable, it was pointed out by the court that the appeal was not solely against the dismissal of review petition-
However, so far as the Rule 7(1) of Order 47 of CPC is concerned, it stipulates that an order of the Court rejecting the review application shall not be appealable. In the present appeal, the court has been preferred not only against the order passed by the writ court but also against the order passed in the review petition, and thus, it is not a case where the writ appeal has been preferred only against the order of rejection which has been passed in review petition, in such circumstances, even if the said order passed in review petition is also challenged in this writ appeal by the appellant, it cannot be said that it would render the writ appeal as not maintainable.
Accordingly, the court held that the writ appeal preferred by the Petitioner was maintainable. The court dismissed the application on the ground that it had been preferred against two orders was rejected.

Continue Reading

Legally Speaking

SC Collegium Recommends elevation of Justice Prasanna B. Varale as Karnataka HC Chief Justice; Recommends New CJs For Orissa, J&K

Published

on

Supreme court

The Supreme Court Collegium has recommended elevation of Justice Prasanna B. Varale, Bombay High Court Judge as the Chief Justice of Karnataka High Court.
Justice Prasanna B. Varale was born on 23rd June, 1962 and enrolled as an Advocate on 12th August, 1985. He also served as a lecturer in Law at Ambedkar Law College, Aurangabad from 1990 to 1992 and as the Assistant Government Pleader and Additional Public Prosecutor, High Court Bench at Aurangabad and also as an Additional Standing Counsel for Union of India.
On July, 18., he was elevated to the bench at Bombay High Court.
The Supreme Court Collegium also recommended to elevate of Orissa High Court Judge, Justice Jaswant Singh, as its Chief Justice.
Justice Singh was February 23, 1961 and was enrolled as an Advocate in 1986 in Haryana. In April 1988, he moved to Chandigarh and held the posts of Assistant Advocate General, Deputy Advocate General, Senior Deputy Advocate General and Additional Advocate General, in the office of Advocate General, Haryana, since March 1991.
On December 5, 2007., he was elevated as a Judge of Punjab and Haryana High Court and on 8th October, 2021., he was transferred to the Orissa High Court.
The Collegium also J&K High Court’s Judge, Justice Ali Mohammad Magrey to take charge as the Chief Justice.
Justice Magrey was born on 8th December, 1960 and enrolled as Advocate in the year 1984. However, he remained as standing counsel from 1986 onwards for various State instrumentalities and was appointed as Additional Advocate General in February, 2003. In September 2009, he was appointed as Senior Additional Advocate General.
On 8th March, 2013., he was appointed as Permanent Judge of the Jammu and Kashmir High Court.

Continue Reading

Trending