Relevant Judgments

• Supreme Court

• State Bank of India Vs. Moser Baer Karamachari Union & Anr. CIVIL APPEAL NO.258 & 2520 OF 2020 date: 07.02.2023; The Hon’ble Supreme Court in the said matter upheld the order dated 19.03.2022 passed by Hon’ble NCLT that provident fund dues, pension funds and gratuity fund dues are not treated as a part of the liquidation estate and would not, therefore, be recovered under Section 53 of the IBC which provides for waterfall mechanism.

• High Court

• Bharat Heavy Electricals Limited vs. Zillion Infraprojects Pvt. Ltd. FAO (COMM) 66-2021 & CM APPL. 33889- 2020, date: 21.02.2023; The Hon’ble Delhi High Court held that the Arbitral Tribunal has the power under Section 31(6) of the Arbitration and Conciliation Act, 1996 to pass an interim award on the basis of the admissions made by an Operational Creditor before the Interim Resolution Professional in the CIRP proceedings initiated under the Insolvency and Bankruptcy Code, 2016 (IBC) against the Corporate Debtor.
• Welspun Steel Resources Private Limited R/SPECIAL CIVIL APPLICATION NO. 19387 of 2022, date: 17.02.2023; The Hon’ble Gujarat High Court held that the PMLA authorities cannot be given a free hand to pass orders of attachment of properties which were acquired by a successful bidder in a liquidation process, on a presumption that such acquisition was as a result of a criminal activity and the same could be contrary to the interest of value maximization of the Corporate Debtor’s assets by substantially reducing the chances of finding a willing Resolution Applicant or a bidder in liquidation.
• Sree Metaliks Limited vs. Additional Director General and Ors. W.P.(C) No.3119-2021 & CM APPL. 9461-2021 date:16.02.2023; The Hon’ble Delhi High Court held that once a Public Announcement was made, wherein it was incumbent upon all creditors, which included the statutory creditors, to submit the proof of claim. The Hon’ble High Court was further of the view that after Public Announcement was made the statutory authorities chose not to submit their proof of claim and thereafter issued show cause notice. Therefore, such notices are liable to be quashed.
• Biotor Industries Limited (In Liquidation) Represented by Liquidator Mr. Sanjay Kumar Agarwal vs. Gujarat Industrial Development Corporation R/ SPECIAL CIVIL APPLICATION NO. 3688 of 2022,date: 13.02.2023; The Hon’ble Gujarat High Court held that the residuary jurisdiction of NCLT under Section 60(5) (c) of the IBC provides a wide discretion to adjudicate questions of law or fact arising from or in relation to the Insolvency Resolution proceedings.

• National Company Law Appellate Tribunal (NCLAT)

• Priyal Kantilal Patel Versus IREP Credit Capital Pvt. Ltd. & Anr in Company Appeal (AT) (Insolvency) No. 1423 of 2022, date 01.02.2023; The Hon’ble NCLAT has held that the nature of Financial Debt would not change on account of breach of the consent terms. Further, the Hon’ble bench directed to continue the CIRP against a Corporate Debtor upon a subsequent initiation of CIRP under Section 7 initiated by Financial Creditor which was filed after the Corporate Debtor breached the consent terms entered in the earlier Section 7 petition.
• C.G. Vijyalakshmi & Ors. vs. Shri Kumar Rajan, Resolution Professional & Ors. IA No.251-2021 in Company Appeal (AT) (CH) (Ins.) No. 29 of 2021 date, 08.02.2023; The Hon’ble NCLAT held that the Provident Fund and Gratuity dues must be paid in full to the workmen/ employees till commencement of the CIRP of Corporate Debtor. The Hon’ble Bench was of the view that the approved Resolution Plan violated Section 30(2) of IBC, by paying only 35.13% of the PF and Gratuity dues.
• Rourkela Steel Syndicate Versus Metistech Fabricators Pvt. Ltd. in Company Appeal (AT)(Insolvency) No. 924 of 2022 date: 09.02.2023; The Hon’ble NCLAT held that an application under Section 9 of IBC is not a suit and hence, the bar under Section 69(2) of Indian Partnership Act, 1932 is not applicable to Section 9 of the Code.
• Principal Commissioner of Income Tax, Vs M/s Assam Company India Ltd in Company Appeal (AT) (Insolvency) No. 243 of 2022, date: 07.02.2023; The Hon’ble NCLAT held that the dues of the Income Tax department are Government dues and Income Tax Authorities are a Secured Creditor.
• Shri Guru Containers vs. Jitendra Palande Company Appeal (AT) (Insolvency) No.106 of 2023, date: 22.02.2023; The Hon’ble NCLAT held that creditors must not shift the entire blame on the IRP on grounds of non-performance of duty and make him the scapegoat. It is equally important for the creditors to play a catalytic role in the insolvency resolution process given the creditor-driven regime of IBC. The rigours of similar standards of discipline should also apply on the creditors.