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Punjab and Sind Bank v. Montari Industries Limited and Others

Citation

REED 2021 DRAT Del 10214

Court

DRAT

Subject 

Recovery of Loan - The appellant was aggrieved by the final order passed by the DRT u/s 19 the RDB Act,1993 whereby its claim for recovery of outstanding dues has been decreed in its favour but its case of property no. 28-A, Plot no. 14, Prithvi Raj Road, New Delhi being mortgaged in its favour and for passing of an order for sale of this property has been rejected. The present appeal has been filed only to challenge rejection of its case of mortgage of the said property

Date

October 17, 2021

Bench

Delhi

Applicable Law

Section 19, Recovery of Debts Due to Banks & Financial Institutions Act,1993

Brief

The defendant/respondent Bhai Manjit Singh had taken this objection in written statement but not considered by the DRT. Another objection taken was that the property in question being a HUF property all the co-owners ought to have been impleaded as necessary parties in the O.A. but DRT has not dealt with this objection also and disposed of the O.A. on one ground only and if that ground were to be rejected by this Tribunal then other objections will remain without any finding and on those grounds also the borrowers could succeed. The DRT should have dealt with all the pleas taken by the defendant Bhai Manjit Singh in written statement. The Appellate Tribunal observed that this was a fit case for remanding back the matter for a fresh decision on the point of mortgage taking into consideration all the pleas of bank and Bhai Manjit Singh on which no finding have been rendered. This appeal, therefore, succeeds and the finding of the DRT regarding equitable mortgage of property no.28A, Plot no. 14, Prithviraj Road, New Delhi was set aside and the matter was remanded back to DRT for fresh decision on the controversy of mortgage keeping in mind the observations made hereinabove and uninfluenced by the findings already given in the impugned order.

Srishti Arogyadham Private Limited v. Punjab National Bank and Another

Citation

REED 2021 DRAT Del 10213

Court

DRAT

Subject 

Recovery of Loan - The challenge in this appeal was to the final order passed by the DRT in S.A. filed by the appellant-borrower u/s 17 whereby the S.A. has been dismissed.

Date

October 10, 2021

Bench

Delhi

Applicable Law

Sections 13(2), 13(4), 17, SARFAESI Act, 2002
Rule 8(6), Security Interest Enforcement Rules, 2002

Brief

In view of the authoritative pronouncement of Hon’ble Supreme Court the auction sale in this case liable to set aside. In the case of L&T Finance Ltd., REED 2020 SC 10209, was a case where there was procedural on the part of the secured creditor in issuing notice under Section 13(2) of SARFAESI Act and in view of that it was observed that prejudice should be shown to have been caused to the borrower. Here in the present case there was violation of mandatory Rule 8(6) of the Rules of 2002 under SARFAESI Act. So, the judgement cited did not come to the rescue of the auction purchaser. In the result, this appeal succeeded and the impugned auction sale of the property of the appellant conducted on 04.06.15 was set aside. As a result of this conclusion all the actions of the bank post the auction sale will also stand nullified.

Gimpex Private Limited v. Manoj Goel

Citation

REED 2021 SC 10001

Court

Supreme Court

Subject 

Dishonour of cheque

Date

October 7, 2021

Bench

N.A.

Applicable Law

Sections 138, 139, Negotiable Instruments Act, 1881
Section 482, Code of Criminal Procedure, 1973
Sections 409, 506(1), Indian Penal Code, 1860
Section 39, Indian Contract Act, 1872

Brief

Section 139 of N.I. Act raises the presumption “unless the contrary is proved”. Once the complainant discharges the burden of proving that the instrument was executed by the accused; the presumption under Section 139 shifts the burden on the accused. The expression “unless the contrary is proved” would demonstrate that it is only for the accused at the trial to adduce evidence of such facts or circumstances on the basis of which the burden would stand discharged. The determination of whether a cheque pursuant to a settlement agreement arises out of a legal liability would be dependent on various factors, such as the underlying settlement agreement, the nature of the original transaction and whether an adjudication on the finding of liability was arrived at in the original complaint, the defence raised by the accused, etc. The Single Judge was in error in proceeding to quash the criminal complaint on a priori reasoning that the second set of cheques issued in pursuance of the deed of compromise were not in discharge of a liability and on that basis proceeding to quash the proceedings under Section 482 CrPC. The mere fact that a suit has been instituted before the Madras High Court challenging the deed of compromise would furnish no justification for exercising the jurisdiction under Section 482. The deed of compromise would continue to be valid until a decree of the appropriate court setting it aside is passed. The High Court has also failed to notice the true meaning and import of the presumption under Section 139 which can only be displaced on the basis of evidence adduced at the trial.

Reserve Bank of India v. Srei Infrastructure Finance Limited

Citation

REED 2021 NCLT Kol 10516

Court

NCLT

Subject 

Corporate Insolvency - Application filed by the RBI (Appropriate
Regulator) u/s 227 read with section 239(2(zk) of the IBC, 2016 against the Financial Service Provider

Date

October 7, 2021

Bench

Kolkata

Applicable Law

Sections 3(11), 4, 4(1), 5(8), 7, 13, 14, 15, 17, 18, 19, 20, 31(1), 227, 239(2)(zk), Insolvency and Bankruptcy Code, 2016
Section 45-IE, Reserve Bank of India Act, 1934
Rules 5, 6, Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudication Authority) Rules, 2019

Brief

The Petition made by the Reserve Bank of India is complete in all respects as required by law. It clearly shows that the Respondent/FSP is in default of a debt due and payable, and the default is more than the minimum amount as stipulated under section 4(1) of the Code. Therefore, the default stands established and there was no reason to deny the admission of the Petition. Therefore, the Adjudicating Authority admitted the Petition.

Ashutosh Ashok Parasrampuriya and Another v. Gharrkul Industries Private Limited and Others

Citation

REED 2021 SC 10002

Court

Supreme Court

Subject 

Dishonour of cheque - Appeal against the rejecting the Application u/s 482 of the Appellants

Date

October 7, 2021

Bench

N.A.

Applicable Law

Sections 138, 141, 141(2), Negotiable Instruments Act, 1881
Sections 200, 201, 202, 203, 204, 482, Code of Criminal Procedure, 1973

Brief

In the instant case, on the presentation of the cheque of Rs.10,00,000/- was dishonoured due to “funds insufficient” in the account and after making due compliance, complaint was filed and after recording the statement of the complainant, proceedings were initiated by the learned Magistrate and no error has been committed by the High Court in dismissing the petition filed under Section 482 CrPC under the impugned judgment. The submission of learned counsel for the appellants that they are the nonexecutive Directors in the light of the documentary evidence placed on record by Form No. 32 issued by the Registrar of Companies, both the appellants are shown to be the Directors of the Company, still open for the appellants to justify during course of the trial. The apex Court was of the considered view, that the High Court has rightly not interfered in exercise of its jurisdiction under Section 482 CrPC for quashing of the complaint.

Gujarat State Disaster Management Authority v. Aska Equipments Limited

Citation

REED 2021 SC 10003

Court

Supreme Court

Subject 

Pre-Deposit Amount - Amount awarded Arbitration and Conciliation Act, 1996 - Appeal/ Application filed u/s 34 of the Arbitration and Conciliation Act, 1996 read with Section 19 of the MSME Act, 2006 - Whether the Appellate Court would have any discretion to deviate from deposit of 75% of the awarded amount as a pre-deposit

Date

October 7, 2021

Bench

N.A.

Applicable Law

Sections 18, 19, Micro, Small and Medium Enterprises Development Act, 2006
Section 34, Arbitration & Conciliation Act, 1996

Brief

The short question posed for the consideration of the Supreme Court was,
whether in an appeal/application filed under Section 34 of the Arbitration
and Conciliation Act, 1996 read with Section 19 of the MSME Act, 2006,
the Appellate Court would have any discretion to deviate from deposit of
75% of the awarded amount as a pre-deposit? On a plain/fair reading of Section 19 of the MSME Act, 2006, at the time/before entertaining the application for setting aside the award made under Section 34 of the Arbitration and Conciliation Act, the applicant/appellant has to deposit 75% of the amount in terms of the award as a pre-deposit. The requirement of
deposit of 75% of the amount in terms of the award as a pre-deposit is
mandatory. However, at the same time, considering the hardship which
may be projected before the Appellate Court and if the Appellate Court was
satisfied that there shall be undue hardship caused to the appellant/ applicant to deposit 75% of the awarded amount as a pre-deposit at a time, the court may allow the pre-deposit to be made in instalments.

Amanat Randhawa Hotels Private Limited v. Shashi Kant Nemani, Resolution Professional of Aryavir Buildcon Private Limited and Others

Citation

REED 2021 NCLAT Del 10510

Court

NCLAT

Subject 

Corporate Insolvency - Resolution Plan - Appeal preferred by a unsuccessful Resolution Applicant

Date

October 6, 2021

Bench

New Delhi

Applicable Law

Sections 15, 30, 30(6), 31, Insolvency and Bankruptcy Code, 2016
Regulation 36A, IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

Brief

Keeping in view the decisions of the Hon’ble Supreme Court in Ebix Singapore Pvt. Ltd. v. Committee of Creditors of Educomp Solutions Ltd. & Anr., REED 2021 SC 09523, and also taking into consideration, the legislative intent of the statute together with the fact that in the instant case the Resolution Plan was accepted by 100% of voting share in the CoC Meeting dated 21.06.2021 and having regard to the fact that the Appellant had never participated in the EoI, the Appellate Authority were of the view that any reliefs granted in contra to the timelines would be ultra vires to the scope and objective of the Code. The ratio of the Hon’ble Supreme Court in Ebix Singapore Pvt. Ltd., REED 2021 SC 09523, is squarely applicable to the facts of this case wherein it was observed by the Hon’ble Apex Court that once the Plan is approved by majority of the CoC as provided for under Section 30 of the Code, then no fresh plans may come in intervention of an already approved Plan.

Sach Marketing Pvt. Ltd. v. Resolution Professional of Mount Shivalik Industries Ltd., Ms. Pratibha Khandelwal

Citation

REED 2021 NCLAT Del 10511

Court

NCLAT

Subject 

Corporate Insolvency - Appeal u/s 61 of the Code - Whether ‘debt’ in question was a ‘Financial Debt’

Date

October 6, 2021

Bench

New Delhi

Applicable Law

Sections 3(10), 5(7), 5(8), 5(8)(f), 5(20), 5(21), 61, Insolvency and Bankruptcy Code, 2016
Rule 11, National Company Law Appellate Tribunal Rules, 2016

Brief

The ‘Corporate Debtor’ had accepted the ‘Security Deposit’ from the Appellant and credited the interest for some time against such amounts for the period 2014-15, and bearing in mind the payment of interest on the amounts borrowed by the ‘Corporate Debtor’ is nothing but a consideration for the time value of money and the interest is being paid to the Appellant for using the money belonging to the Appellant over a period of time and hence the Appellate Authority arrived at the conclusion that the status of Appellant was that of a Financial Creditor vis-à-vis the amount of ‘Security Deposit’ as per Section 5(7) read with Section 5(8) of the Code. The Appellate Authority was of the considered view that the ratio of the Judgement of the Supreme Court in M/s. Orator Marketing Pvt. Ltd., REED 2021 SC 07562, was squarely applicable to the facts of this case and we hold that the ‘debt’ in question is a ‘Financial Debt’.

Starlog Enterprises Ltd. v. Avil Menezes, IRP for AMW Motors Ltd.

Citation

REED 2021 NCLAT Del 10512

Court

NCLAT

Subject 

Corporate Insolvency - Whether the 'debt' in question was a 'financial debt'

Date

October 6, 2021

Bench

New Delhi

Applicable Law

Sections 5(8), 7, 61, Insolvency and Bankruptcy Code, 2016
Section 372A, Companies Act, 1956
Section 18, Limitation Act, 1963

Brief

The Appellate authority observed that it was not a ‘Financial Debt’ as the ‘Debt’ was not disbursed against the consideration for the time value of the money and does not meet any of the criteria as stated under the Code, the various provisions as stated above. The Appellant was not in the business of providing any banking or financial services rather it was engaged in crane rental and in infrastructure solutions providers. Even assuming everything in favour of the Appellant it can be maximum be considered as ‘operational creditor’ and in no way it can come under ‘Financial Debt’.

Bijoy Prabhakaran Pulipra, Resolution Professional, PVS Memorial Hospital Private Limited v. State Tax Officer (Works Contract), SGST Department

Citation

REED 2021 NCLAT Chen 10515

Court

NCLAT

Subject 

Corporate Insolvency - Exercise of the powers of an IRP/RP

Date

October 6, 2021

Bench

Chennai

Applicable Law

Sections 9, 14, 25, 28, 30(6), 31(1), 60(5), 60(5)(c), 61(1), 238, Insolvency and Bankruptcy Code, 2016
Sections 62, 107, CGST/SGST Act, 2017
Regulations 7, 13, 14, IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

Brief

In the instant case, the IRP/RP has revised the admitted claim of the Respondent. The above exercise of revision of the GST assessment order was beyond the jurisdiction of the IRP/RP. The IRP/RP was not having the adjudicatory power given by the GST Act. Regulation 14 of the CIRP Regulations only authorises the IRP/RP to exercise power where the claim was not precise due to any contingency or other reasons. In the circumstances stated above, the Appellate Authority considered that the Resolution professional committed an error in exercising their power and exercised the powers of GST Authorities under the pretext of Regulation 14 of the Code, which was not sustainable.