Relevant Judgments

• High Court

• Axis Trustee Services Ltd. Vs. Brij Bhushan Singal & Anr, in CS (Comm)-08 of 2021-HCCS (Comm)-20 of 2021, date; 04.11.2022: The Hon’ble High Court held that the effect of the interim moratorium under Section 96 of IBC is only with respect of the debts of a particular debtor and by no stretch of imagination can it be said to include other independent guarantors in respect of the same debt of a Corporate Debtor. Merely because an interim moratorium under Section 96 is operable in respect of one of the coguarantors, the same would not apply to the other co-guarantor(s).
• Rajiv Chakraborty RP of EIFL Vs. Directorate of Enforcement in W.P (C) 9531/2020,CM APPL.30578/2020 date: 11.11.2022; The Hon’ble High Court held that the Enforcement Directorate’s power to attach properties under the Prevention of Money Laundering Act will not be affected by the moratorium which comes into effect in terms of Section 14 of the Insolvency and Bankruptcy Code. The Hon’ble Court held that PMLA is not concerned with the recovery or enforcement of a debt. The Hon’ble Court was of the view that the claims of parties over the property that may be attached and the question of distribution and priorities would have to be settled independently and in accordance with law. Section 14 of the IBC cannot be read as completely shutting out actions under Section 5 and 8 of PMLA. The authorities under PMLA would cease to have power to attach or confiscate only when a Resolution Plan had been approved or where a measure towards liquidation had been adopted.
• Insolvency and Bankruptcy Board of India Vs. State Bank of India in W.P.(C) 10189/2018, date: 28.11.2022; The Hon’ble High Court held that Ld. NCLT does not have the power to declare Regulation 36A of IBBI (Insolvency Resolution Process for Corporate Persons) 2016 which has been amended and passed in accordance with law by the IBBI as ultra vires merely on the ground that the two stage process provided in it, would be contrary to the speedier resolution of the Insolvency Resolution Process.

• National Company Law Appellate Tribunal (NCLAT)

• Avneet Goyal Vs. Radha Kishan Gobind Ram Ltd., in Company Appeal (AT) (Insolvency) No.1388 of 2022 & I.A. No. 4329 of 2022 date: 22.11.2022; The Hon’ble NCLAT held that during the proceeding of Corporate Insolvency Resolution Process initiated against the Corporate Debtor under Section 9 of IBC, the Hon’ble Tribunal need not enter into evidence and record findings like a Civil Court.
• Shaikh Mohammad Tariq Vs. Aegis Forging Ltd.,Company Appeal(AT)(Ins) No.1342 of 2022 date 15.11.2022; The Hon’ble NCLAT held that when there is already an arbitral award that has already been put in execution by the Financial Creditor then the Corporate Insolvency Resolution Process cannot be initiated against the Corporate Debtor under section 7 IBC.
• A ‘XYKno Capital Services Pvt. Ltd. Vs. Rattan India Power Ltd., in Company Appeal(AT)(Ins) No.913 of 2022, date 10.11.2022; The Hon’ble NCLAT held that the disputes arising out of contractual issues are not to be resolved by initiating Corporate Insolvency Resolution Process under Section 9 of the IBC.
• Chipsan Aviation Pvt. Ltd. Vs. Punj Llyod Aviation Ltd., in Company Appeal (AT) (Insolvency) No. 261 of 2022 , date : 10.11.2022; The Hon’ble NCLAT held that an advance paid towards a service falls within the definition of Operational Debt under Section 5(21) of the Code, even if there was no privity of contract between the Parties.

• National Company Law Tribunal (NCLT)

• Neha Jain Vs Venessa Metals & Alloys Private Limited in Company Petition No. (IB)-2970(ND)2019 date 16.11.2022; The Hon’ble NCLT held that the proceedings initiated against the Corporate Debtor for preferential transaction, Avoidance of undervalued transaction and Fraudulent or wrongful trading under Section 43,45 and 66 of IBC shall be continued even after initiation of the liquidation proceedings. Further, it was observed that any asset or their value recovered through such proceeding for avoidance of transaction are part of the liquidation estate.
• State Bank of India Vs. Dunar Foods Ltd. in CP/IB/MB/No. 1138 of 2017 date: 11.11.2022; The Hon’ble NCLT held that all the liability of the Corporate Debtor which are prior to CIRP and prior to approval of the Resolution Plan and before transfer of the assets of the Corporate Debtor to the Resolution Applicant shall stand extinguished and therefore, the Successful Resolution Applicant is eligible to have encumbrance free transfer of the assets of the Corporate Debtor after the approval of the Resolution Plan.
• Andhra Bank Vs Sterling Biotech Limited in IA No. 1585/MB/2022 in CP (IB) No. 490/MB/2018, date: 11.11.2022; The Hon’ble NCLT held that the cancellation and extinguishment of existing share capital of the Corporate Debtor, issuance and allotment of shares to the Acquirers and filing intimation to the Stock Exchange and other Government Authorities are essential for transfer of Corporate Debtor as a going concern, as the successful bidder is entitled to take over and run the Corporate Debtor on a clean slate basis.
• Allahabad Bank Vs Sai Infosystem (India) Ltd in IA No. 157/AHM/2022 IN CP (IB) 164/AHM/2017, date: 09.11.2022 The Hon’ble NCLT held that the State Tax Department be considered as secured Financial Creditor while distributing proceeds in terms of Section 53 of the Code.