Important IBC Judgments by the NCLAT (8 July 2021)

  July 11, 2021

Delhi Bench

Section 18 of the Limitation Act is Applicable to IBC Proceedings: Kamlesh Govind Pansuriya v. Bank of India

 An application u/s. 7 of the Code was filed by the Respondent/Financial Creditor. The date of default was mentioned as 07.06.2016.

The Appellant argued that 07.06.2016 was the date on which the account was declared NPA and that the date of default was 30.01.2016. The primary argument was that the date of default and the date of NPA declaration are not pari materia and therefore, the application filed by the Respondent/Financial Creditor was barred by limitation.

The Appellant alleged forgery of the signatures of its erstwhile directors in a letter of acknowledgement dated 19.11.2018, and had made a written police complaint to that effect. On the other hand, the Respondent relied on Gaurav Hargovindbhai Dave v. Asset Reconstruction Company (India) Ltd. (2019) 10 SCC 572, wherein the Supreme Court held the date of default is the date of NPA. They also relied on Bishal Jaiswal v. Asset Reconstruction Company (India) Limited (2021) 224 CompCas 166 on the applicability of Section 18 of the Limitation Act to the Code.

The Appellate Tribunal affirmed that there existed a clear acknowledgement and did not find strength in the arguments of the Appellant to interfere in the order of the Adjudicating Authority.

 

A CoC Consisting of Homebuyers is Distinct: Lotus City Plot Buyers Welfare Association v. Three C Homes Pvt. Ltd. & Ors.

The appeal was against the order of the Adjudicating Authority rejecting the resolution plan, and clearing the way for liquidation. The Adjudicating Authority considered that the infusion of Rs. 95 crores through the resolution plan was too low in comparison with the liquidation value of Rs. 480.70 crores.  It also felt that the resolution plan was inconsistent with the IBBI (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2020. The Appellant argued that Rs. 95 crores was exclusive of other calculations such as settlement to the ex-management, waiver of interest, the satisfaction of a debt due to allottees etc. The Respondents alleged that the operational creditors were not given priority as per Reg. 38 of the CIRP Regulations. They also alleged that the Resolution Applicant was acquiring the CD at 1/5th of the liquidation value, and supported the impugned order. The Appellate Tribunal noted the clear distinction between a CoC where financial creditors are members, and a CoC with homebuyers in real estate projects, the latter having a lack of commercial expertise. The homebuyers were also in dire need of homes. The matter was remanded back to the Adjudicating Authority.

~ By Manikanda Prabhu J

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