Relevant Judgments

• Supreme Court

  • NGAITLANG DHAR VS. PANNA PRAGATI INFRASTRUCTURE PVT. LTD. & ORS., CIVIL APPEAL NOS .3665-3666 OF 2020 WITH CIVIL APPEAL NOS. 37423743 OF 2020, JUDGEMENT DATED 17.12.2021, Hon’ble Supreme Court held that it is trite law that ‘commercial wisdom’ of the CoC has been given paramount status without any judicial intervention and the opinion expressed by the CoC after due deliberations in the meetings through voting, as per voting shares, is the collective business decision and that the decision of the CoC’s ‘commercial wisdom’ is non -¬ justiciable, except on limited grounds as are available for challenge under Section 30(2) or Section 61(3) of the IBC.
  • THE BIJNOR URBAN COOPERATIVE BANK LTD., BIJNOR & OTHERS VS. MEENAL AGARWAL & OTHERS, CIVIL APPEAL NO. 7411 OF 2021, JUDGEMENT DATED 15.12.2021, Hon’ble Supreme Court set aside the order of the High Court and held that no writ of mandamus can be issued by the High Court in exercise of powers under Article 226 of the Constitution of India, directing a financial institution/bank to positively grant the benefit of OTS to a borrower.

• High Court

  • MURLI INDUSTRIES LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX – BOMBAY HIGH COURT, WRIT PETITION NO. 2948 OF 2021 WITH WRIT PETITION NO. 2965 OF 2021, ORDER DATED 23.12.2021, Hon’ble High court of Mumbai held that the Authorities of the Income Tax Department cannot issue notice under Section 148 of the Income Tax Act, 1961 to a Corporate Debtor, calling upon it to submit a return in the prescribed form for the assessment year falling prior to the date of approval of Resolution Plan under IBC on the ground that Assessing Officer had a reason to believe that the income chargeable to tax of the Corporate Debtor has escaped assessment within the meaning of Section 147 of the Income Tax Act, 1961.
  • ADARSH JHUNJHUNJWALA VS. STATE BANK OF INDIA & ANR. – HIGH COURT OF CALCUTTA WPO 1548 OF 2021, ORDER DATED 24.12.2021, Hon’ble High Court of Calcutta held that the principles applied in Corporate Insolvency cannot be applied to Personal Insolvency. Recovery proceedings or proceedings under Section 96 of the IBC, 2016 would not absolve the borrower who has been found to be a willful defaulter.
  • FERRO ALLOYS CORPORATION LTD. VS. STATE OF ODISHA & ORS. – HIGH COURT OF ODISHA WRIT PETITION (CIVIL) NO. 20286 OF 2020, ORDER DATED 10.12.2021, Hon’ble High Court of Odisha held that, in terms of Section 31 of the IBC, the Approved Resolution Plan is binding on all creditors including Central Government and the State Government. Since all of the impugned demands in the instant case pertain to the period prior to the Plan Effective date, all such demands stand automatically extinguished in terms of the ARP.

• National Company Law Appellate Tribunal (“NCLAT”)

  • AXIS BANK LTD. VS. VALUE INFRACON INDIA PVT. LTD. – NCLAT NEW DELHI, I.A. NO. 1502 OF 2020 & I.A. NO. 1503 OF 2020, COMPANY APPEAL (AT) (INSOLVENCY) NO. 582 OF 2020, ORDER DATED 20.12.2021, Hon’ble NCLAT held that Bank cannot be considered as a Financial Creditor on account of its having sanctioned housing loans to some of the allottees who have purchased Flats/units in the Project floated by the Corporate Debtor
  • PRASHANTH HEGDE SUSPENDED MANAGING DIRECTOR, METAL CLOSURES PVT. LTD. VS. STATE BANK OF INDIA, COMPANY APPEAL (AT) (INS) NO. 68 OF 2019 & I.A. NO. 1078 OF 2021, ORDER DATED 23.12.2021, Hon’ble NCLAT held that Criminal complaints filed against officials of consortium of banks, and further action thereon have no bearing or relevance to the proceedings under section 7 of the IBC.
  • COTTON CASUALS (INDIA) PVT. LTD. VS. KANCHAN DUTTA, LIQUIDATOR OF ENFIELD APPARELS LTD., COMPANY APPEAL (AT) (INSOLVENCY) NO. 206 OF 2021 WITH CONTEMPT CASE (AT) NO. 17 OF 2021 IN COMPANY APPEAL (AT) (INSOLVENCY) NO. 206 OF 2021, ORDER DATED 17.12.2021 Hon’ble NCLAT held that sale by a Liquidator under the IBC is a sale on behalf of the Corporate Debtor and transfer fee in respect of transfer made by Liquidator of the lessee assets is liable to be paid and transferee cannot absolve himself from payment of liability to pay transfer fee.
  • BSE LTD. VS. KCCL PLASTIC LTD, COMPANY APPEAL (AT) (INSOLVENCY) NO. 134 OF 2021, ORDER DATED 17.12.2021, Hon’ble NCLAT held that Listing Fees are not operational dues but regulatory dues and regulatory dues are not to be recovered under Operational Debt.
  • KRRISH REALTECH PRIVATE LIMITED COMPANY APPEAL (AT) (INSOLVENCY) NOS. 1008, 1009 & 1010 OF 2021, ORDER DATED 21.12.2021, Hon’ble NCLAT held that the Adjudicating Authority while considering Application of pre-packaged insolvency under Section 54C of the ‘I&B Code’ can, before admission of the Application, hear Objectors / Interveners.

• National Company Law Tribunal (“NCLT”)

  • PUNJAB NATIONAL BANK VS. MR. HARSHAD S DESHPANDE, RP – NCLT MUMBAI BENCH I.A. 1990 OF 2021 & I.A. 2440 OF 2021 IN C.P. (IB) 2390/ MB/2019, ORDER DATED 01.12.2021, Hon’ble NCLT, Mumbai Bench held that the mandate with requirement of obtaining 90% approval of CoC’s votes under Section 12A of IBC is not required if an application for withdrawal have already being filed before the constitution of CoC.
  • UNION BANK OF INDIA VS. MS. VANDANA GARG (ERSTWHILE RP/ MONITORING COMMITTEE CHAIRPERSON OF JYOTI STRUCTURES LTD.), IAS 2025, 2028 AND 2035 OF 2021 IN CP(IB)-1137/ MB/2017, ORDER DATED 23.12.2021, Hon’ble NCLT, Mumbai Bench held that any increase in the claim amount of the Assenting Financial Creditors due to the invocation of a Bank Guarantee cannot be a ground for challenge by the Dissenting Financial Creditors on discrimination basis.
  • GVFL TRUSTEE COMPANY PVT. LTD. VS. HUBTOWN LTD., MA 2412/2019 IN CP(IB)-4129/2018, ORDER DATED 30.11.2021, Hon’ble NCLT, Mumbai Bench held that share purchase with exit option/ Annual Put Option cannot be considered as a debt which is disbursed against consideration of time value for money.
  • WITTUR ELEVATOR COMPONENTS INDIA PVT. LTD. VS. AXIOMATA ELEVATORS PVT. LTD., REPORT/28/2020, MA/15/KOB/2020, MA/143/KOB/2020 & MA/144/KOB/2020 IN TIBA/34/ KOB/2019, ORDER DATED 21.12.2021, Hon’ble NCLT, Kochi bench held that Section 17 of the Code can be interpreted as suspension of powers of the board of directors and not their duties & responsibilities, the Board is fastened with the responsibility of running & managing the company’s affairs.
  • SEAVIEW MERCHANTS PVT. LTD. VS. ASHISH VINCOM PVT. LTD., C.P (IB) NO. 2011/KB/2019, ORDER DATED 15.12.2021, Hon’ble NCLT, Kolkata bench held that inter-Corporate Deposits are financial debts but in a transaction of a deposit of money or a loan, a relationship between the parties must come into existence, mere transfer of money from one account to another would not constitute loan/deposits unless the intention of the parties are considered and substantiated with valid documents.