Case Digest on Insolvency and Bankruptcy Code, 2016 by Bloomsbury India Professional

Contents at a glance About the author. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Table of contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxi Table of cases – section-wise, topic-wise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . lxix Table of cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . clxix PART I

PRELIMINARY Section 1

Short title, extent and commencement. . . . . . . . . . . . . . . . . . . 1

Section 2 Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Section 3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 PART II

INSOLVENCY RESOLUTION AND LIQUIDATION FOR CORPORATE PERSONS CHAPTER I

PRELIMINARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Section 4

Application of this Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

CHAPTER II CORPORATE INSOLVENCY RESOLUTION PROCESS. . . . . . . . . . . . 19 Section 5 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 6

Persons who may initiate corporate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Section 7

Initiation of corporate insolvency resolution process by financial creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Section 8

Insolvency resolution by operational creditor. . . . . . . . . . . 124

Section 9

Application for initiation of corporate insolvency resolution process by operational creditor. . . . . . . . . . . . . . 145

Section 10

Initiation of corporate insolvency resolution process by corporate applicant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189

Section 11

Persons not entitled to make application . . . . . . . . . . . . . . . 212

Section 12

Time-limit for completion of insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217

Section 12A Withdrawal of application under section 7, 9 or 10. . . . . . . 224

Section 13

Declaration of moratorium and public announcement . . . 225

Section 14 Moratorium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 Section 15

Public announcement of corporate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248

Section 16

Appointment and tenure of interim resolution professional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250

Section 17

Management of affairs of corporate debtor by interim resolution professional . . . . . . . . . . . . . . . . . . . . . . . 256

Section 18

Duties of interim resolution professional. . . . . . . . . . . . . . . 257

Section 19

Personnel to extend co-operation to interim resolution professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262

Section 20

Management of operations of corporate debtor as going concern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266

Section 21

Committee of creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267

Section 22

Appointment of resolution professional. . . . . . . . . . . . . . . . 271

Section 23

Resolution professional to conduct corporate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . 276

Section 24

Meeting of committee of creditors. . . . . . . . . . . . . . . . . . . . . 278

Section 25

Duties of resolution professional. . . . . . . . . . . . . . . . . . . . . . 281

Section 25A Rights and duties of authorized representative of ﬁnancial creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283 Section 26

Application for avoidance of transactions not to affect proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284

Section 27

Replacement of resolution professional by committee of creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284

Section 28

Approval of committee of creditors for certain actions. . . . 287

Section 29

Preparation of information memorandum. . . . . . . . . . . . . . 289

Section 29A Persons not eligible to be resolution applicant.. . . . . . . . . . 289 Section 30

Submission of resolution plan . . . . . . . . . . . . . . . . . . . . . . . . 303

Section 31

Approval of resolution plan . . . . . . . . . . . . . . . . . . . . . . . . . . 311

Section 32 Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 CHAPTER III LIQUIDATION PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320 Section 33

Initiation of liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320

Section 34

Appointment of liquidator and fee to be paid. . . . . . . . . . . 328

Section 35

Powers and duties of liquidator . . . . . . . . . . . . . . . . . . . . . . . 333

Contents at a glance

Section 36

Liquidation estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337

Section 37

Powers of liquidator to access information. . . . . . . . . . . . . . 340

Section 38

Consolidation of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340

Section 39

Verification of claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341

Section 40

Admission or rejection of claims . . . . . . . . . . . . . . . . . . . . . . 341

Section 41

Determination of valuation of claims . . . . . . . . . . . . . . . . . . 342

Section 42

Appeal against the decision of liquidator. . . . . . . . . . . . . . . 342

Section 43

Preferential transactions and relevant time . . . . . . . . . . . . . 343

Section 44

Orders in case of preferential transactions. . . . . . . . . . . . . . 345

Section 45

Avoidance of undervalued transactions . . . . . . . . . . . . . . . . 346

Section 46

Relevant period for avoidable transactions. . . . . . . . . . . . . . 347

Section 47

Application by creditor in cases of undervalued transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348

Section 48

Order in cases of undervalued transactions . . . . . . . . . . . . . 348

Section 49

Transactions defrauding creditors . . . . . . . . . . . . . . . . . . . . . 349

Section 50

Extortionate credit transactions. . . . . . . . . . . . . . . . . . . . . . . 350

Section 51

Orders of Adjudicating Authority in respect of extortionate credit transactions . . . . . . . . . . . . . . . . . . . . . . . 350

Section 52

Secured creditor in liquidation proceedings . . . . . . . . . . . . 351

Section 53

Distribution of assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353

Section 54

Dissolution of corporate debtor. . . . . . . . . . . . . . . . . . . . . . . 357

CHAPTER IV FAST TRACK CORPORATE INSOLVENCY RESOLUTION PROCESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358 Section 55

Fast track corporation insolvency resolution process. . . . . 358

Section 56

Time period for completion of fast track corporate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . 359

Section 57

Manner of initiating fast track corporate insolvency resolution process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359

Section 58

Applicability of Chapter II to this Chapter. . . . . . . . . . . . . . 360

CHAPTER V VOLUNTARY LIQUIDATION OF CORPORATE PERSONS. . . . . . . 361 Section 59

Voluntary liquidation of corporate persons . . . . . . . . . . . . . 361

CHAPTER VI ADJUDICATING AUTHORITY FOR CORPORATE PERSONS. . . . 364 Section 60

Adjudicating Authority for corporate persons. . . . . . . . . . . 364

Section 61

Appeals and Appellate Authority. . . . . . . . . . . . . . . . . . . . . . 370 xi

Case Digest on Insolvency and Bankruptcy Code, 2016

Section 62

Appeal to Supreme Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . 379

Section 63

Civil court not to have jurisdiction. . . . . . . . . . . . . . . . . . . . . 379

Section 64

Expeditious disposal of applications. . . . . . . . . . . . . . . . . . . 380

Section 65

Fraudulent or malicious initiation of proceedings. . . . . . . . 384

Section 66

Fraudulent trading or wrongful trading . . . . . . . . . . . . . . . . 388

Section 67

Proceedings under section 66. . . . . . . . . . . . . . . . . . . . . . . . . 390

CHAPTER VII OFFENCES AND PENALTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393 Section 68

Punishment for concealment of property. . . . . . . . . . . . . . . 393

Section 69

Punishment for transactions defrauding creditors . . . . . . . 394

Section 70

Punishment for misconduct in course of corporate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . 395

Section 71

Punishment for falsification of books of corporate debtor. 396

Section 72

Punishment for wilful and material omissions from statements relating to affairs of corporate debtor . . . . . . . . 396

Section 73

Punishment for false representations to creditors. . . . . . . . 397

Section 74

Punishment for contravention of moratorium or the resolution plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397

Section 75

Punishment for false information furnished in application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398

Section 76

Punishment for nondisclosure of dispute or payment of debt by operational creditor. . . . . . . . . . . . . . . . 398

Section 77

Punishment for providing false information in application made by corporate debtor. . . . . . . . . . . . . . . . . . 399 PART III

INSOLVENCY RESOLUTION AND BANKRUPTCY FOR INDIVIDUALS AND PARTNERSHIP FIRMS CHAPTER I

PRELIMINARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401

Section 78 Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401 Section 79 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401 CHAPTER II FRESH START PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405 Section 80

Eligibility for making an application. . . . . . . . . . . . . . . . . . . 405

Section 81

Application for fresh start order. . . . . . . . . . . . . . . . . . . . . . . 405

Section 82

Appointment of resolution professional. . . . . . . . . . . . . . . . 406

Section 83

Examination of application by resolution professional . . . 407 xii

Contents at a glance

Section 84

Admission or rejection of application by Adjudicating Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408

Section 85

Effect of admission of application . . . . . . . . . . . . . . . . . . . . . 409

Section 86

Objections by creditor and their examination by resolution professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410

Section 87

Application against decision of resolution professional. . . 411

Section 88

General duties of debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411

Section 89

Replacement of resolution professional. . . . . . . . . . . . . . . . 412

Section 90

Directions for compliances of restrictions, etc. . . . . . . . . . . 412

Section 91

Revocation of order admitting application. . . . . . . . . . . . . . 413

Section 92

Discharge order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413

Section 93

Standard of conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414

CHAPTER III INSOLVENCY RESOLUTION PROCESS. . . . . . . . . . . . . . . . . . . . . . . . 415 Section 94

Application by debtor to initiate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415

Section 95

Application by creditor to initiate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415

Section 96 Interim-moratorium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416 Section 97

Appointment of resolution professional. . . . . . . . . . . . . . . . 418

Section 98

Replacement of resolution professional. . . . . . . . . . . . . . . . 419

Section 99

Submission of report by resolution professional. . . . . . . . . 420

Section 100 Admission or rejection of application. . . . . . . . . . . . . . . . . . 421 Section 101 Moratorium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 Section 102 Public notice and claims from creditors . . . . . . . . . . . . . . . . 423 Section 103 Registering of claims by creditors . . . . . . . . . . . . . . . . . . . . . 424 Section 104 Preparation of list of creditors. . . . . . . . . . . . . . . . . . . . . . . . . 424 Section 105 Repayment plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424 Section 106 Report of resolution professional on repayment plan. . . . 425 Section 107 Summoning of meeting of creditors . . . . . . . . . . . . . . . . . . . 426 Section 108 Conduct of meeting of creditors. . . . . . . . . . . . . . . . . . . . . . . 426 Section 109 Voting rights in meeting of creditors. . . . . . . . . . . . . . . . . . . 427 Section 110 Rights of secured creditors in relation to repayment plan. 427 Section 111 Approval of repayment plan by creditors. . . . . . . . . . . . . . . 428 Section 112 Report of meeting of creditors on repayment plan. . . . . . . 428 xiii

Case Digest on Insolvency and Bankruptcy Code, 2016

Section 113 Notice of decisions taken at meeting of creditors . . . . . . . . 429 Section 114 Order of Adjudicating Authority on repayment plan. . . . . 429 Section 115 Effect of order of Adjudicating Authority on repayment plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429 Section 116 Implementation and supervision of repayment plan . . . . . 430 Section 117 Completion of repayment plan. . . . . . . . . . . . . . . . . . . . . . . . 430 Section 118 Repayment plan coming to end prematurely. . . . . . . . . . . . 431 Section 119 Discharge order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431 Section 120 Standard of conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432 CHAPTER IV BANKRUPTCY ORDER FOR INDIVIDUALS AND PARTNERSHIP FIRMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Section 121 Application for bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Section 122 Application by debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Section 123 Application by creditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434 Section 124 Effect of application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435 Section 125 Appointment of insolvency professional as bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436 Section 126 Bankruptcy order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436 Section 127 Validity of bankruptcy order. . . . . . . . . . . . . . . . . . . . . . . . . . 437 Section 128 Effect of bankruptcy order. . . . . . . . . . . . . . . . . . . . . . . . . . . . 437 Section 129 Statement of financial position. . . . . . . . . . . . . . . . . . . . . . . . 438 Section 130 Public notice inviting claims from creditors. . . . . . . . . . . . . 438 Section 131 Registration of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 439 Section 132 Preparation of list of creditors. . . . . . . . . . . . . . . . . . . . . . . . . 439 Section 133 Summoning of meeting of creditors . . . . . . . . . . . . . . . . . . . 439 Section 134 Conduct of meeting of creditors. . . . . . . . . . . . . . . . . . . . . . . 440 Section 135 Voting rights of creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440 Section 136 Administration and distribution of estate of bankrupt. . . . 441 Section 137 Completion of administration . . . . . . . . . . . . . . . . . . . . . . . . 441 Section 138 Discharge order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441 Section 139 Effect of discharge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 Section 140 Disqualification of bankrupt. . . . . . . . . . . . . . . . . . . . . . . . . . 442 Section 141 Restrictions on bankrupt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443 Section 142 Modification or recall of bankruptcy order. . . . . . . . . . . . . . 444 xiv

Contents at a glance

Section 143 Standard of conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 Section 144 Fees of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 445 Section 145 Replacement of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . 445 Section 146 Resignation by bankruptcy trustee . . . . . . . . . . . . . . . . . . . . 446 Section 147 Vacancy in office of bankruptcy trustee. . . . . . . . . . . . . . . . . 447 Section 148 Release of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . 448 CHAPTER V ADMINISTRATION AND DISTRIBUTION OF THE ESTATE OF THE BANKRUPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449 Section 149 Functions of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . 449 Section 150 Duties of bankrupt towards bankruptcy trustee . . . . . . . . . 449 Section 151 Rights of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . 450 Section 152 General powers of bankruptcy trustee . . . . . . . . . . . . . . . . . 450 Section 153 Approval of creditors for certain acts. . . . . . . . . . . . . . . . . . . 451 Section 154 Vesting of estate of bankrupt in bankruptcy trustee. . . . . . 452 Section 155 Estate of bankrupt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 Section 156 Delivery of property and documents to bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 Section 157 Acquisition of control by bankruptcy trustee. . . . . . . . . . . . 453 Section 158 Restrictions on disposition of property. . . . . . . . . . . . . . . . . 453 Section 159 After-acquired property of bankrupt. . . . . . . . . . . . . . . . . . . 453 Section 160 Onerous property of bankrupt. . . . . . . . . . . . . . . . . . . . . . . . 454 Section 161 Notice to disclaim onerous property. . . . . . . . . . . . . . . . . . . 455 Section 162 Disclaimer of leaseholds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 Section 163 Challenge against disclaimed property. . . . . . . . . . . . . . . . . 456 Section 164 Undervalued transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 457 Section 165 Preference transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458 Section 166 Effect of order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459 Section 167 Extortionate credit transactions. . . . . . . . . . . . . . . . . . . . . . . 460 Section 168 Obligations under contracts. . . . . . . . . . . . . . . . . . . . . . . . . . 461 Section 169 Continuance of proceedings on death of bankrupt. . . . . . . 461 Section 170 Administration of estate of deceased bankrupt. . . . . . . . . . 462 Section 171 Proof of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462 Section 172 Proof of debt by secured creditors. . . . . . . . . . . . . . . . . . . . . 463 Section 173 Mutual credit and set-off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463 xv

Case Digest on Insolvency and Bankruptcy Code, 2016

Section 174 Distribution of interim dividend . . . . . . . . . . . . . . . . . . . . . . 464 Section 175 Distribution of property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464 Section 176 Final dividend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465 Section 177 Claims of creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 Section 178 Priority of payment of debts. . . . . . . . . . . . . . . . . . . . . . . . . . 467 CHAPTER VI ADJUDICATING AUTHORITY FOR INDIVIDUALS AND PARTNERSHIP FIRMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 Section 179 Adjudicating Authority for individuals and partnership firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 Section 180 Civil court not to have jurisdiction. . . . . . . . . . . . . . . . . . . . . 469 Section 181 Appeal to Debt Recovery Appellate Tribunal. . . . . . . . . . . . 470 Section 182 Appeal to Supreme Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . 470 Section 183 Expeditious disposal of applications. . . . . . . . . . . . . . . . . . . 470 CHAPTER VII OFFENCES AND PENALTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 Section 184 Punishment for false information, etc., by creditor in insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . 471 Section 185 Punishment for contravention of provisions . . . . . . . . . . . . 471 Section 186 Punishment for false information, concealment, etc., by bankrupt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 Section 187 Punishment for certain actions. . . . . . . . . . . . . . . . . . . . . . . . 473 PART IV

REGULATION OF INSOLVENCY PROFESSIONALS, AGENCIES AND INFORMATION UTILITIES CHAPTER I

THE INSOLVENCY AND BANKRUPTCY BOARD OF INDIA. . . . . 475

Section 188 Establishment and incorporation of Board. . . . . . . . . . . . . . 475 Section 189 Constitution of Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476 Section 190 Removal of member from office. . . . . . . . . . . . . . . . . . . . . . . 477 Section 191 Powers of Chairperson. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 477 Section 192 Meetings of Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 478 Section 193 Member not to participate in meetings in certain cases. . . 478 Section 194 Vacancies, etc., not to invalidate proceedings of Board, Officers and employees of Board. . . . . . . . . . . . . . . . 478 Section 195 Power to designate financial sector regulator. . . . . . . . . . . . 479 xvi

Contents at a glance

CHAPTER II POWERS AND FUNCTIONS OF THE BOARD. . . . . . . . . . . . . . . . . . 480 Section 196 Powers and functions of Board. . . . . . . . . . . . . . . . . . . . . . . . 480 Section 197 Constitution of advisory committee, executive committee or other committee. . . . . . . . . . . . . . . . . . . . . . . . 484 Section 198 Condonation of delay. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 484 CHAPTER III INSOLVENCY PROFESSIONAL AGENCIES . . . . . . . . . . . . . . . . . . . . 485 Section 199 No person to function as insolvency professional agency without valid certificate of registration.. . . . . . . . . . 485 Section 200 Principles governing registration of insolvency professional agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 485 Section 201 Registration of insolvency professional agency. . . . . . . . . . 486 Section 202 Appeal to National Company Law Appellate Tribunal. . . . 487 Section 203 Governing Board of insolvency professional agency. . . . . . 487 Section 204 Functions of insolvency professional agencies. . . . . . . . . . . 487 Section 205 Insolvency professional agencies to make bye-laws . . . . . . 488 CHAPTER IV INSOLVENCY PROFESSIONALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489 Section 206 Enrolled and registered persons to act as insolvency professionals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489 Section 207 Registration of insolvency professionals. . . . . . . . . . . . . . . . 489 Section 208 Functions and obligations of insolvency professionals. . . . 493 CHAPTER V INFORMATION UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495 Section 209 No person to function as information utility without certificate of registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495 Section 210 Registration of information utility. . . . . . . . . . . . . . . . . . . . . 495 Section 211 Appeal to National Company Law Appellate Tribunal. . . . 496 Section 212 Governing Board of information utility. . . . . . . . . . . . . . . . . 496 Section 213 Core services, etc., of information utilities. . . . . . . . . . . . . . 497 Section 214 Obligations of information utility . . . . . . . . . . . . . . . . . . . . . 497 Section 215 Procedure for submission, etc., of financial information . . 498 Section 216 Rights and obligations of persons submitting financial information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498

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CHAPTER V INSPECTION AND INVESTIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . 499 Section 217 Complaints against insolvency professional agency or its member or information utility. . . . . . . . . . . . . . . . . . . 499 Section 218 Investigation of insolvency professional agency or its member or information utility . . . . . . . . . . . . . . . . . . . . . 499 Section 219 Show cause notice to insolvency professional agency or its member or information utility . . . . . . . . . . . . 500 Section 220 Appointment of disciplinary committee. . . . . . . . . . . . . . . . 501 CHAPTER VII FINANCE, ACCOUNTS AND AUDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . 503 Section 221 Grants by Central Government . . . . . . . . . . . . . . . . . . . . . . . 503 Section 222 Board’s Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503 Section 223 Accounts and audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504 PART V

MISCELLENEOUS Section 224 Insolvency and Bankruptcy Fund. . . . . . . . . . . . . . . . . . . . . . 505 Section 225 Power of Central Government to issue directions. . . . . . . . 506 Section 226 Power of Central Government to supersede Board. . . . . . . 506 Section 227 Power of Central Government to notify financial service providers, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507 Section 228 Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508 Section 229 Annual report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508 Section 230 Delegation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508 Section 231 Bar of jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508 Section 232 Members, officers and employees of Board to the public servants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509 Section 233 Protection of action taken in good faith . . . . . . . . . . . . . . . . 509 Section 234 Agreements with foreign countries. . . . . . . . . . . . . . . . . . . . 510 Section 235 Letter of request to a country outside India in certain cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 510 Section 235A Punishment where no specific penalty or punishment is provided. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511 Section 236 Trial of offences by Special Court. . . . . . . . . . . . . . . . . . . . . . 511 Section 237 Appeal and revision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512 Section 238 Provisions of this Code to override other laws . . . . . . . . . . 512 xviii

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Section 238A Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516 Section 239 Power to make rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517 Section 240 Power to make regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . 520 Section 240A Application of this Code to micro, small and medium enterprises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 528 Section 241 Rules and regulations to be laid before Parliament. . . . . . . 529 Section 242 Power to remove difficulties. . . . . . . . . . . . . . . . . . . . . . . . . . 529 Section 243 Repeal of certain enactments and savings. . . . . . . . . . . . . . . 531 Section 244 Transitional provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533 Section 245 Amendments of Act 9 of 1932 . . . . . . . . . . . . . . . . . . . . . . . . 533 Section 246 Amendments of Act 1 of 1944 . . . . . . . . . . . . . . . . . . . . . . . . 534 Section 247 Amendments of Act 43 of 1961 . . . . . . . . . . . . . . . . . . . . . . . 534 Section 248 Amendments of Act 52 of 1962 . . . . . . . . . . . . . . . . . . . . . . . 534 Section 249 Amendments of Act 51 of 1993 . . . . . . . . . . . . . . . . . . . . . . . 534 Section 250 Amendments of Act 32 of 1994 . . . . . . . . . . . . . . . . . . . . . . . 534 Section 251 Amendments of Act 54 of 2002 . . . . . . . . . . . . . . . . . . . . . . . 535 Section 252 Amendments of Act 1 of 2004 . . . . . . . . . . . . . . . . . . . . . . . . 535 Section 253 Amendments of Act 51 of 2007 . . . . . . . . . . . . . . . . . . . . . . . 544 Section 254 Amendments of Act 6 of 2009 . . . . . . . . . . . . . . . . . . . . . . . . 544 Section 255 Amendment of Act 18 of 2013. . . . . . . . . . . . . . . . . . . . . . . . 544

THE FIRST SCHEDULE AMENDMENT TO THE INDIAN PARTNERSHIP ACT, 1932. . . . . . . . . . 548 THE SECOND SCHEDULE AMENDMENT TO THE CENTRAL EXCISE ACT, 1944 . . . . . . . . . . . . . . . 549 THE THIRD SCHEDULE AMENDMENT TO THE INCOME-TAX ACT, 1961. . . . . . . . . . . . . . . . . . . 549 THE FOURTH SCHEDULE AMENDMENT TO THE CUSTOMS ACT, 1962 . . . . . . . . . . . . . . . . . . . . . 549

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THE FIFTH SCHEDULE AMENDMENT TO THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 . . . . . . . . . . . . . . . . . . . . . . 550 THE SIXTH SCHEDULE AMENDMENT TO THE FINANCE ACT, 1994. . . . . . . . . . . . . . . . . . . . . . . 551 THE SEVENTH SCHEDULE AMENDMENT TO THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002. . . . . . . . . . . . . . . 552 THE EIGHTH SCHEDULE AMENDMENT TO THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) REPEAL ACT, 2003. . . . . . . . . . . . . . . . . . . . . . . 552 THE NINTH SCHEDULE AMENDMENT TO THE PAYMENT AND SETTLEMENT SYSTEMS ACT, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553 THE TENTH SCHEDULE AMENDMENT TO THE LIMITED LIABILITY PARTNERSHIP ACT, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 554 THE ELEVENTH SCHEDULE AMENDMENTS TO THE COMPANIES ACT, 2013. . . . . . . . . . . . . . . . . . . 554 THE TWELFTH SCHEDULE ACTS FOR THE PURPOSES OF CLAUSE (d) OF SECTION 29A . . . . . . . 567

Table of contents About the author. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Contents at a glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Table of cases – section-wise, topic-wise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . lxix Table of cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . clxix PART I

PRELIMINARY Section 1

Short title, extent and commencement. . . . . . . . . . . . . . . . . . . 1

Section 2 Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Section 2(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 –– Section 2(e) would apply only for limited purpose contained in section 60(2) and (3). . . . . . . . . . . . . . . . . . . . . . 2 Section 3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Section 3(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 –– Treatment of Home Buyers under IBC . . . . . . . . . . . . . . . . . . 8 –– Home buyers having agreement with assured return clause treated as financial creditors. . . . . . . . . . . . . . . 8 –– Home buyers without assured returns clause . . . . . . . . . . . . 8 Section 3(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 –– Committed return plan is in the nature of ‘debt’. . . . . . . . . . 9 –– An application under section 9 is not maintainable on the basis of claims for entitlement of interest. . . . . . . . . . 9 –– Part of the dues comes within the meaning of ‘debt’ once it becomes payable. . . . . . . . . . . . . . . . . . . . . . . . 10 Section 3(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 –– Default triggers Insolvency Resolution Process. . . . . . . . . . 10 –– Default takes place when debt becomes due and is not paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 –– Position of Debt kept in Abeyance or Suspended Debt . . . 11 –– The Adjudicating Authority has to merely satisfy itself that a default has occurred, in case of a corporate debtor who commits a default of a financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 xxi

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–– Section 3(12) is in the context of actual nonpayment by the corporate debtor. . . . . . . . . . . . . . . . . . . . . . 12 –– Different claim(s) cannot be clubbed together for alleged default of debt, the cause of action being separate.12 –– Insolvency resolution process begins when a default takes place. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 –– Amount not released due to misunderstanding cannot be treated to be default. . . . . . . . . . . . . . . . . . . . . . . . 15 PART II

INSOLVENCY RESOLUTION AND LIQUIDATION FOR CORPORATE PERSONS CHAPTER I

PRELIMINARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Section 4

Application of this Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 –– Application not maintainable where disputed claim is less than one lakh rupees. . . . . . . . . . . . . . . . . . . . . 17 –– Once the default in terms of Rule 3(12) of IBC is established and all other requirements are fulfilled, the Insolvency Resolution Process must be triggered. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 –– Tribunal is not required to determine the amount of default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

CHAPTER II CORPORATE INSOLVENCY RESOLUTION PROCESS. . . . . . . . . . . . 19 Section 5 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 –– Tribunal is guided by section 424 of the Companies Act, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 –– No reliance can be placed on the National Company Law Tribunal Rules, 2016 . . . . . . . . . . . . . . . . . . . 27 Sub-section (6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 –– Definition of “dispute” is an inclusive one . . . . . . . . . . . . . . 27 –– The scheme of the Code is to ensure that the insolvency resolution process begins when a default takes place. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 –– Disputes in the form of suit or arbitration proceedings must relate to one of the three subclauses either directly or indirectly . . . . . . . . . . . . . . . . . . . . 30 –– Counter claim is not a dispute relating to financial debt . . 31 xxii

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–– Dispute should truly exists in facts and the grounds for alleging the existence of a dispute are real and not spurious, hypothetical, illusory or misconceived . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Dispute must be pre-existing. . . . . . . . . . . . . . . . . . . . . . . . . –– Dispute should not be patently feeble legal argument or an assertion of fact unsupported by evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Breach of trust and Breach of terms of NonDisclosure Agreement is a dispute. . . . . . . . . . . . . . . . . . . . . –– Period of Limitation for filing dispute need to be taken into consideration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Pendency of the suit is to be demonstrated by the corporate debtor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Importing “bona fide” into section 8(2)(a) so as to judge whether a dispute exists or not is difficult. . . . . . . . . –– Tribunal has a responsibility to look into the nature of dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Before discussing the case and claim of the parties and the provision of law, the Adjudicating Authority cannot express and open its mind. . . . . . . . . . . . –– Application pending under section 34 or Appeal under section 37 of the Arbitration Act, 1996 is not a dispute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Documents in proof of dispute must be signed by and certified by an authorised person. . . . . . . . . . . . . . . . . . –– Dispute should not be a mere eyewash and an attempt to derail the entitlement to initiate the present proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– When dispute raised held to be illusory. . . . . . . . . . . . . . . . –– An understanding cannot be treated as dispute as to the existence of debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Onus to prove oral settlement claimed by corporate debtor lies on the corporate debtor. . . . . . . . . . . –– Creditor cannot rely on different facts in Appeal to suggest that there is no dispute. . . . . . . . . . . . . . . . . . . . . . . –– Mere existence of Arbitration Clause in Agreement does not prove existence of dispute . . . . . . . . .

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32 32

33 34 34 35 35 35

36 37

37 38 38 39 39 39

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–– For financial debt, even if there is a dispute, it does not matter so long as the debt is due. . . . . . . . . . . . . . –– Existence of Dispute upheld despite Resolution of Dispute as to quality of goods . . . . . . . . . . . . . . . . . . . . . . . . –– Reply to demand notice under section 8 cannot be taken into consideration for holding that there is a dispute in existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Any observations by court of law do not amount to ‘existence of dispute’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Whether the Police Complaint for criminal breach of trust, cheating, falsification of accounts and fabrication of documents can be treated to be as a ‘dispute in existence’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39 40

40 40

Sub-section (7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 –– Financial Creditor is a person who has right to a financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 –– Refusal to take documents in consideration filed subsequent to the order being reserved. . . . . . . . . . . . . . . . 42 –– Assignee of the debt is also entitled to file application. . . . 42 –– No privity of contract is required between corporate debtor and the assignee. . . . . . . . . . . . . . . . . . . . . 42 Sub-section (8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 –– Bank holding Corporate Guarantee considered as a financial creditor for the purpose of the meetings of COC and to allow to participate in and to contribute to the decision to be taken on finalization of the Resolution Plan. . . . . . . . . . . . . . . . . . . . . 43 –– Time value of money is an essential condition for a debt to be a financial debt. . . . . . . . . . . . . . . . . . . . . . . . . . 44 –– Home buyers with assured or committed return clause in the agreement are considered as financial creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 –– Home buyers are within the purview of financial creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 –– Deduction of Tax at Source on Interest Payment by the Corporate Debtor serves as a Proof of Loan being a Financial Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 –– Reliance on terms of agreement to prove Financial Debt. . 45

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–– Amounts raised from allottees under real estate projects are deemed to be amounts “having a commercial effect of a borrowing”. . . . . . . . . . . . . . . . . . . . . –– Mere fact that company paid interest during certain period cannot be the ground to gold that the ‘debt’ comes within the meaning of ‘Financial Debt’ . . –– The first essential requirement of the “Financial debt” that has to be met is that the debt is “disbursed against the consideration for time value of money”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Amount invested by ‘investors’ come within the meaning of ‘Financial Debt’ . . . . . . . . . . . . . . . . . . . . . . . . . . –– Any indemnity obligation in respect of guarantee come within the meaning of ‘Financial Debt’. . . . . . . . . . . . –– Guarantor company will also come within the meaning of ‘Corporate Debtor’ qua the ‘Financial Creditor’ in whose favour the guarantee has been given. . –– It is significant to discuss whether amount was given as the consideration against the time value of money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46 47 49

Sub-section (10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 –– Directions to Corporate Debtor to cooperate with Resolution Professional for collection of information. . . . . 52 Sub-section (13). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 –– Electricity, water and telecommunication services and Information Technology service are to be considered essential services as long as these services are not a requirement to the output produced or supplied by the Corporate Debtor. . . . . . . . . . 52 –– Wheeling of Power from one Unit to another is an essential service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 –– If any cost is incurred towards supply of the essential services during the period of ‘Moratorium’, it may be accounted towards ‘Insolvency Resolution Process Costs’. . . . . . . . . . . . . . . . . . 54 Sub-section (14). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 –– Insolvency Resolution Process Period starts to run from the insolvency commencement date and there is no provision to stop it under the Code. . . . . . . . . . 55 xxv

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–– Can the period of delay in appointment of Resolution Professional be deducted from the Insolvency Resolution Process Period?. . . . . . . . . . . . . . . . . 55 –– Insolvency Resolution Process to be Speedy preferably within One Hundred Days. . . . . . . . . . . . . . . . . . 56 Sub-section (20). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 –– Operational creditors cannot use the Insolvency Code either prematurely or for extraneous considerations or as a substitute for debt enforcement procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 –– It is not mandatory for the Operational Creditor to propose name of an Interim Resolution Professional. . . . . 57 –– The Trade Union or Association of Workmen/ employee do not come within the meaning of ‘operational creditor’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 –– Sub-tenant has no liability to pay the rent to the original owner of the premises. . . . . . . . . . . . . . . . . . . . . . . . 57 Sub-section (21). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 –– Filtration Process for classifying an amount to be operational debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 –– Insofar as an operational debt is concerned, all that has to be seen is whether the said debt can be said to be disputed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 –– To come within the meaning of “operational debt”, it is necessary to show that the claim relates to the provisions of the goods or services. . . . . . . . . . . . . . . . . . . . 59 –– Lease of Immovable Property does not qualify as operational debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Sub-section (22). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 –– Guarantors having repaid the loan on behalf of the corporate debtor become entitled to recover the same from the Corporate Debtor. . . . . . . . . . . . . . . . . . . 60 –– Financial Creditor Restrained from Selling the Assets of Personal Guarantor during Moratorium Period. . 60 –– Insolvency Resolution Process can be initiated against Corporate Guarantor and Principal Borrower simultaneously . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

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Sub-section (24). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 –– An ‘assignor’ assigns its debt in favour of the ‘assignee’ and ‘assignee’ steps in the shoes of the ‘assignor’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Section 6

Persons who may initiate corporate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Section 7

Initiation of corporate insolvency resolution process by financial creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 –– Application by a single Financial Creditor of Consortium is permitted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 –– The Adjudicating Authority is bound to issue notice to the corporate debtor before admitting a case. . . . 64 –– Notice of the application to be served on the Registered Office address. . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 –– Reasonable Opportunity to the Corporate Debtor is to be afforded before admitting Petition for corporate insolvency resolution process. . . . . . . . . . . . . . . . 65 –– Service of application at the registered office of the corporate debtor is a pre-requisite . . . . . . . . . . . . . . . . . 66 –– Application served on director constitutes due notice of the application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 –– No duty on the corporate debtor to inform the change of address to creditor. . . . . . . . . . . . . . . . . . . . . . . . . 66 –– Substituted service upon the Corporate Debtor . . . . . . . . . 67 –– Notice served on Administrative Office accepted. . . . . . . . 68 –– Fresh application can be filed under section 7 or section 9 of the Code in terms of Second proviso to Rule 5 of The Companies (Transfer of Pending Proceedings) Second Amendment Rules, 2017. . . . . . . . . . 68 –– Application must be admitted if a default has occurred, unless it is incomplete . . . . . . . . . . . . . . . . . . . . . . 69 –– Financial Creditor can file its claim before the Interim Resolution Professional for getting the amount back. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 –– If the classification is on reasonable differentia it does not offend the principle of equality . . . . . . . . . . . . . . . 70 –– The scheme of section 7 stands in contrast with the scheme under section 8 . . . . . . . . . . . . . . . . . . . . . . . . . . 70 xxvii

Case Digest on Insolvency and Bankruptcy Code, 2016

–– Tribunal may initiated CIRP where there is no appearance after notice served two times. . . . . . . . . . . . . . . –– Corporate Debtor need not be a party to the Assignment Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Tribunal not bound by ways and means suggested by a Counsel of the Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . –– The expression “default” bears the same meaning in sections 7 and 8 of the Code . . . . . . . . . . . . . . . . . . . . . . . –– Period of seven days for rectifying defects is not mandatory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– If there is a debt and default and the Corporate Applicant is not ineligible under section 11, application under section 10 has to be admitted, unless it is incomplete. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– “Winding up” under the Companies Act, 2013 has to be treated as “liquidation” under the Code . . . . . . . . . . . –– ‘Financial Creditor’ cannot file an application under Section 7 on violation of terms of resolution plan which was approved 12 months before the date of making an application . . . . . . . . . . . . . . . . . . . . . . . . –– The applicant under Section 7 or 9 of the Code is liable to incur the expenses of the Resolution Professional which will get reimbursed by the Committee of Creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Facts which are not required to be disclosed in the format cannot be treated to be suppression of facts . . . . . . –– Officers of Banks who have been authorized by the Competent Authority can file an application under Section 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– ‘Power of Attorney Holder’ is not competent to file an application on behalf of a ‘Financial Creditor’ or ‘Operational Creditor’ or ‘Corporate Applicant’ . . . . . . . –– It is open to the Corporate Debtor(s) or their promoters to negotiate with the Financial Creditor if applications under Section 7 are admitted against one or other Corporate Debtor. . . . . . . . . . . . . . . . . –– The ground that there was an existence of dispute between the ‘Corporate Debtor’ and the ‘Financial Creditor’ and the matter was referred xxviii

71 71 72 72 73

73 75

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for Arbitration, cannot be taken to oppose an application under Section 7 . . . . . . . . . . . . . . . . . . . . . . . . . . No person, including the ‘shareholders’ or the ‘personal guarantor’ etc., has a right to be heard at the stage of admission of the application under Sections 7 and 9 of the Code . . . . . . . . . . . . . . . . . . . . . . . . . Application under Section 7 or 9 or 10 is not a money claim or suit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . While entertaining an application under Section 7, the Adjudicating Authority or the Appellate Tribunal cannot decide issue concerning an ex-parte decree. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . For the purpose of admitting an application under Section 7, ‘default’ has to be ‘ascertained’ as on the date of decision of the Adjudicating Authority and not at the time of filing the application. . . . . . . . . . . . . . . . . Sections 3 and 4 of the Usurious Loans Act, 1918 are not applicable to the proceedings under Section 7 or 9 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . An intervener can demand a copy of a pleading only after being admitted as a party to the litigation. . . . . . The application under section 7 is maintainable against two ‘Corporate Debtors’ if they collaborate and form an independent unit entity. . . . . . . . . . . . . . . . . . . When CIRP initiates, the Adjudicating Authority has no jurisdiction to initiate another CIRP against the same debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Financial Creditor cannot withdraw application under Section 7 once it is admitted. . . . . . . . . . Petition under Section 433(e) of the Companies Act, 1956 on transfer under sub-sections (1) and (2) of Section 434 of the Companies Act, 2013 cannot be treated to be an application under Sections 7, 9 or 10 of the I&B Code. . . . . . . . . . . . . . . . . . . .

82 84

85 86

87 87

Sub-Section (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 –– Application by Power of Attorney holder. . . . . . . . . . . . . . . 88 –– Power of Attorney holder is not competent to file an application under the Code on behalf of the financial creditor or operational creditor or corporate applicant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 xxix

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–– Authorised Officers of the Applicant are competent to file an Application under the Code. . . . . . . . –– Applicability of the State Bank of India General Regulations, 1955 for signing authority. . . . . . . . . . . . . . . . –– Triggering of Insolvency Resolution Process cannot be defeated by taking resort to pendency of internal dispute between Directors of Corporate Debtor on allegations of oppression and mismanagement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Circular of Reserve Bank of India coming into effect after filing an application under Section 7 by the Financial Creditor, is not applicable. . . . . . . . . . . . . . . .

90 92

Sub-Section (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 –– Period of fourteen days for ascertaining the existence of default by the Tribunal is not mandatory . . . . 93 –– NCLT and NCLAT are required to adhere to the principles of natural justice. . . . . . . . . . . . . . . . . . . . . . . . . . . 95 –– The NCLAT will decide applications under Section 7 and 9 of the Code on the footing that the Limitation Act will apply to such petitions/ applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 –– Adjudicating Authority is required to ascertain existence of default from the records of Information Utility or on the basis of other evidence. . . . . 97 –– The time period of 14 days are to be counted from the date of receipt of the application. . . . . . . . . . . . . . . . . . . 97 –– Time limit of seven days for removal of defects is mandatory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 –– Opportunity granted to Financial Creditor to attach bank statement certified in accordance with the Bankers Books Evidence Act, 1891 . . . . . . . . . . . . . . . . . 98 –– Plea of Oral Agreement in the absence of the agreement cannot be a ground for rejection of application for initiating corporate insolvency resolution process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 –– Form 1 is not incomplete if ‘Not Applicable’ is mentioned.99 –– Objections filed by corporate debtor allowed to be withdrawn by the Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . 99

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Sub-Section (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 –– Conditions for admission or rejection. . . . . . . . . . . . . . . . . . 99 –– Presence of word ‘may’ in sub-section (5). . . . . . . . . . . . . . 100 –– Application under Section 7 cannot be rejected on the basis of reasons behind the default of payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 –– The application under Section 7 of the Code cannot be rejected on the ground of filing a winding up case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 –– Interpretation of the word ‘may’ appearing in section 7(5) of the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 –– Admission of Application by the Tribunal on fulfilment of conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 –– Dismissal of Application for non-prosecution. . . . . . . . . . 103 –– Notice for Rectification of Defect in the Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 –– Statutory scheme of the Code for removal of defects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 –– Is time limit of seven days for removal of defects mandatory or directory? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 –– Application for Condonation of Delay in Removing the Defect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 –– Withdrawal of Application after admission not permitted under the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . 107 –– Appellate Tribunal has no inherent power to permit withdrawal after admission . . . . . . . . . . . . . . . . . . . 107 –– Supreme Court may allow withdrawal of application under Article 142 of the Constitution. . . . . . . 108 –– Supreme Court recommended amendment in Rules to include inherent powers to allow compromise after admission of insolvency petition . . . . . 109 –– Format of the application under section 7 of the ‘I&B Code’ (Form-1) cannot be treated as an application under section 9 of the ‘I&B Code’ (Form-5). . 110 –– No second application against the same corporate debtor is maintainable once Corporate Insolvency Resolution Process has been initiated. . . . . . . . . . . . . . . . . 111 –– Amount reflected in the records of the company need not be a debt under the Code. . . . . . . . . . . . . . . . . . . 111 xxxi

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Sub-Section (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 –– RBI circular and guidelines do not override the provisions of Insolvency and Bankruptcy Code, 2016 (31 of 2016). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 –– Application against Corporate Guarantor is maintainable even if the Principal Borrower is undergoing corporate insolvency resolution process. . . . 112 –– Corporate debtor who is a guarantor cannot be regarded as defaulter as no default can be deemed to be committed by the principal borrower . . . . . . . . . . . . 113 –– A person can be considered as a Financial Creditor on the basis of the Assignment Deed . . . . . . . . . 113 –– Proceedings pending under the SARFAESI Act do no bar initiation of corporate insolvency resolution process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 –– Pending proceedings before Debt Recovery Tribunal have no relevance. . . . . . . . . . . . . . . . . . . . . . . . . . 114 –– Proceedings pending for dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881 are no bar for application under Section 7 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 –– Pendency of the case under Section 138/441 of Negotiable Instruments Act, 1881 amounts to admission of debt and not an existence of dispute . . . . . . 115 –– Existing Debt Restructuring Plan does not absolve the corporate debtor from Insolvency Resolution Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 –– Effect of pending winding-up petitions before the High Courts in respect of same corporate debtor . . . . . . . 117 –– The mere fact that post notice winding up proceedings are to be “dealt with” in accordance with the provisions of the Companies Act, 1956 does not bar the applicability of the provisions of IBC in general to proceedings validly instituted under IBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 –– Two split proceedings cannot go simultaneously before the DRT as well as NCLT . . . . . . . . . . . . . . . . . . . . . 119 –– Winding-up Petition on the same claim between the same parties pending before the High Court. . . . . . . . 119 xxxii

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–– No bar on NCLT to trigger an Insolvency Resolution Process on an application filed under Sections 7,9 & 10 if a winding up petition is pending unless an official liquidator has been appointed and a winding up order is passed. . . . . . . . . . . –– Interim Order by Appellate Tribunal to keep the Company as going concern . . . . . . . . . . . . . . . . . . . . . . . . . –– Code of Civil Procedure, 1908 is not applicable for filing of application under the Code . . . . . . . . . . . . . . . . . . –– Master circulars or guidelines etc. issued by the Reserve Bank of India are beyond the scope of Code. . . . –– Home Buyers with agreement of assured returns are financial creditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Corporate Insolvency Resolution Process can be initiated against the guarantor despite pendency of proceeding against the principal borrower . . . . . . . . . . Section 8

121 121 122 122 123

123

Insolvency resolution by operational creditor. . . . . . . . . . . 124 Sub-Section (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 –– Scheme of section 8 and 9 under the Code. . . . . . . . . . . . 125 –– Home Buyer not an operational creditor. . . . . . . . . . . . . . 127 –– Obligation of operational creditor to deliver demand notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 –– Lawyer cannot sign or issue demand notice on behalf of Operational Creditor. . . . . . . . . . . . . . . . . . . . . . . 128 –– Demand notice can be issued by a lawyer on behalf of operational creditor. . . . . . . . . . . . . . . . . . . . . . . . 129 Sub-Section (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 –– Period of ten days is mandatory. . . . . . . . . . . . . . . . . . . . . . 133 –– Existence of Dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 –– Dispute must truly exist in fact and should not be spurious, hypothetical or illusory. . . . . . . . . . . . . . . . . . . . . 133 –– Determining the meaning of existence of dispute. . . . . . . 134 –– The word ‘and’ occurring in Section 8(2)(a) must be read as ‘or’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 –– Dispute raised for the first time in response to the demand notice is not considered as ‘pre-existing dispute’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

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–– Pendency of suit or arbitration proceedings filed before the receipt of demand notice . . . . . . . . . . . . . . . . . . 135 –– Existence of dispute prior to issuance of Section 8 notice.136 –– Onus to prove the existence of oral settlement lies upon the corporate debtor . . . . . . . . . . . . . . . . . . . . . . . . . . 136 –– Dispute must be pre-existing and genuine. . . . . . . . . . . . . 136 –– Whether failure to send reply to the demand notice received by one of the directors of the Corporate Debtor is fatal?. . . . . . . . . . . . . . . . . . . . . . . . . . . 137 –– Tribunal has duty to see whether the dispute is spurious, hypothetical or illusory?. . . . . . . . . . . . . . . . . . . . 137 –– A lawyer can issue notice on behalf of an operational creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 –– The word “and” occurring in Section 8(2)(a) must be read as “or”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 –– Prior notice under section 8 is mandatory . . . . . . . . . . . . . 138 –– The expression “default” bears the same meaning in Sections 7 and 8 of the Code . . . . . . . . . . . . . . . . . . . . . . 139 –– Corporate debtor must bring to the notice of the operational creditor the existence of dispute within 10 days of the receipt of demand notice. . . . . . . . . 139 –– If a person does not hold any position with or in relation to the ‘Operational Creditor’, cannot issue notice under Section 8 of ‘I & B Code’. . . . . . . . . . . . . . . . . 140 –– Importing “bona fide” into Section 8(2)(a) so as to judge whether a dispute exists or not is difficult. . . . . . . . 141 –– In order to come within the ambit of ‘Financial Creditor’, claimant will have to show that money disbursed has been made against ‘consideration for the time value of money’. . . . . . . . . . . . . . . . . . . . . . . . . 141 –– Application under Section 9 is not maintainable when there is an existence of dispute prior to issuance of notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 –– The Director of the ‘Corporate Debtor’ cannot be held to have been playing mischief in the absence of any specific evidence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 –– Appellant cannot claim to have granted the ‘Corporate Debtor’ unsecured loan with interest, when the Board of Directors of the ‘Corporate xxxiv

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Debtor’ has decided to accept ‘interest free unsecured loan’ in their meeting. . . . . . . . . . . . . . . . . . . . . –– The legislative intent of issuance of Demand Notice under Section 8(1) is not a mere formality but a mandatory provision. . . . . . . . . . . . . . . . . . . . . . . . . . –– The Adjudicating Authority will decide an application under Section 9 uninfluenced of the impugned order if it is filed after giving notice to the ‘Corporate Debtor’ and gives reference to the earlier Demand Notice under Section 8(1) of the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Any person having relation with the company is entitled to issue notice under Section 8 of the Code. . . . . Section 9

143

144 144

Application for initiation of corporate insolvency resolution process by operational creditor. . . . . . . . . . . . . . 145 Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 –– Operational creditor to file claim if interim resolution professional stands appointed. . . . . . . . . . . . . . 147 –– Section 9(1) contains the condition precedent for triggering the Code insofar as an operational creditor is concerned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 Sub-section (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 –– Notice of application to be sent at the registered office address of the corporate debtor. . . . . . . . . . . . . . . . . 149 –– Reasonable Opportunity to the Corporate Debtor is to be afforded before admitting Petition for corporate insolvency resolution process. . . . . . . . . . . . . . . 149 –– Application under section 9 cannot be admitted without any notice and without giving any opportunity to the Corporate Debtor . . . . . . . . . . . . . . . . . 149 –– Ex parte order passed by Adjudicating Authority without prior notice or intimation of hearing to the Corporate Debtors is against the principles of rules of natural justice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 –– Application served on director is considered due notice of the application. . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 –– No duty of the corporate debtor to inform the change of address to creditor. . . . . . . . . . . . . . . . . . . . . . . . 150 –– Substituted service upon the Corporate Debtor . . . . . . . . 151 xxxv

Case Digest on Insolvency and Bankruptcy Code, 2016

–– Notice served on Administrative Office is valid. . . . . . . . . 151 –– Postal remarks of “insufficient address” considered as sufficient compliance under the Code . . . . . . . . . . . . . . 152 –– Notice served on insufficient or wrong address. . . . . . . . . 152 Sub-section (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 –– Opportunity to file fresh affidavit allowed. . . . . . . . . . . . . 152 –– Certificate by the Financial Institution is an important piece of information . . . . . . . . . . . . . . . . . . . . . . 152 –– Bank directed to explain refusal to issue certificate under section 9(3)(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 –– Procedure is the handmaid of justice and a procedural provision cannot be stretched and considered as mandatory, when it causes serious general inconvenience. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 –– Onus to prove the existence of the alleged defects in the goods supplied lies upon the corporate debtor. . . . 155 –– Proof of existence of a debt and a default in relation to such debt can be proved by documentary evidence as contemplated by section 9(3)(d) of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . 156 –– ‘Dispute’ has to be construed broadly and not in narrow spectrum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 –– Bank is bound to issue the certificate as envisaged under section 9(3)(c) of the Code when the creditor approaches the bank. . . . . . . . . . . . . . . . . . . . . . . . 157 –– Withdrawal permitted by the Tribunal before admission.157 –– Withdrawal of petition with liberty to file fresh petition. . 157 –– Imposition of Cost by the Tribunal for delay in filing reply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 –– Request for waiver of cost refused. . . . . . . . . . . . . . . . . . . . 158 –– Interim order issued before admission of section 9 application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 –– Tribunal has summary jurisdiction . . . . . . . . . . . . . . . . . . . 158 –– Tribunal directed production of Ledger Accounts. . . . . . . 158 –– Appellate Tribunal refused to interfere with the order of admission in the absence of any record in support of the dispute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

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–– Winding up petition transferred to the Tribunal cannot be considered as application under section 9 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Recommendation of the Board for the appointment of interim resolution professional is not mandatory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Expeditious disposal of applications. . . . . . . . . . . . . . . . . . –– Notice for Rectification of Defect in the Application. . . . . –– Time limit of seven days for removal of defects whether mandatory or directory?. . . . . . . . . . . . . . . . . . . . . –– Application for Condonation of Delay in Removing the Defect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Key elements to be examined by the Tribunal. . . . . . . . . . –– No claim can be made against more than one Corporate Debtor in a single petition. . . . . . . . . . . . . . . . . –– Compromise after admission of application under section 9 is immaterial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Once the Interim Resolution Professional is appointed, no application for Corporate insolvency resolution process can be admitted. . . . . . . . . –– Proof of Registered Partnership Form to be attached to maintain Application under section 9. . . . . . . –– Trade Union cannot file application under section 9. . . . . –– Which Application to be taken up first for Admission by the Tribunal? . . . . . . . . . . . . . . . . . . . . . . . . . –– Condition precedent impossible of compliance not a bar to application under section 9. . . . . . . . . . . . . . . –– The NCLAT will decide applications under section 7 and 9 of the Code on the footing that the Limitation Act will apply to such petitions/applications. –– Joint application under section 9 by one or more ‘operational creditor’ is not maintainable. . . . . . . . . . . . . . –– A lawyer can issue notice on behalf of an operational creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Corporate debtor must bring to the notice of the operational creditor the existence of dispute within 10 days of the receipt of demand notice. . . . . . . . . –– Application under section 9 is not maintainable in the absence of evidence of debt. . . . . . . . . . . . . . . . . . . . . . xxxvii

159

160 160 160 161 162 163 164 164

165 165 165 165 166

167 167 167

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–– Where the principle amount has been paid and no interest is payable as per agreement, an application under section 9is not maintainable on the basis of claims for entitlement of interest. . . . . . . . . . . –– Section 9(3)(c) would have to be construed as being directory in nature. . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Petition under section 433(e) of the Companies Act, 1956 on transfer under Sub-sections (1) and (2) of section 434 of the Companies Act, 2013 cannot be treated to be an application under sections 7, 9 or 10 of the I&B Code. . . . . . . . . . . . . . . . . . . –– When CIRP initiates, the Adjudicating Authority has no jurisdiction to initiate another CIRP against the same debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Period of seven days for rectifying defects is not mandatory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Fresh application can be filed under section 7 or Section 9 of the Code in terms of Second proviso to Rule 5 of The Companies (Transfer of Pending Proceedings) Second Amendment Rules, 2017. . . . . . . . . –– “Winding up” under the Companies Act, 2013 has to be treated as “liquidation” under the Code . . . . . . . . . . –– Petition under Section 9 is not maintainable when there is an existence of dispute . . . . . . . . . . . . . . . . . . . . . . –– Interim Resolution Professional will have to pay for essential goods or services on behalf of the corporate debtor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Application under Section 9 cannot be entertained when there is an existence of dispute with regard to the quality of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Application under Section 9 can be filed through Resolution Professional during Corporate Insolvency Resolution Process. . . . . . . . . . . . . . . . . . . . . . . –– The applicant under Section 7 or 9 of the Code is liable to incur the expenses of the Resolution Professional which will get reimbursed by the Committee of Creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Application under Section 9 is not maintainable when there is an existence of dispute prior to issuance of notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxxviii

169 170

170

170 171

172 172 174

174

175

176

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–– In an application under section 9, the Adjudicating Authority will have to determine whether there is an “operational debt”. . . . . . . . . . . . . . . . –– ‘Power of Attorney Holder’ is not competent to file an application on behalf of a ‘Financial Creditor’ or ‘Operational Creditor’ or ‘Corporate Applicant’ . . . . . . –– The true construction of Section 9(3)(c) is that it is a procedural provision, which is directory in nature. . . . . –– The petition under Section 9 is not maintainable on commencement of arbitral proceedings, if there is an existence of dispute . . . . . . . . . . . . . . . . . . . . . . –– The ground that there was an existence of dispute between the ‘Corporate Debtor’ and the ‘Financial Creditor’ and the matter was referred for Arbitration, can be taken to oppose an application under Section 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– If the ‘debt’ is disputed, the question of default does not arise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– No person, including the ‘shareholders’ or the ‘personal guarantor’ etc., has a right to be heard at the stage of admission of the application under Sections 7 and 9 of the Code . . . . . . . . . . . . . . . . . . . . . . . . –– The Adjudicating Authority will decide an application under Section 9 uninfluenced of the impugned order if it is filed after giving notice to the ‘Corporate Debtor’ and gives reference to the earlier Demand Notice under Section 8(1) of the Code. . –– Raising of dispute in regard to quality of goods being inferior for the first time in reply to demand notice would not constitute a prior dispute as a defence to the initiation of Corporate Insolvency Resolution Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Sections 3 and 4 of the Usurious Loans Act, 1918 are not applicable to the proceedings under Section 7 or 9 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . –– Even if one or more than one of the partners is the ‘Corporate Debtor’ from the partnership firm, application under section 9 is not maintainable . . . . . . . .

177

177 179

181

181 182

182

184

185

186

Sub-Section (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186

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–– No direct contract between the applicant and the corporate debtor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Whether the application preferred by appellant under Section 9 can be rejected at the threshold on the ground of technicalities that the notice has not been issued under Section 8 of the Code or not? . . . . –– Transfer of Case from one Bench to another can be done by President of the Tribunal only . . . . . . . . . . . . . –– Resolution process cannot be set aside on the ground that the parties agreed for settlement . . . . . . . . . . –– Once the operational creditor has filed an application, the Adjudicating Authority can reject it under Section 9(5)(2)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . –– The dispute raised on imaginary facts and circumstances while replying to the demand notice cannot be treated to be an ‘existence of dispute’ for rejecting the application under Section 9 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 10

186

186 187 187

188

Initiation of corporate insolvency resolution process by corporate applicant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 –– Operational Creditors to submit claims before the Interim Resolution Professional on admission of application under section 10 filed by the corporate debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 –– Pendency of suits cannot be a ground to deny admission of an application under Section 10. . . . . . . . . . 191 –– Non-mentioning of suit(s) pending between the parties cannot termed to be suppression of facts. . . . . . . . 191 –– Application under Section 10 cannot be filed where winding up proceedings has already been initiated by the High Court or Tribunal. . . . . . . . . . . . . . . . 191 –– Filing of Application under section 10 implies dropping of proceedings before Debt Recovery Tribunal by the Financial Creditors. . . . . . . . . . . . . . . . . . . 193 –– Notice to secured creditors before admitting application under Section 10 of the Code. . . . . . . . . . . . . . 194

Table of contents

–– Initiating Corporate Insolvency Resolution Process under Section 10 does not affect the rights of financial creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Decision of the shareholders of a company is required to file an application under Section 10 of the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Petition under Section 433(e) of the Companies Act, 1956 on transfer under sub-sections (1) and (2) of section 434 of the Companies Act, 2013 cannot be treated to be an application under sections 7, 9 or 10 of the I&B Code. . . . . . . . . . . . . . . . . . . –– The shareholder has a right to decide whether approving or disapproving the decision be proceeded under Section 10 of the Code . . . . . . . . . . . . . . –– Decision of the shareholders of a company is required to file an application under Section 10 of the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

194

195

196

Sub-section (4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 –– Cost of Rs. 10 lacs imposed on corporate debtor for fraudulent and malicious proceedings . . . . . . . . . . . . . 197 –– Liberty can be granted to withdraw the appeal to enable the Board of Directors to place matter before the shareholders and creditors and to take its approval for filing application under Section 10 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 –– Delay in passing order by Ahmedabad Bench of Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 –– Period of fourteen days for passing of Order by the Tribunal is not mandatory . . . . . . . . . . . . . . . . . . . . . . . 199 –– Counting the period of fourteen days. . . . . . . . . . . . . . . . . 200 –– Notice for Rectification of Defect in the Application. . . . . 201 –– The Adjudicating Authority has to satisfy that the application is not defective. . . . . . . . . . . . . . . . . . . . . . . . . . 201 –– Is time limit of seven days for removal of defects mandatory or directory? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 –– Application for Condonation of Delay in Removing the Defect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203

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–– Period of 7 days for removal of defects commences from date of receipt of notice and not from the date of order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Dismissal of Application for non-prosecution. . . . . . . . . . –– Section 10 petition filed beyond the period of 180 days of the Sick Industrial Companies (Special Provisions) Act, 1985 rejected . . . . . . . . . . . . . . . . . . . . . . . –– Pendency of proceedings before DRT and invocation of SARFAESI Act is no ground not to commence insolvency resolution process. . . . . . . . . . . . . –– Application under section 10 filed after statutory time limit of 180 days upon repeal of Sick Industrial Companies (Special Provision) Act, 1985 is not maintainable. . . . . . . . . . . . . . . . . . . . . . . . –– Period of seven days for rectifying defects is not mandatory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– If there is a debt and default and the Corporate Applicant is not ineligible under Section 11, application under Section 10 has to be admitted, unless it is incomplete. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Action taken by a ‘Financial Creditor’ under Section 13(4) of the SARFAESI Act, 2002 against the Corporate Debtor or a suit pending against Corporate Debtor under Section 19 of DRT Act, 1993 cannot be a ground to reject an application under Section 10 . . . . . . . . . . . . . . . . . . . . . . . . –– Code overrides SARFAESI Act, 2002 etc. . . . . . . . . . . . . . . –– Application cannot be rejected on extraneous grounds. . Section 11

204 205

205

206

206 208

208

210 211 211

Persons not entitled to make application . . . . . . . . . . . . . . . 212 –– Operational creditor to file claim if interim resolution professional stands appointed. . . . . . . . . . . . . . 213 –– Corporate applicants barred from filing application under section 10 of the Code before the expiry of 12 months from completion of earlier corporate insolvency resolution process. . . . . . . . . 213 –– Application under Section 10 cannot be filed where winding up proceedings has already been initiated by the High Court or Tribunal. . . . . . . . . . . . . . . . 214

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–– If there is a debt and default and the Corporate Applicant is not ineligible under Section 11, application under Section 10 has to be admitted, unless it is incomplete. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216 Section 12

Time-limit for completion of insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 Sub-section (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 –– Extension on the ground that resolution plans have been submitted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 –– Circumstances must exist for grant of extension. . . . . . . . 218 –– ‘Golden Six’ grounds for exclusion of certain period from statutory period allowed for Corporate Insolvency Resolution Process. . . . . . . . . . . . . . 219 –– Application for extension of time period of Corporate insolvency resolution process can be filed after the expiry of the period. . . . . . . . . . . . . . . . . . . . 220 –– Application for extension of time can be filed only if committee of creditors approves it but it can be filed after expiry of 180 days. . . . . . . . . . . . . . . . . . . . . . . . . 221 –– Application for extension of time on the ground that more time is required to get resolution plan from stakeholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 –– Extension can be granted on the ground that Resolution Plan is under active consideration of the Committee of Creditors . . . . . . . . . . . . . . . . . . . . . . . . . 222 –– Application for extension of the period of the corporate insolvency resolution process can be filed after expiry of 180 days. . . . . . . . . . . . . . . . . . . . . . . . . 222 Sub-section (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 –– Extension Refused as no useful purpose will be served. . 223 –– Notice by the Tribunal to Bank to show-cause as to why Contempt Proceedings be not initiated. . . . . . . . . 223 –– Extension granted based on Progress Report filed by the Resolution Professional. . . . . . . . . . . . . . . . . . . . . . . 223 –– Time periods mentioned in Section 12 are mandatory. . . 224

Section 12A Withdrawal of application under section 7, 9 or 10. . . . . . . 224

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Case Digest on Insolvency and Bankruptcy Code, 2016

–– Section 12A of the Code would be applicable when admission for insolvency resolution application has been admitted by the Adjudicating Authority and there is no challenge to the admission of the application. . . . . . . . . . . . . . . . . . . . . . . . . 224 –– Withdrawal can be permitted even after issue of invitation for expression of interest. . . . . . . . . . . . . . . . . . . 225 Section 13

Declaration of moratorium and public announcement . . . 225

Section 14 Moratorium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 Clause (a) of Section 14(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 –– Arbitration Proceeding initiated after the moratorium is non-est in law. . . . . . . . . . . . . . . . . . . . . . . . 227 –– Arbitration Proceedings cannot be initiated by erstwhile management during moratorium period. . . . . . 227 –– Arbitration Proceedings against Corporate Debtor to remain suspended during moratorium. . . . . . . . . . . . . . 228 –– Arbitration instituted after the moratorium is non est in law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228 –– No prohibition to filing or continuation of suit or proceeding by the corporate debtor . . . . . . . . . . . . . . . . . . 229 –– Application for restoring electricity dismissed. . . . . . . . . . 229 –– Court includes High Court and Supreme Court. . . . . . . . 230 –– Criminal Proceedings against the corporate debtor and directors can continue. . . . . . . . . . . . . . . . . . . . . . . . . . 231 –– Amount lying attached under the orders of the Executing Court can be considered while preparing the Resolution Plan. . . . . . . . . . . . . . . . . . . . . . . 232 –– No appropriation can be done towards outstanding dues by a Bank after declaration of Moratorium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232 –– IBC has been enacted to set up Insolvency and Bankruptcy resolution process to be implemented in a time bound manner. . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 –– Mining Lease cannot be cancelled during moratorium period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 Sub-section (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 –– Wheeling of Power from one Unit to another is an essential service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235

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–– Application for restoring electricity dismissed. . . . . . . . . . –– Moratorium is not applicable to Personal Guarantors. . . . –– If any cost is incurred towards supply of the essential services during the period of ‘Moratorium’, it may be accounted towards ‘Insolvency Resolution Process Costs’. . . . . . . . . . . . . . . . . –– Amendment of 2018 in Section 14 is clarificatory and retrospective in nature. . . . . . . . . . . . . . . . . . . . . . . . . . –– Where the land belongs to the ‘Maharashtra Housing and Area Development Authority’, and the same has not been formally transferred in favour of the ‘Corporate Debtor’, it cannot be treated to be the asset of the corporate debtor. . . . . . . . . . –– ‘Security Interest’ mentioned in Section 14(1)(c) do not include the ‘Performance Bank Guarantee’ . . . . . . –– Moratorium will not affect any suit pending before Supreme Court under Article 32 of the Constitution of India or the power of the High Court under Article 226 of the Constitution of India . . . . –– Sections 96 and 101, when contrasted with Section 14, would show that Section 14 cannot possibly apply to a personal guarantor. . . . . . . . . . . . . . . . –– Handing over any document will not amount to violation of ‘Moratorium’ order . . . . . . . . . . . . . . . . . . . . . . –– Owner cannot recover the property occupied by the tenant ‘Corporate Debtor’ during the period of moratorium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Amount due to the person whose rights are prejudicially affected on account of the moratorium is to be included in the insolvency resolution process costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– The court of competent jurisdiction can proceed with the proceeding under Section 138 of the Negotiable Instruments Act, even during the period of moratorium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Amount deposited in the account of CoC cannot be appropriated by bank towards its own dues during the moratorium period. . . . . . . . . . . . . . . . . . . . . . .

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236 236

236 237

242 242

243

243 244

244

245

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–– The personal and individual assets of a Director is not the subject matter of the ‘Corporate Insolvency Resolution Process’ . . . . . . . . . . . . . . . . . . . . . . 247 –– A money suit or suit for recovery, if filed before any High Court under original jurisdiction against the ‘corporate debtor’, such suit cannot proceed after declaration of ‘moratorium, under Section 14. . . . . . 247 –– Corporate Debtor or Resolution Professional are not liable to pay the dues of period prior to passing of order of moratorium. . . . . . . . . . . . . . . . . . . . . . 248 Section 15

Public announcement of corporate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248 Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 –– Timeline provided by the Code could not be eroded in such a manner as to cause delay in the Corporate Insolvency Resolution Process. . . . . . . . . . . . . . 249

Section 16

Appointment and tenure of interim resolution professional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 –– Payment of Fee of Interim Resolution Professional where the order of the Tribunal is set aside by the Appellate Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 Sub-section (5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 –– Previous Assignments of Interim Resolution Professional are a relevant factor while considering his appointment in another case. . . . . . . . . . . 251 –– Interim Resolution Professional should not accept too many assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 –– Committee of Creditors should move application for change of Interim Resolution Professional. . . . . . . . . . 252 –– Appointment of Interim Resolution Professional confirmed from a later date. . . . . . . . . . . . . . . . . . . . . . . . . . 252 –– Whether period of Corporate Insolvency Resolution Process can be extended where there is delay in recommending the name of IRP by the Board.252 –– Erstwhile directors who are no longer in management cannot maintain an appeal on behalf

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of the company on appointment of an Insolvency Professional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 –– A majority vote of not less than 75% of voting share of the ‘Committee of Creditors’ is required to replace the ‘Interim Resolution Professional’ by another ‘Resolution Professional’. . . . . . . . . . . . . . . . . . . . . 254 Section 17

Management of affairs of corporate debtor by interim resolution professional . . . . . . . . . . . . . . . . . . . . . . . 256 –– Interim Resolution Professional is not vested with any specific power to sue any person on behalf of the ‘Corporate Debtor’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257

Section 18

Duties of interim resolution professional. . . . . . . . . . . . . . . 257 Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259 –– Claims cannot be filed beyond last date of submission of claim in corporate insolvency resolution process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259 –– The Interim Resolution Professional can take control and custody of the property leased by the corporate debtor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259 –– The Resolution Professional/Liquidator has no jurisdiction to take over any asset of the subsidiary company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260 –– Recovery of Debts during Corporate Insolvency Resolution Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260 –– Appointment of Special Auditor . . . . . . . . . . . . . . . . . . . . . 261 –– Insolvency Resolution Professional cannot remove the tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261

Section 19

Personnel to extend co-operation to interim resolution professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262 Sub-section (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262 –– Interim Resolution Professional is at liberty to make application for non-cooperation of personnel. . . . . 262 –– Direction given to other entities to cooperate with Interim Resolution Professional to provide what all information of the Company lying with the respective authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263 –– Direction to Corporate Debtor to cooperate with Interim Resolution Professional. . . . . . . . . . . . . . . . . . . . . . 263

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–– Direction issued to Noida Authority to release relevant records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Directions to Corporate Debtor to cooperate with Resolution Professional for collection of information. . . . –– Bailable Warrants issued by Tribunal for appearance of Respondents . . . . . . . . . . . . . . . . . . . . . . . . . –– Application for declaring the lockout illegal. . . . . . . . . . . . –– Directions given to Police to assist Resolution Professional for carrying out his duties. . . . . . . . . . . . . . . . Section 20

263 264 264 265 265

Management of operations of corporate debtor as going concern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266 Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 –– Stoppage of operations while the moratorium is in force is illegal and inoperative. . . . . . . . . . . . . . . . . . . . . . . 267

Section 21

Committee of creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 –– Any plan which has not been approved by the ‘Committee of Creditors’ with minimum voting share, cannot be approved by the Adjudicating Authority as it will violate the provisions of Section 30(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271

Section 22

Appointment of resolution professional. . . . . . . . . . . . . . . . 271 Sub-Section (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273 –– Adjudicating Authority to forward name of Resolution Professional to IBBI . . . . . . . . . . . . . . . . . . . . . . 273 –– Replacement of Interim Resolution Professional due to his health reasons. . . . . . . . . . . . . . . . . . . . . . . . . . . . 273 –– A majority vote of not less than 75% of voting share of the ‘Committee of Creditors’ is required to replace the ‘Interim Resolution Professional’ by another ‘Resolution Professional’. . . . . . . . . . . . . . . . . . . . . 274 –– A Resolution Professional empanelled as an Advocate or Company Secretary or Chartered Accountant cannot be a ground to reject the proposal. . . 275 –– It is always open to any ‘Financial Creditor’ to appoint ‘Insolvency Professional’ to verify all the action and to assist the ‘Committee of Creditors’ . . . . . . . 276

Section 23

Resolution professional to conduct corporate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . 276 xlviii

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–– If any amount is withdrawn by the Resolution Professional during the Corporate Insolvency Resolution Process, such amount can be debited to ensure that excess withdrawal is not made beyond the available balance. . . . . . . . . . . . . . . . . . . . . . . . 277 Sub-section (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 –– Notice by email to the financial creditors. . . . . . . . . . . . . . 277 Section 24

Meeting of committee of creditors. . . . . . . . . . . . . . . . . . . . . 278 –– When the allotment of equity shares in favour of the financial creditor is not approved by the stock exchange, the financial creditor cannot be treated as a ‘related party’ in relation to the corporate debtor. . . . 279

Section 25

Duties of resolution professional. . . . . . . . . . . . . . . . . . . . . . 281 –– Insolvency Resolution Professional cannot remove the tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282 –– The authorised person who will sign the cheques will have to intimate the Resolution Professional or its authorised representative the purpose of issuance of cheques. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282

Section 25A Rights and duties of authorized representative of ﬁnancial creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283 Section 26

Application for avoidance of transactions not to affect proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284

Section 27

Replacement of resolution professional by committee of creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284 –– A majority vote of not less than 75% of voting share of the ‘Committee of Creditors’ is required to replace the ‘Interim Resolution Professional’ by another ‘Resolution Professional’. . . . . . . . . . . . . . . . . . . . . 285 –– The Adjudicating Authority is duty bound to consider the name of another ‘Resolution Professional’. . 286 –– Pending fee of Resolution Professional to be paid. . . . . . . 287

Section 28

Approval of committee of creditors for certain actions. . . . 287

Section 29

Preparation of information memorandum. . . . . . . . . . . . . . 289

Section 29A Persons not eligible to be resolution applicant.. . . . . . . . . . 289 –– The expression “acting jointly” in Section 29A cannot be confused with “joint venture agreements”. . . . 294

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Case Digest on Insolvency and Bankruptcy Code, 2016

–– Stage of ineligibility attaches when the resolution plan is submitted by a resolution applicant . . . . . . . . . . . . –– Section 29A is intended to ensure that persons responsible for insolvency of the corporate debtor do not participate in the resolution process. . . . . . . . . . . . –– The expression “control”, in Section 29A(c), denotes only positive control. . . . . . . . . . . . . . . . . . . . . . . . –– Ineligibility can only be removed if the necessary payment is made before submission of a resolution plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– The provision in Section 29A(d) which stipulates “has been convicted for any offence punishable with imprisonment for two years or more”, cannot be equated with Section 33(1)(a) of the ‘U.K.Act’.. . . . . . . –– The IBBI have no locus standi to challenge the finding of the Adjudicating Authority, however, liberty can be given to the IBBI to inform the Resolution Professional to move appeal under Section 61 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Section 29A(d) can never be applied to ‘juristic person’ because a ‘juristic person’ can never be imprisoned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– The word ‘punishable’ used in Section 29A(d) is a link between the offence and the penalty prescribed by law depending on the gravity of the offence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Merely retention of two of the Directors of the Corporate Debtor does not violate any of the provision of Section 29A of the Code . . . . . . . . . . . . . . . . . –– ‘Appellant’ cannot be made eligible to file resolution plan after order of liquidation on the ground of amended Section 29A. . . . . . . . . . . . . . . . . . . . . –– Rejection or approval of a resolution plan is the right of the committee of creditors and Resolution Professional cannot reject any plan without a decision of committee of creditors. . . . . . . . . . . . . . . . . . . . Section 30

294

295 295

296

297

298

299

300

301

302

Submission of resolution plan . . . . . . . . . . . . . . . . . . . . . . . . 303 –– The Adjudicating Authority has jurisdiction to remove the Resolution Professional . . . . . . . . . . . . . . . . . . 305 l

Table of contents

–– The Adjudicating Authority can order for initiation of Liquidation Process once the ‘Resolution Plan’ is rejected by the Committee of Creditors in view of Section 30 & 31. . . . . . . . . . . . . . . . . . –– The Resolution Professional cannot issue another revised Information Memorandum till the ‘Committee of Creditors’ allows the ‘Resolution Professional’ to prepare a revised Information Memorandum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Any plan which has not been approved by the ‘Committee of Creditors’ with minimum voting share, cannot be approved by the Adjudicating Authority as it will violate the provisions of Section 30(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– The Adjudicating Authority can order for liquidation of the ‘Corporate Debtor’ in the absence of any viable resolution plan. . . . . . . . . . . . . . . . . –– The Adjudicating Authority or the Appellate Tribunal cannot sit in appeal over the decision of the ‘Committee of Creditors’. . . . . . . . . . . . . . . . . . . . . . . . –– Discrimination cannot be made between the ‘Financial Creditors’ on the ground that one has dissented in Resolution Plan and the other has supported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– There is no requirement to issue notice to the ‘Operational Creditor(s)’ or any other ‘creditors’ for approving a ‘Resolution Plan’ which is already approved by the ‘Committee of Creditors’. . . . . . . . . . . . . –– The amended Section 30(4) coming into force from 06-06-2018 is applicable to all ‘Resolution Plans’ which were not approved by the ‘Committee’ of Creditors’ or by the Adjudicating Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Merger and amalgamation can be proposed in the Resolution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 31

307

308

309

310

310 311

Approval of resolution plan . . . . . . . . . . . . . . . . . . . . . . . . . . 311 –– To decide an application beyond the period of 270 days, the time taken in legal proceedings to decide the matter cannot possibly be excluded . . . . . . . . . . . . . . . 312 –– Guarantor cannot escape payment . . . . . . . . . . . . . . . . . . . 313 li

Case Digest on Insolvency and Bankruptcy Code, 2016

–– Sanctioned rehabilitation schemes have been treated as schemes deemed to have been sanctioned under Section 31(1) of the Code . . . . . . . . . . . –– Proceedings pending before the Debt Recovery Tribunal cannot go on when the liability has not been crystallized. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– Resolution applicant can withdraw the resolution plan modified by the Adjudicating Authority in case of dissatisfaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– The Adjudicating Authority can order for initiation of Liquidation Process once the ‘Resolution Plan’ is rejected by the Committee of Creditors in view of Section 30 & 31. . . . . . . . . . . . . . . . . . –– The Corporate Debtor, their officers cannot be held responsible in the absence of any evidence after the approval of the resolution plan. . . . . . . . . . . . . . . –– The Board of Directors cannot decide the viability and feasibility of a ‘Resolution Plan’ . . . . . . . . . . . . . . . . . . –– If the scheme sanctioned under Section 18(4) of SICA Act, 1985 is treated to be a scheme sanctioned under Section 31(1) of the Code, no relief can be granted to the appellant in absence of any provision of review of the scheme sanctioned under Section 31(1) of the Code . . . . . . . . . . . . . . . . . . . . . –– The Adjudicating Authority cannot modify the resolution plan in the absence of any discrimination or perverse decision . . . . . . . . . . . . . . . . . . –– The provisions of ‘Gujarat Electricity Regulatory Commission (Electricity Supply Code and related matters) Regulations, 2015’ cannot override the provision of Section 31 of the Code. . . . . . . . . . . . . . . . . . . –– There is no requirement to issue notice to the ‘Operational Creditor(s)’ or any other ‘creditors’ for approving a ‘Resolution Plan’ which is already approved by the ‘Committee of Creditors’. . . . . . . . . . . . .

314

315

316 316

317

318

Sub-Section (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 –– No interference of Tribunal called for in decision of committee of creditors to reject the plan . . . . . . . . . . . . 319 Section 32 Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 lii

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CHAPTER III LIQUIDATION PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320 Section 33

Initiation of liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320 –– Proceedings pending before the Debt Recovery Tribunal cannot go on when the liability has not been crystallized. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 Sub-Section (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 –– Liquidation is a natural consequence upon expiry of time for corporate insolvency resolution process. . . . . 322 –– Adjudicating Authority is not expected to substitute its view with commercial wisdom of professional experts i.e. Resolution Professional and Committee of Creditors nor it should deal with technical complexity and merits of Resolution Plan or otherwise unless it found contrary to express provision of law and goes against the public interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 322 –– Request of Resolution Professional not willing to act as Liquidator of the Corporate Debtor was not acceded to by the Tribunal . . . . . . . . . . . . . . . . . . . . . . . . . . 323 –– Decision of Committee of Creditors to liquidate the corporate debtor earlier than expiry of statutory time limit upheld. . . . . . . . . . . . . . . . . . . . . . . . . . 323 Sub-Section (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324 –– Corporate Debtor directed to be liquidated on the decision of the committee of creditors to liquidate. . . . . . 324 –– Sub-Section (5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 –– Arbitration Proceeding initiated after the liquidation order would be non-est in law. . . . . . . . . . . . . 326 –– Court includes High Court and Supreme Court. . . . . . . . 327 –– Fresh moratorium starts on liquidation order. . . . . . . . . . 328

Section 34

Appointment of liquidator and fee to be paid. . . . . . . . . . . 328 –– The Adjudicating Authority has jurisdiction to remove the Resolution Professional . . . . . . . . . . . . . . . . . . 330 –– The Adjudicating Authority can engage another Resolution Professional or Liquidator if it is dissatisfied with the performance of the Resolution Professional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 Sub-section (4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 liii

Case Digest on Insolvency and Bankruptcy Code, 2016

–– Adverse Remarks against the Resolution professional were expunged but the decision of the Tribunal to appoint another Insolvency Professional in place of Resolution Professional was upheld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 Section 35

Powers and duties of liquidator . . . . . . . . . . . . . . . . . . . . . . . 333 Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335 –– Application to the Tribunal for inclusion of workmen representatives in the Monitoring Committee. 335 –– Liquidator cannot interfere with Security Interest of Secured Creditor upon Liquidation order once the Secured Creditors makes a choice to sell the security Interest on its own. . . . . . . . . . . . . . . . . . . . . . . . . . 336 –– Liquidator to seek clarification by way of filing a company application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337

Section 36

Liquidation estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337 –– Income Tax Department cannot claim any priority merely because of the fact that the order of attachment issued by it was long prior to the initiation of liquidation proceedings under the Code. . . . 339

Section 37

Powers of liquidator to access information. . . . . . . . . . . . . . 340

Section 38

Consolidation of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340

Section 39

Verification of claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341

Section 40

Admission or rejection of claims . . . . . . . . . . . . . . . . . . . . . . 341

Section 41

Determination of valuation of claims . . . . . . . . . . . . . . . . . . 342

Section 42

Appeal against the decision of liquidator. . . . . . . . . . . . . . . 342 –– The adjudicating authority can condone the delay and direct the liquidator to reconsider the claim on its merits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342

Section 43

Preferential transactions and relevant time . . . . . . . . . . . . . 343

Section 44

Orders in case of preferential transactions. . . . . . . . . . . . . . 345

Section 45

Avoidance of undervalued transactions . . . . . . . . . . . . . . . . 346

Section 46

Relevant period for avoidable transactions. . . . . . . . . . . . . . 347

Section 47

Application by creditor in cases of undervalued transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348

Section 48

Order in cases of undervalued transactions . . . . . . . . . . . . . 348

Section 49

Transactions defrauding creditors . . . . . . . . . . . . . . . . . . . . . 349 liv

Table of contents

Section 50

Extortionate credit transactions. . . . . . . . . . . . . . . . . . . . . . . 350

Section 51

Orders of Adjudicating Authority in respect of extortionate credit transactions . . . . . . . . . . . . . . . . . . . . . . . 350

Section 52

Secured creditor in liquidation proceedings . . . . . . . . . . . . 351 –– Income-tax Department does not enjoy the status of a secured creditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352

Section 53

Distribution of assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353 –– Tax dues comes within the sphere of Section 53(1)(e). . . 354 –– Income-tax Department cannot claim a priority in respect of clearance of tax dues in the event an assessee company is in liquidation . . . . . . . . . . . . . . . . . . . 354 –– Amount due to the person whose rights are prejudicially affected on account of the moratorium is to be included in the insolvency resolution process costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355 –– Any decision of the Adjudicating Authority relating to the ‘Gratutity Trust Fund’ should be treated as an observation not binding on any Court of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356

Section 54

Dissolution of corporate debtor. . . . . . . . . . . . . . . . . . . . . . . 357

CHAPTER IV FAST TRACK CORPORATE INSOLVENCY RESOLUTION PROCESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358 Section 55

Fast track corporation insolvency resolution process. . . . . 358

Section 56

Time period for completion of fast track corporate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . 359

Section 57

Manner of initiating fast track corporate insolvency resolution process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359

Section 58

Applicability of Chapter II to this Chapter. . . . . . . . . . . . . . 360

CHAPTER V VOLUNTARY LIQUIDATION OF CORPORATE PERSONS. . . . . . . 361 Section 59

Voluntary liquidation of corporate persons . . . . . . . . . . . . . 361

CHAPTER VI ADJUDICATING AUTHORITY FOR CORPORATE PERSONS. . . . 364 Section 60

Adjudicating Authority for corporate persons. . . . . . . . . . . 364 –– The High Court cannot grant injunction against a corporate debtor from institution of proceedings in NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365

Case Digest on Insolvency and Bankruptcy Code, 2016

–– Section 2(e) would apply only for limited purpose contained in Section 60(2) and (3). . . . . . . . . . . . . . . . . . . . –– Individual personal guarantors will continue to be proceeded against under the Insolvency Acts and not under the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –– It cannot be heard to say that the NCLT lacks jurisdiction to entertain or dispose of the issues. . . . . . . . –– It is not in the domain of the Adjudicating Authority to decide the requirement of minimum tangible net worth of one or other category of eligible Resolution Applicant. . . . . . . . . . . . . . . . . . . . . . . . –– The Adjudicating Authority is not the competent authority to pass any order for eviction. . . . . . . . . . . . . . . –– Including the property of the personal guarantor for liquidation is illegal. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

365

366 367

369 369 370

Section 61

Appeals and Appellate Authority. . . . . . . . . . . . . . . . . . . . . . 370 –– It cannot be heard to say that the NCLT lacks jurisdiction to entertain or dispose of the issues. . . . . . . . 371 –– Application for condonation of delay cannot be entertained if the ground taken in it is not satisfactory. . . 373 –– The Central Government cannot grant ninety days’ period to prefer an appeal under Section 61(1) which is contrary to Section 61(2) of the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 –– Any decision of the Adjudicating Authority relating to the ‘Gratutity Trust Fund’ should be treated as an observation not binding on any Court of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376 –– The IBBI have no locus standi to challenge the finding of the Adjudicating Authority, however, liberty can be given to the IBBI to inform the Resolution Professional to move appeal under Section 61 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377 –– The NCLAT cannot decide whether a landlord has right to pursue for recovery of arrears of rent after the period of moratorium ends. . . . . . . . . . . . . . . . . . . . . . . 378

Section 62

Appeal to Supreme Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . 379

Section 63

Civil court not to have jurisdiction. . . . . . . . . . . . . . . . . . . . . 379

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–– The Company Court does not have the jurisdiction to restrain NCLT from proceeding with IBC Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379 Section 64

Expeditious disposal of applications. . . . . . . . . . . . . . . . . . . 380 –– The Company Court does not have the jurisdiction to restrain NCLT, Ahmedabad, from proceeding with IBC Application. . . . . . . . . . . . . . . . . . . . . 381 –– Company Court has no power to injunct proceedings initiated before the NCLT. . . . . . . . . . . . . . . . 381 Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 –– Time limits prescribed under the Code for the Tribunal or Appellate Tribunal are directory . . . . . . . . . . . 382

Section 65

Fraudulent or malicious initiation of proceedings. . . . . . . . 384 –– In order to impose penalty under Section 65, the Adjudicating Authority has to form prima facie opinion that the person has filed the petition for initiation of proceeding “fraudulently” or with “malicious intent”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 –– ‘Power of Attorney Holder’ is not competent to file an application on behalf of a ‘Financial Creditor’ or ‘Operational Creditor’ or ‘Corporate Applicant’ . . . . . . 385 –– ‘Collusiveness’ can be proved to suggest that the insolvency resolution process was initiated with malicious intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387

Section 66

Fraudulent trading or wrongful trading . . . . . . . . . . . . . . . . 388 –– The Adjudicating Authority can direct the ex-Directors not to leave the country without prior permission of the Adjudicating Authority . . . . . . . . . . . . . 389

Section 67

Proceedings under section 66. . . . . . . . . . . . . . . . . . . . . . . . . 390 –– The Adjudicating Authority can direct the ex-Directors not to leave the country without prior permission of the Adjudicating Authority . . . . . . . . . . . . . 391

CHAPTER VII OFFENCES AND PENALTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393 Section 68

Punishment for concealment of property. . . . . . . . . . . . . . . 393

Section 69

Punishment for transactions defrauding creditors . . . . . . . 394

Section 70

Punishment for misconduct in course of corporate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . 395

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Section 71

Punishment for falsification of books of corporate debtor. 396

Section 72

Punishment for wilful and material omissions from statements relating to affairs of corporate debtor . . . . . . . . 396

Section 73

Punishment for false representations to creditors. . . . . . . . 397

Section 74

Punishment for contravention of moratorium or the resolution plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397

Section 75

Punishment for false information furnished in application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398

Section 76

Punishment for nondisclosure of dispute or payment of debt by operational creditor. . . . . . . . . . . . . . . . 398

Section 77

Punishment for providing false information in application made by corporate debtor. . . . . . . . . . . . . . . . . . 399 PART III

INSOLVENCY RESOLUTION AND BANKRUPTCY FOR INDIVIDUALS AND PARTNERSHIP FIRMS CHAPTER I

PRELIMINARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401

Eligibility for making an application. . . . . . . . . . . . . . . . . . . 405

Section 81

Application for fresh start order. . . . . . . . . . . . . . . . . . . . . . . 405

Section 82

Appointment of resolution professional. . . . . . . . . . . . . . . . 406

Section 83

Examination of application by resolution professional . . . 407

Section 84

Admission or rejection of application by Adjudicating Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408

Section 85

Effect of admission of application . . . . . . . . . . . . . . . . . . . . . 409

Section 86

Objections by creditor and their examination by resolution professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410

Section 87

Application against decision of resolution professional. . . 411

Section 88

General duties of debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411

Section 89

Replacement of resolution professional. . . . . . . . . . . . . . . . 412

Section 90

Directions for compliances of restrictions, etc. . . . . . . . . . . 412

Section 91

Revocation of order admitting application. . . . . . . . . . . . . . 413

Section 92

Discharge order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413 lviii

Table of contents

Section 93

Standard of conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414

CHAPTER III INSOLVENCY RESOLUTION PROCESS. . . . . . . . . . . . . . . . . . . . . . . . 415 Section 94

Application by debtor to initiate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415

Section 95

Application by creditor to initiate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415

Section 96 Interim-moratorium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416 –– Sections 96 and 101, when contrasted with section 14, would show that section 14 cannot possibly apply to a personal guarantor. . . . . . . . . . . . . . . . 417 Section 97

Appointment of resolution professional. . . . . . . . . . . . . . . . 418

Section 98

Replacement of resolution professional. . . . . . . . . . . . . . . . 419

Section 99

Submission of report by resolution professional. . . . . . . . . 420

Section 100 Admission or rejection of application. . . . . . . . . . . . . . . . . . 421 Section 101 Moratorium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 –– Sections 96 and 101, when contrasted with Section 14, would show that Section 14 cannot possibly apply to a personal guarantor. . . . . . . . . . . . . . . . 422 Section 102 Public notice and claims from creditors . . . . . . . . . . . . . . . . 423 Section 103 Registering of claims by creditors . . . . . . . . . . . . . . . . . . . . . 424 Section 104 Preparation of list of creditors. . . . . . . . . . . . . . . . . . . . . . . . . 424 Section 105 Repayment plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424 Section 106 Report of resolution professional on repayment plan. . . . 425 Section 107 Summoning of meeting of creditors . . . . . . . . . . . . . . . . . . . 426 Section 108 Conduct of meeting of creditors. . . . . . . . . . . . . . . . . . . . . . . 426 Section 109 Voting rights in meeting of creditors. . . . . . . . . . . . . . . . . . . 427 Section 110 Rights of secured creditors in relation to repayment plan. 427 Section 111 Approval of repayment plan by creditors. . . . . . . . . . . . . . . 428 Section 112 Report of meeting of creditors on repayment plan. . . . . . . 428 Section 113 Notice of decisions taken at meeting of creditors . . . . . . . . 429 Section 114 Order of Adjudicating Authority on repayment plan. . . . . 429 Section 115 Effect of order of Adjudicating Authority on repayment plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429 Section 116 Implementation and supervision of repayment plan . . . . . 430 Section 117 Completion of repayment plan. . . . . . . . . . . . . . . . . . . . . . . . 430 lix

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Section 118 Repayment plan coming to end prematurely. . . . . . . . . . . . 431 Section 119 Discharge order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431 Section 120 Standard of conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432 CHAPTER IV BANKRUPTCY ORDER FOR INDIVIDUALS AND PARTNERSHIP FIRMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Section 121 Application for bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Section 122 Application by debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Section 123 Application by creditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434 Section 124 Effect of application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435 Section 125 Appointment of insolvency professional as bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436 Section 126 Bankruptcy order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436 Section 127 Validity of bankruptcy order. . . . . . . . . . . . . . . . . . . . . . . . . . 437 Section 128 Effect of bankruptcy order. . . . . . . . . . . . . . . . . . . . . . . . . . . . 437 Section 129 Statement of financial position. . . . . . . . . . . . . . . . . . . . . . . . 438 Section 130 Public notice inviting claims from creditors. . . . . . . . . . . . . 438 Section 131 Registration of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 439 Section 132 Preparation of list of creditors. . . . . . . . . . . . . . . . . . . . . . . . . 439 Section 133 Summoning of meeting of creditors . . . . . . . . . . . . . . . . . . . 439 Section 134 Conduct of meeting of creditors. . . . . . . . . . . . . . . . . . . . . . . 440 Section 135 Voting rights of creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440 Section 136 Administration and distribution of estate of bankrupt. . . . 441 Section 137 Completion of administration . . . . . . . . . . . . . . . . . . . . . . . . 441 Section 138 Discharge order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441 Section 139 Effect of discharge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 Section 140 Disqualification of bankrupt. . . . . . . . . . . . . . . . . . . . . . . . . . 442 Section 141 Restrictions on bankrupt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443 Section 142 Modification or recall of bankruptcy order. . . . . . . . . . . . . . 444 Section 143 Standard of conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 Section 144 Fees of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 445 Section 145 Replacement of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . 445 Section 146 Resignation by bankruptcy trustee . . . . . . . . . . . . . . . . . . . . 446 Section 147 Vacancy in office of bankruptcy trustee. . . . . . . . . . . . . . . . . 447 Section 148 Release of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . 448 lx

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CHAPTER V ADMINISTRATION AND DISTRIBUTION OF THE ESTATE OF THE BANKRUPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449 Section 149 Functions of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . 449 Section 150 Duties of bankrupt towards bankruptcy trustee . . . . . . . . . 449 Section 151 Rights of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . 450 Section 152 General powers of bankruptcy trustee . . . . . . . . . . . . . . . . . 450 Section 153 Approval of creditors for certain acts. . . . . . . . . . . . . . . . . . . 451 Section 154 Vesting of estate of bankrupt in bankruptcy trustee. . . . . . 452 Section 155 Estate of bankrupt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 Section 156 Delivery of property and documents to bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 Section 157 Acquisition of control by bankruptcy trustee. . . . . . . . . . . . 453 Section 158 Restrictions on disposition of property. . . . . . . . . . . . . . . . . 453 Section 159 After-acquired property of bankrupt. . . . . . . . . . . . . . . . . . . 453 Section 160 Onerous property of bankrupt. . . . . . . . . . . . . . . . . . . . . . . . 454 Section 161 Notice to disclaim onerous property. . . . . . . . . . . . . . . . . . . 455 Section 162 Disclaimer of leaseholds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 Section 163 Challenge against disclaimed property. . . . . . . . . . . . . . . . . 456 Section 164 Undervalued transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 457 Section 165 Preference transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458 Section 166 Effect of order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459 Section 167 Extortionate credit transactions. . . . . . . . . . . . . . . . . . . . . . . 460 Section 168 Obligations under contracts. . . . . . . . . . . . . . . . . . . . . . . . . . 461 Section 169 Continuance of proceedings on death of bankrupt. . . . . . . 461 Section 170 Administration of estate of deceased bankrupt. . . . . . . . . . 462 Section 171 Proof of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462 Section 172 Proof of debt by secured creditors. . . . . . . . . . . . . . . . . . . . . 463 Section 173 Mutual credit and set-off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463 Section 174 Distribution of interim dividend . . . . . . . . . . . . . . . . . . . . . . 464 Section 175 Distribution of property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464 Section 176 Final dividend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465 Section 177 Claims of creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 Section 178 Priority of payment of debts. . . . . . . . . . . . . . . . . . . . . . . . . . 467

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CHAPTER VI ADJUDICATING AUTHORITY FOR INDIVIDUALS AND PARTNERSHIP FIRMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 Section 179 Adjudicating Authority for individuals and partnership firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 Section 180 Civil court not to have jurisdiction. . . . . . . . . . . . . . . . . . . . . 469 Section 181 Appeal to Debt Recovery Appellate Tribunal. . . . . . . . . . . . 470 Section 182 Appeal to Supreme Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . 470 Section 183 Expeditious disposal of applications. . . . . . . . . . . . . . . . . . . 470 CHAPTER VII OFFENCES AND PENALTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 Section 184 Punishment for false information, etc., by creditor in insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . 471 Section 185 Punishment for contravention of provisions . . . . . . . . . . . . 471 Section 186 Punishment for false information, concealment, etc., by bankrupt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 Section 187 Punishment for certain actions. . . . . . . . . . . . . . . . . . . . . . . . 473 PART IV

REGULATION OF INSOLVENCY PROFESSIONALS, AGENCIES AND INFORMATION UTILITIES CHAPTER I

THE INSOLVENCY AND BANKRUPTCY BOARD OF INDIA. . . . . 475

Section 188 Establishment and incorporation of Board . . . . . . . . . . . . . 475 Section 189 Constitution of Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476 Section 190 Removal of member from office. . . . . . . . . . . . . . . . . . . . . . . 477 Section 191 Powers of Chairperson. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 477 Section 192 Meetings of Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 478 Section 193 Member not to participate in meetings in certain cases. . . 478 Section 194 Vacancies, etc., not to invalidate proceedings of Board, Officers and employees of Board. . . . . . . . . . . . . . . . 478 Section 195 Power to designate financial sector regulator. . . . . . . . . . . . 479 CHAPTER II POWERS AND FUNCTIONS OF THE BOARD. . . . . . . . . . . . . . . . . . 480 Section 196 Powers and functions of Board. . . . . . . . . . . . . . . . . . . . . . . . 480 Section 197 Constitution of advisory committee, executive committee or other committee. . . . . . . . . . . . . . . . . . . . . . . . 484 Section 198 Condonation of delay. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 484

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CHAPTER III INSOLVENCY PROFESSIONAL AGENCIES . . . . . . . . . . . . . . . . . . . . 485 Section 199 No person to function as insolvency professional agency without valid certificate of registration.. . . . . . . . . . 485 Section 200 Principles governing registration of insolvency professional agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 485 Section 201 Registration of insolvency professional agency. . . . . . . . . . 486 Section 202 Appeal to National Company Law Appellate Tribunal. . . . 487 Section 203 Governing Board of insolvency professional agency. . . . . . 487 Section 204 Functions of insolvency professional agencies. . . . . . . . . . . 487 Section 205 Insolvency professional agencies to make bye-laws . . . . . . 488 CHAPTER IV INSOLVENCY PROFESSIONALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489 Section 206 Enrolled and registered persons to act as insolvency professionals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489 Section 207 Registration of insolvency professionals. . . . . . . . . . . . . . . . 489 –– Reputation and character of the Applicant is a material consideration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489 –– Pendency of serious charge against the applicant can be ground for rejection of application for registration as an Insolvency Professional . . . . . . . . . . . . . 490 Section 208 Functions and obligations of insolvency professionals. . . . 493 CHAPTER V INFORMATION UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495 Section 209 No person to function as information utility without certificate of registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495 Section 210 Registration of information utility. . . . . . . . . . . . . . . . . . . . . 495 Section 211 Appeal to National Company Law Appellate Tribunal. . . . 496 Section 212 Governing Board of information utility. . . . . . . . . . . . . . . . . 496 Section 213 Core services, etc., of information utilities. . . . . . . . . . . . . . 497 Section 214 Obligations of information utility . . . . . . . . . . . . . . . . . . . . . 497 Section 215 Procedure for submission, etc., of financial information . . 498 Section 216 Rights and obligations of persons submitting financial information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498 CHAPTER V INSPECTION AND INVESTIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . 499 Section 217 Complaints against insolvency professional agency or its member or information utility. . . . . . . . . . . . . . . . . . . 499

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Section 218 Investigation of insolvency professional agency or its member or information utility . . . . . . . . . . . . . . . . . . . . . 499 Section 219 Show cause notice to insolvency professional agency or its member or information utility . . . . . . . . . . . . 500 Section 220 Appointment of disciplinary committee. . . . . . . . . . . . . . . . 501 CHAPTER VII FINANCE, ACCOUNTS AND AUDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . 503 Section 221 Grants by Central Government . . . . . . . . . . . . . . . . . . . . . . . 503 Section 222 Board’s Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503 Section 223 Accounts and audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504 PART V

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–– Maharashtra Act cannot stand in the way of the corporate insolvency resolution process under the Code.512 –– Section 238 would apply when there is inconsistency between the Code and the Arbitration Act.513 –– Action taken by a ‘Financial Creditor’ under section 13(4) of the SARFAESI Act, 2002 against the Corporate Debtor or a suit pending against Corporate Debtor under section 19 of DRT Act, 1993 cannot be a ground to reject an application under section 10. . . . . . . . . . . . . . . . . . . . . . . . . 513 –– The provisions of ‘Gujarat Electricity Regulatory Commission (Electricity Supply Code and related matters) Regulations, 2015’ cannot override the provision of section 31 of the Code. . . . . . . . . . . . . . . . . . . 514 –– Company petition pending before the High Court cannot be proceeded with further in view of section 238 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515 Section 238A Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516 –– The Limitation Act is applicable to the Insolvency and Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516 –– Section 238A to be construed as being retrospective . . . . 516 Section 239 Power to make rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517 Section 240 Power to make regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . 520 –– The regulations made by the Board cannot override the provisions of the Code . . . . . . . . . . . . . . . . . . 527 Section 240A Application of this Code to micro, small and medium enterprises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 528 Section 241 Rules and regulations to be laid before Parliament. . . . . . . 529 Section 242 Power to remove difficulties. . . . . . . . . . . . . . . . . . . . . . . . . . 529 –– The inclusion of the Eighth Schedule to the Code is in exercise of powers under section 242 and section 252 and is thus not ultra vires. . . . . . . . . . . . . . . . . 530 Section 243 Repeal of certain enactments and savings. . . . . . . . . . . . . . . 531 Section 244 Transitional provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533 Section 245 Amendments of Act 9 of 1932 . . . . . . . . . . . . . . . . . . . . . . . . 533 Section 246 Amendments of Act 1 of 1944 . . . . . . . . . . . . . . . . . . . . . . . . 534 Section 247 Amendments of Act 43 of 1961 . . . . . . . . . . . . . . . . . . . . . . . 534

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Section 248 Amendments of Act 52 of 1962 . . . . . . . . . . . . . . . . . . . . . . . 534 Section 249 Amendments of Act 51 of 1993 . . . . . . . . . . . . . . . . . . . . . . . 534 Section 250 Amendments of Act 32 of 1994 . . . . . . . . . . . . . . . . . . . . . . . 534 Section 251 Amendments of Act 54 of 2002 . . . . . . . . . . . . . . . . . . . . . . . 535 –– The appellant cannot take steps under section 13(4) of the SARFAESI Act, 2002 or D.R.T. Act, 1985 because it is ‘Financial Creditor’ of ‘Corporate Debtor’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535 Section 252 Amendments of Act 1 of 2004 . . . . . . . . . . . . . . . . . . . . . . . . 535 –– The proceedings under SICA would not survive and would abate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535 –– IBC has primacy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536 –– Whether legislature fixes a cut-off date or leaves it to the executive to prescribe a cut-off date and same is prescribed, the legislative or the executive action per se is not violative of Article 14 or arbitrary. . . . 536 –– Provisions of IBC should prevail over the provisions of the Companies Act, 2013. . . . . . . . . . . . . . . . 537 –– The provision to apply for reconstruction or to have a scheme sanctioned for reconstruction is to be only provided by law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 537 –– The 4th proviso of section 4(b) deals with cases where schemes have been sanctioned and appeals contesting the sanction have not been filed. . . . . . . . . . . . 538 –– The classification made, differentiating between cases where schemes stand sanctioned under section 18(4) and (12) of the SIC Act and where the draft scheme for rehabilitation were pending consideration, is a valid classification. . . . . . . . . . . . . . . . . 539 –– Sanctioned rehabilitation schemes have been treated as schemes deemed to have been sanctioned under section 31(1) of the Code. . . . . . . . . . . . 541 –– The inclusion of the Eighth Schedule to the Code is in exercise of powers under section 242 and section 252 and is thus not ultra vires. . . . . . . . . . . . . . . . . 542 –– If the scheme sanctioned under section 18(4) of SICA Act, 1985 is treated to be a scheme sanctioned under section 31(1) of the Code, no relief can be granted to the appellant in absence of lxvi

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any provision of review of the scheme sanctioned under section 31(1) of the Code. . . . . . . . . . . . . . . . . . . . . . 544 Section 253 Amendments of Act 51 of 2007 . . . . . . . . . . . . . . . . . . . . . . . 544 Section 254 Amendments of Act 6 of 2009 . . . . . . . . . . . . . . . . . . . . . . . . 544 Section 255 Amendment of Act 18 of 2013. . . . . . . . . . . . . . . . . . . . . . . . 544 –– “Winding up” under the Companies Act, 2013 has to be treated as “liquidation” under the Code . . . . . . . . . . 545 –– Application under section 10 cannot be filed where winding up proceedings has already been initiated by the High Court or Tribunal. . . . . . . . . . . . . . . . 546 THE FIRST SCHEDULE AMENDMENT TO THE INDIAN PARTNERSHIP ACT, 1932. . . . . . . . . . 548 THE SECOND SCHEDULE AMENDMENT TO THE CENTRAL EXCISE ACT, 1944 . . . . . . . . . . . . . . . 549 THE THIRD SCHEDULE AMENDMENT TO THE INCOME-TAX ACT, 1961. . . . . . . . . . . . . . . . . . . 549 THE FOURTH SCHEDULE AMENDMENT TO THE CUSTOMS ACT, 1962 . . . . . . . . . . . . . . . . . . . . . 549 THE FIFTH SCHEDULE AMENDMENT TO THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 . . . . . . . . . . . . . . . . . . . . . . 550 THE SIXTH SCHEDULE AMENDMENT TO THE FINANCE ACT, 1994. . . . . . . . . . . . . . . . . . . . . . . 551 THE SEVENTH SCHEDULE AMENDMENT TO THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002. . . . . . . . . . . . . . . 552 THE EIGHTH SCHEDULE AMENDMENT TO THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) REPEAL ACT, 2003. . . . . . . . . . . . . . . . . . . . . . . 552

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THE NINTH SCHEDULE AMENDMENT TO THE PAYMENT AND SETTLEMENT SYSTEMS ACT, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553 THE TENTH SCHEDULE AMENDMENT TO THE LIMITED LIABILITY PARTNERSHIP ACT, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 554 THE ELEVENTH SCHEDULE AMENDMENTS TO THE COMPANIES ACT, 2013. . . . . . . . . . . . . . . . . . . 554 THE TWELFTH SCHEDULE ACTS FOR THE PURPOSES OF CLAUSE (d) OF SECTION 29A . . . . . . . 567

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Table of cases – section-wise, topic-wise PART I

PRELIMINARY Section 1 Short title, extent and commencement Section 2 Application Section 2(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 –– Section 2(e) would apply only for limited purpose contained in section 60(2) and (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 State Bank of India v V. Ramakrishnan and Ors., AIR 2018 SC 3876 . . . 2 Section 3 Definitions Section 3(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 –– Treatment of Home Buyers under IBC. . . . . . . . . . . . . . . . . . . . . . . . . . 8 Col. Vinod Awasthi v AMR Infrastructure Ltd NCLT Principal Bench, C.P. No. (IB)-10(PB)/2017. . . . . . . . . . . . . . . . . . . . . . 8 –– Home buyers having agreement with assured return clause treated as financial creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Nikhil Mehta v A M R Infrastructure Ltd, NCLAT, Company Appeal (AT) (Insolvency) No. 07 of 2017. . . . . . . . . . . . . . . 8 –– Home buyers without assured returns clause. . . . . . . . . . . . . . . . . . . . 8 Pawan Dubey v M/s JBK Developers Private Limited, NCLAT, Company Appeal (AT) (Insolvency) No. 40 of 2017. . . . . . . . 9 Pawan Dubey v M/s JBK Developers Private Limited, Civil Appeal No. 11197 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 3(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 –– Committed return plan is in the nature of ‘debt’ . . . . . . . . . . . . . . . . . 9 Nikhil Mehta & Sons v AMR Infrastructure Ltd., ([2017]143SCL278, MANU/NL/0041/2017, [2017]141CLA281, III(2017)BC61. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Followed in: Anil Mahindroo v Earth Iconic Infrastructure (P) Ltd., (IV(2017)BC128, MANU/NL/0055/2017. . 9 lxix

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–– An application under section 9 is not maintainable on the basis of claims for entitlement of interest . . . . . . . . . . . . . . . . . . . . . . . 9 Krishna Enterprises v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 144 of 2018, . . . . . . . . . . . . . . . . . . . . . 10 Om Industrial Corporation v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 145 of 2018, . . . . . . . . . . . . 10 Swastik Enterprises v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 146 of 2018, . . . . . . . . . . . . . . . . . . . . . 10 Orissa Sales v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 147 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 –– Part of the dues comes within the meaning of ‘debt’ once it becomes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Anil Nanda v Hari Kishan Sharma & Ors., Company Appeal (AT) (Insolvency) No. 167 of 2018. . . . . . . . . . . . . . . . . . . . . . 10 Section 3(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 –– Default triggers Insolvency Resolution Process. . . . . . . . . . . . . . . . . 10 Innoventive Industries Ltd v ICICI Bank, AIR 2017 SC 4084, 2017 (11) SCALE 4, (2018) 1 SCC 407, III (2017) BC 632 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Bank of India v Tirupati Infraprojects Pvt Ltd, (NCLT, Principal Bench), C.P. No. IB-104(PB)/2017. . . . . . . . . . . . . . . . . . . . . 11 –– Default takes place when debt becomes due and is not paid. . . . . . 11 Innoventive Industries Ltd v ICICI Bank, AIR 2017 SC 4084, 2017 (11) SCALE 4, (2018) 1 SCC 407, III (2017) BC 632 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 –– Position of Debt kept in Abeyance or Suspended Debt. . . . . . . . . . . 11 Innoventive Industries Ltd v ICICI Bank, AIR 2017 SC 4084, 2017 (11) SCALE 4, (2018) 1 SCC 407, III (2017) BC 632 (SC), para 56. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 –– The Adjudicating Authority has to merely satisfy itself that a default has occurred, in case of a corporate debtor who commits a default of a financial debt. . . . . . . . . . . . . . . . . . . . . . . . . . 11 Innoventive Industries Ltd. v ICICI Bank & Anr., AIR 2017 SC 4084. . 12 –– Section 3(12) is in the context of actual non-payment by the corporate debtor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 BK Educational Services Private Limited v Parag Gupta and Associates, AIR 2018 SC 5601 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 –– Different claim(s) cannot be clubbed together for alleged default of debt, the cause of action being separate. . . . . . . . . . . . . . . 12 lxx

Table of cases – section-wise, topic-wise

International Road Dynamics South Asia Pvt. Ltd. v Reliance Infrastructure Ltd., Company Appeal (AT) (Insolvency) No. 72 of 2017,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 International Road Dynamics South Asia Pvt. Ltd. v D.A. Toll Road Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 77 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 –– Insolvency resolution process begins when a default takes place. . 12 Innoventive Industries Ltd. v ICICI Bank & Anr., AIR 2017 SC 4084, III (2017) BC 632 (SC), [2017] 205 CompCas 57 (SC), (2017) 4 CompLJ 193(SC), [2017] 140 CLA 39 (SC) . . . . . . 14 Followed in: Mahesh Kumar Sureka v SBER Bank & Ors., (2018)208CompCas21, (2018)3CompLJ205, (2018)144CLA339, MANU/NL/0063/2018. . . . . . . . . . . . . . . . . . . 14 J.P. Engineers Private Limited v Murti Udyog Limited, Company Appeal (AT) (Insolvency) No. 321 of 2017. . . . . . . . . . . 14 Mack Soft Tech Pvt. Ltd. v Quinn Logistics India Ltd., Company Appeal (AT) (Insolvency) No. 143 of 2017. . . . . . . . . . . 14 Logvis AG v Quinn Logistics India Ltd., Company Appeal (AT) (Insolvency) No. 175 of 2017. . . . . . . . . . . . . . . . . . . . 14 Mecon FZE v Quinn Logistics India Ltd., Company Appeal (AT) (Insolvency) No. 176 of 2017. . . . . . . . . . . . . . . . . . . . 14 K. Kesava v Ajay Gopaldas Samat (HUF) & Ors,. (IV(2018)BC113, MANU/NL/0162/2018. . . . . . . . . . . . . . . . . . . . . 14 Jagmohan Bajaj v Shivam Fragrances Private Limited & Anr., [2018]210CompCas84, [2018]146CLA240, MANU/NL/0197/2018, 2018]149SCL598. . . . . . . . . . . . . . . . . . . . 14 Avance Logistics & Trading India Private Limited v Bell Finvest (India) Limited, Company Appeal (AT) (Insolvency) No. 07 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Nayan Shah v Viral Rajarashi Mehta & Anr., Company Appeal (AT) (Insolvency) No. 307 of 2018. . . . . . . . . . . . . . . . . . . . 14 Aditya Enterprises v Rajratan Exim Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 335 of 2018. . . . . . . . . . . . . . . . . . . . 15 Axis Bank Ltd. v Lotus Three Developments Ltd. & Ors., IV (2018) BC 92, (2018) 210 CompCas 110, (2018) 146 CLA 207, MANU/NL/0179/2018. . . . . . . . . . . . . . . . . . 15 V. R. Hemantraj v Stanbic Bank Ghana Ltd. & Anr., IV (2018) BC 143, [2018] 210 CompCas 516, [2018] 147 CLA 35, MANU/NL/0265/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Keltech Infrastructure Ltd. v Aaj Finance & Credit Ltd., Company Appeal (AT) (Insolvency) No. 580 of 2018. . . . . . . . . . . 15 lxxi

Case Digest on Insolvency and Bankruptcy Code, 2016

Marg Limited v Tata Capital Financial Services Ltd., Company Appeal (AT) (Insolvency) No. 219 of 2018. . . . . . . . . . . 15 –– Amount not released due to misunderstanding cannot be treated to be default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 R. Sridharan v Assets Care & Reconstruction Enterprise Ltd., (ACRE) (IV(2018)BC157, MANU/NL/0169/2018). . . . . . . . . . . 15 PART II

INSOLVENCY RESOLUTION AND LIQUIDATION FOR CORPORATE PERSONS CHAPTER I

PRELIMINARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Section 4 Application of this Part

–– Application not maintainable where disputed claim is less than one lakh rupees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Ms. Vidul Sharma v Technopak Advisors Pvt. Ltd., (NCLAT), Company Appeal (AT) (Insol.) No. 131 of 201. . . . . . . . . 17 –– Once the default in terms of Rule 3(12) of IBC is established and all other requirements are fulfilled, the Insolvency Resolution Process must be triggered . . . . . . . . . . . . . . . 18 Bank of India v Tirupati Infraprojects Pvt. Ltd., NCLT, Principal Bench, C.P. No. IB-104(PB)/2017 . . . . . . . . . . . . . . . . . . . . . 18 State Bank of India v Bhushan Steel Limited, Principal Bench, NCLT, C.P. No. IB-201(PB)/2017. . . . . . . . . . . . . . . . . . . . . . . . 18 –– Tribunal is not required to determine the amount of default. . . . . . 18 IFCI Limited v ERA Housing & Developers (India) Limited, CP No. (IB) 489(PB)/2017, Principal Bench NCLT. . . . . . . . 18 CHAPTER II CORPORATE INSOLVENCY RESOLUTION PROCESS. . . . . . . . . . . . 19 Section 5 Definitions Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 –– Tribunal is guided by section 424 of the Companies Act, 2013. . . . 27 Sree Metaliks Limited v UOI, [2017] 203 Comp Cas 442 (Cal)] . . . . . . 27 Innoventive Industries Limited v ICICI Bank, [2017] 139 CLA 335, III (2017) BC 33, [2017] 205 CompCas 23. . . . . . . . . . . . . . 27 –– No reliance can be placed on the National Company Law Tribunal Rules, 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 lxxii

Table of cases – section-wise, topic-wise

Palogix Infrastructure Private Limited v ICICI Bank Limited, NCLAT, Company Appeal (AT) (Insol.) No. 30, 37 and 54 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Sub-section (6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 –– Definition of “dispute” is an inclusive one. . . . . . . . . . . . . . . . . . . . . . 27 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, 2017 6 AWC 5658 SC, IV (2017) BC 445 (SC), [2017] 205 CompCas 324 (SC), (2017) 4 CompLJ 255 (SC), [2017] 140 CLA 123 (SC), [2017] 140 CLA 123 (SC), MANU/SC/1196/2017, 2018 (1) RCR (Civil) 725, [2017] 144 SCL 37 (SC), 2017 (11) SCALE 754, (2018) 1 SCC 353, 2017(9)SCJ 300. . . . . . . . . . . . . . 28 –– The scheme of the Code is to ensure that the insolvency resolution process begins when a default takes place. . . . . . . . . . . . 28 Innoventive Industries Ltd. v ICICI Bank & Anr., AIR 2017 SC 4084, III (2017) BC 632 (SC), [2017] 205 CompCas 57 (SC), (2017) 4 CompLJ 193(SC), [2017] 140 CLA 39 (SC), 2017 (5) CTC 725, MANU/SC/1063/2017, [2017] 143 SCL 625 (SC), 2017(11)SCALE 4, (2018) 1 SCC 407, (2018) 1 WBLR (SC) 446. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Followed in: Mahesh Kumar Sureka v SBER Bank & Ors., [2018]208CompCas21, (2018)3CompLJ205, [2018]144CLA339, MANU/NL/0063/2018. . . . . . . . . . . . . . . . . . . 29 J.P. Engineers Private Limited v Murti Udyog Limited, Company Appeal (AT) (Insolvency) No. 321 of 2017. . . . . . . . . . . 29 Mack Soft Tech Pvt. Ltd. v Quinn Logistics India Ltd., Company Appeal (AT) (Insolvency) No. 143 of 2017. . . . . . . . . . . 29 Logvis AG v Quinn Logistics India Ltd., Company Appeal (AT) (Insolvency) No. 175 of 2017. . . . . . . . . . . . . . . . . . . . 29 Mecon FZE v Quinn Logistics India Ltd., Company Appeal (AT) (Insolvency) No. 176 of 2017. . . . . . . . . . . . . . . . . . . . 29 K. Kesava v Ajay Gopaldas Samat (HUF) & Ors., IV(2018)BC113, MANU/NL/0162/2018 . . . . . . . . . . . . . . . . . . . . . 30 Jagmohan Bajaj v Shivam Fragrances Private Limited & Anr.,[2018]210CompCas84, [2018]146CLA240, MANU/NL/0197/2018, [2018]149SCL598 . . . . . . . . . . . . . . . . . . . 30 Avance Logistics & Trading India Private Limited v Bell Finvest (India) Limited, Company Appeal (AT) (Insolvency) No. 07 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

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Nayan Shah v Viral Rajarashi Mehta & Anr., Company Appeal (AT) (Insolvency) No. 307 of 2018. . . . . . . . . . . . . . . . . . . . Aditya Enterprises v Rajratan Exim Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 335 of 2018. . . . . . . . . . . . . . . . . . . . Axis Bank Ltd. v Lotus Three Developments Ltd. & Ors., IV (2018) BC 92, [2018] 210 CompCas 110, [2018] 146 CLA 207, MANU/NL/0179/2018. . . . . . . . . . . . . . . . . . V. R. Hemantraj v Stanbic Bank Ghana Ltd. & Anr., IV (2018) BC 143, [2018] 210 CompCas 516, [2018] 147 CLA 35, MANU/NL/0265/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Keltech Infrastructure Ltd. v Aaj Finance & Credit Ltd., Company Appeal (AT) (Insolvency) No. 580 of 2018. . . . . . . . . . . Marg Limited v Tata Capital Financial Services Ltd., Company Appeal (AT) (Insolvency) No. 219 of 2018. . . . . . . . . . .

30 30

30 30 30

–– Disputes in the form of suit or arbitration proceedings must relate to one of the three sub-clauses either directly or indirectly. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, [2017] 205 CompCas 324 (SC), 2017 (11) SCALE 754, (2017) 4 CompLJ 255 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 –– Counter claim is not a dispute relating to financial debt. . . . . . . . . . 31 SR Polyfab Private Limited v Sadbhav Enterprises Private Limited, Ahmedabad, NCLT, CP(IB) No. 115/7/NCLT/AHM/2017.31 –– Dispute should truly exists in facts and the grounds for alleging the existence of a dispute are real and not spurious, hypothetical, illusory or misconceived. . . . . . . . . . . . . . . . 32 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, [2017] 205 CompCas 324 (SC), 2017 (11) SCALE 754, (2017) 4 CompLJ 255 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 –– Dispute must be pre-existing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Kirusa Software Private Ltd. v Mobilox Innovations Private Ltd., [2017] 203 Comp Cas 33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Philips India Limited v Goodwill Hospital & Research Centre Ltd., [2017] 139 CLA 208, [2017] 142 SCL 208. . . . . . . . . . . . 32 Uttam Galva Steels Limited v DF Deutsche Forfait, Company Appeal (AT) (Insolvency) 39 of 2017 . . . . . . . . . . . . . . . . . 33 Sunline Suppliers Private Limited v Infinity Fab Engineering Company Private Limited, NCLT - Bengaluru. . . . . . . . 33 lxxiv

Table of cases – section-wise, topic-wise

DF Deutsche Forfait AG and Ors. v Uttam Galva Steel Ltd., [2017] 141 SCL 392. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 –– Dispute should not be patently feeble legal argument or an assertion of fact unsupported by evidence. . . . . . . . . . . . . . . . . . . . . . 33 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, [2017] 205 CompCas 324 (SC), 2017 (11) SCALE 754, (2017) 4 CompLJ 255 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 –– Breach of trust and Breach of terms of Non-Disclosure Agreement is a dispute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, [2017] 205 CompCas 324 (SC), 2017 (11) SCALE 754, (2017) 4 CompLJ 255 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 –– Period of Limitation for filing dispute need to be taken into consideration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, [2017] 205 CompCas 324 (SC), 2017 (11) SCALE 754, (2017) 4 CompLJ 255 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 –– Pendency of the suit is to be demonstrated by the corporate debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, [2017] 205 CompCas 324 (SC), 2017 (11) SCALE 754, (2017) 4 CompLJ 255 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 –– Importing “bona fide” into section 8(2)(a) so as to judge whether a dispute exists or not is difficult. . . . . . . . . . . . . . . . . . . . . . 35 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 –– Tribunal has a responsibility to look into the nature of dispute. . . . 35 Sunline Suppliers Private Limited v Infinity Fab Engineering Company Private Limited, Bengaluru Bench, NCLT, CP (IB) No. 03/BB/17. . . . . . . . . . . . . . . . . . . . . . . . . . . 36 –– Before discussing the case and claim of the parties and the provision of law, the Adjudicating Authority cannot express and open its mind. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Annapurna Infrastructure Private Limited v SORIL Infra Resources Limited, [2017] 139 CLA 150. . . . . . . . . . . . . . . . . . . . . . . . 36 lxxv

Case Digest on Insolvency and Bankruptcy Code, 2016

–– Application pending under section 34 or Appeal under section 37 of the Arbitration Act, 1996 is not a dispute. . . . . . . . . . . 36 Annapurna Infrastructure Private Limited v SORIL Infra Resources Limited, [2017] 139 CLA 150. . . . . . . . . . . . . . . . . . . . . . . . 37 Vijay Nirman Company Private Limited v Ksheeraabd Constructions Private Limited, Hyderabad Bench, NCLT, CP(IB) No. 100/9/HDB/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . 37 –– Documents in proof of dispute must be signed by and certified by an authorised person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Sunline Suppliers Private Limited v Infinity Fab Engineering Company Private Limited Bengaluru Bench, NCLT, CP (IB) No. 03/BB/17. . . . . . . . . . . . . . . . . . . . . . . . . . . 37 –– Dispute should not be a mere eyewash and an attempt to derail the entitlement to initiate the present proceedings . . . . . . . . 37 Simplex Infrastructures Limited v Agrante Infra Limited, New Delhi Bench II, NCLT, IB No. (IB), 167(ND)/2017 . . . . . . . . . . . 38 –– When dispute raised held to be illusory. . . . . . . . . . . . . . . . . . . . . . . . 38 Billets Elektro Werke Private Limited v Tryst Industries Private Limited, New Delhi Bench II, NCLT, IB No. (IB), 257(ND)/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Tryst Industries Private Limited v Billets Elektro Werke Private Limited (NCLAT), Company Appeal (AT) (Insolvency) No. 199 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 –– An understanding cannot be treated as dispute as to the existence of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Bhagwati Corporation v Shrinidhi Laminates Limited, (NCLT, Ahmedabad Bench), C.P. IB No. 75/9/NCLT/AHM/2017 . . 38 –– Onus to prove oral settlement claimed by corporate debtor lies on the corporate debtor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 M Y Agro Private Limited v Amira Pure Foods Private Limited (NCLT – New Delhi Bench II), IB No. (IB) – 211(ND)/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 –– Creditor cannot rely on different facts in Appeal to suggest that there is no dispute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Design Worx Infrastructure India Pvt. Ltd. v Premier Restaurants Private Ltd. (NCLAT), Company Appeal (AT) (Ins) No. 73 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 –– Mere existence of Arbitration Clause in Agreement does not prove existence of dispute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 lxxvi

Table of cases – section-wise, topic-wise

Achenbach Buschhutten CmbH & Co. Appellant v Arcotech Ltd, NCLAT, Company Appeal (AT) (Insolvency) No. 97 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 –– For financial debt, even if there is a dispute, it does not matter so long as the debt is due. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Innoventive Industries Limited v ICICI Bank, [2017] 139 CLA 335, LNIND 2017 SC 440. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 –– Existence of Dispute upheld despite Resolution of Dispute as to quality of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 United Motors Heavy Equipment Private Limited v Sundaram Industries Private Limited, NCLAT, Company Appeal (AT) (Insolvency) No. 118 of 2017. . . . . . . . . . . . . . . . . . . . . . 40 –– Reply to demand notice under section 8 cannot be taken into consideration for holding that there is a dispute in existence . 40 K. Raghavendra Rao v Lakshmi Vilas Bank, NCLAT, Company Appeal (AT) (Insolvency) No. 189 of 2017. . . . . . . . . . . . . 40 –– Any observations by court of law do not amount to ‘existence of dispute’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Yogendra Yasupal v Jigsaw Solutions and another, NCLAT, Company Appeal (AT) (Insolvency) No. 222 of 2017. . . . . . . . . . . . . 40 –– Whether the Police Complaint for criminal breach of trust, cheating, falsification of accounts and fabrication of documents can be treated to be as a ‘dispute in existence’. . . . . . . . 41 Paramjeet Singh v Maxim Tubes Company Pvt. Ltd., NCLAT in Company Appeal (AT) (Insolvency) No. 150 of 2017. . . . 41 Sub-section (7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 –– Financial Creditor is a person who has right to a financial debt . . . 41 Nikhil Mehta and Sons v AMR Infrastructure Ltd., Company Appeal (AT) (Insolvency) No. 07 of 2017. . . . . . . . . . . . . . 41 –– Refusal to take documents in consideration filed subsequent to the order being reserved. . . . . . . . . . . . . . . . . . . . . . . . 42 JP Engineers Private Limited v Indo Alusys Industries Ltd, New Delhi Bench III, (IB) 203(ND)/2017. . . . . . . . . . . . . . . . . . . . . . . 42 –– Assignee of the debt is also entitled to file application. . . . . . . . . . . 42 Edelweiss Asset Reconstruction Company Limited v Kalpatru Alloys Private Limited, Ahmedabad, NCLT, C.P. (IB) No. 84/7/NCLT/AHM/2017. . . . . . . . . . . . . . . . . . . . . . . . . . 42

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–– No privity of contract is required between corporate debtor and the assignee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Edelweiss Asset Reconstruction Company Limited v Kalpatru Alloys Private Limited, Ahmedabad, NCLT, C.P. (IB) No. 84/7/NCLT/AHM/2017. . . . . . . . . . . . . . . . . . . . . . . . . . 42 Sub-section (8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 –– Bank holding Corporate Guarantee considered as a financial creditor for the purpose of the meetings of COC and to allow to participate in and to contribute to the decision to be taken on finalization of the Resolution Plan . . . . . . . 43 Axis Bank v JODPL Limited, NCLT, Allahabad Bench, CP No. (IB) 25/ALD/2017, CA 73/2017,. . . . . . . . . . . . . . . . . . . . . . . . . . . 43 –– Time value of money is an essential condition for a debt to be a financial debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Nikhil Mehta and Sons v AMR Infrastructure Ltd, NCLAT, Company Appeal (AT) (Insolvency) No. 07 of 2017. . . . . . . . . . . . . . 44 –– Home buyers with assured or committed return clause in the agreement are considered as financial creditors . . . . . . . . . . . . . 44 Nikhil Mehta and Sons v AMR Infrastructure Ltd, NCLAT, Company Appeal (AT) (Insolvency) No. 07 of 2017. . . . . . . . . . . . . . 44 –– Home buyers are within the purview of financial creditors . . . . . . . 44 Chitra Sharma and Ors. v Union of India and Ors., 2018 5 AWC 4829 SC, III (2018) BC 478 (SC), 2018 (5) BomCR 712, [2018] 210 CompCas 609 (SC), (2018) 3 CompLJ 575 (SC), (2018) 3 CompLJ 575 (SC), MANU/ SC/0834/2018, 2018 (4) RCR (Civil) 45, [2018] 148 SCL 833 (SC), 2018 (9) SCALE 490. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 –– Deduction of Tax at Source on Interest Payment by the Corporate Debtor serves as a Proof of Loan being a Financial Debt.45 SR Polyfab Pvt Ltd v Sadbhav Enterprises Pvt Ltd, Ahmedabad Bench, NCLT, CP(IB) No. 115/7/NCLT/AHM/2017. . . 45 –– Reliance on terms of agreement to prove Financial Debt. . . . . . . . . 45 Mahesh Kumar Panwar v Neelam Singh & Anr., NCLAT Company Appeal (AT) (Insolvency) No. 185 of 2017. . . . . . . . . . . . . 45 –– Amounts raised from allottees under real estate projects are deemed to be amounts “having a commercial effect of a borrowing” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Chitra Sharma and Ors. v Union of India and Ors,. 2018 (9) SCALE 490. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 lxxviii

Table of cases – section-wise, topic-wise

–– Mere fact that company paid interest during certain period cannot be the ground to gold that the ‘debt’ comes within the meaning of ‘Financial Debt’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Sanjay Kewalramani v Sunil Parmanand Kewalramani & Ors., [2018]209CompCas331, MANU/NL/0150/2018. . . . . . . . . . . . 46 –– The first essential requirement of the “Financial debt” that has to be met is that the debt is “disbursed against the consideration for time value of money”. . . . . . . . . . . . . . . . . . . . . . . . 46 Gaurav Manav v Rachel L. Chand & Anr., IV(2018)BC95, MANU/NL/0161/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 –– Amount invested by ‘investors’ come within the meaning of ‘Financial Debt’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Nikhil Mehta & Sons v AMR Infrastructure Ltd., [2017]143SCL278, MANU/NL/0041/2017, [2017]141CLA281, III(2017)BC61. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Followed in: Mahesh Kumar Panwar v Neelam Singh & Anr., ([2018] 148 SCL 135, MANU/NL/0056/2018 . . . . . . . . . . . . 48 Anil Mahindroo v Earth Iconic Infrastructure (P) Ltd., IV(2017)BC128, MANU/NL/0055/2017 . . . . . . . . . . . . . . . . . . . . . 48 Rajendra Kumar Saxena v Earth Gracia Buildcon Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 187 of 2018 . . . . . . 48 –– Any indemnity obligation in respect of guarantee come within the meaning of ‘Financial Debt’ . . . . . . . . . . . . . . . . . . . . . . . . 49 Andhra Bank dated v F.M. Hammerle Textile Ltd., IV(2018)BC88, MANU/NL/0160/2018. . . . . . . . . . . . . . . . . . . . . . . . . 51 –– Guarantor company will also come within the meaning of ‘Corporate Debtor’ qua the ‘Financial Creditor’ in whose favour the guarantee has been given . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Ajay Chaturvedi v JM Financial Asset Reconstruction Co. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 320 of 2018. . 51 –– It is significant to discuss whether amount was given as the consideration against the time value of money. . . . . . . . . . . . . . . . . . 51 Kamal Dutta v Anubhuti Aggarwal & Anr., Company Appeal (AT) (Insolvency) No. 329 of 2017. . . . . . . . . . . . . . . . . . . . . . 52 Sub-section (10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 –– Directions to Corporate Debtor to cooperate with Resolution Professional for collection of information. . . . . . . . . . . . 52 Subodh Bajrang Lal Kedia v Anil Nutrients Ltd, Ahmedabad Bench, NCLT, CP (I.B) No. 65/7/NCLT/AHM/2017. . . 52 lxxix

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Sub-section (13). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 –– Electricity, water and telecommunication services and Information Technology service are to be considered essential services as long as these services are not a requirement to the output produced or supplied by the Corporate Debtor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 ICICI Bank Ltd v Innoventive Industries Limited, Mumbai, NCLT, MA 157, CP 01/I&BP/2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Innoventive Industries Limited v Maharashtra State Electricity Distribution Company Ltd., Appellate Tribunal, Company Appeal (AT) (Insolvency) No. 156 of 2017. . . . . 54 –– Wheeling of Power from one Unit to another is an essential service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 SBI v Monnet Ispat & Energy Ltd., NCLT, Mumbai Bench, MA No.47012017, CP No. ll39 I&BP/NCLT/MB/MAH/2017. . . . . . 54 –– If any cost is incurred towards supply of the essential services during the period of ‘Moratorium’, it may be accounted towards ‘Insolvency Resolution Process Costs’ . . . . . . . . 54 Dakshin Gujarat VIJ Company Ltd. v ABG Shipyard Ltd. and Ors., II(2018)BC172, MANU/NL/0020/2018. . . . . . . . . . . . . . . . 55 Sub-section (14). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 –– Insolvency Resolution Process Period starts to run from the insolvency commencement date and there is no provision to stop it under the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 JK Jute Mills Company Limited v Surendra Trading Company, NCLAT, Company Appeal (AT) No. 9 of 2017 . . . . . . . . . 55 –– Can the period of delay in appointment of Resolution Professional be deducted from the Insolvency Resolution Process Period?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 SR Constructions v International Recreation & Amusement Ltd, Principal Bench, (IB) 68(PB)/2017. . . . . . . . . . . . . . 56 –– Insolvency Resolution Process to be Speedy preferably within One Hundred Days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Re Amit Spinning Industries Limited, NCLT Principal Bench, New Delhi, IB-131 (PB)/2017 . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Sub-section (20). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 –– Operational creditors cannot use the Insolvency Code either prematurely or for extraneous considerations or as a substitute for debt enforcement procedures. . . . . . . . . . . . . . . . . . . . 56 lxxx

Table of cases – section-wise, topic-wise

K. Kishan v Vijay Nirman Company Pvt. Ltd., 2018 (5) BomCR 705, (2018) 4 CompLJ 168 (SC), [2018] 146 CLA 1 (SC), (2018) 8 MLJ 177, MANU/SC/0872/2018, 2018 (4) RCR (Civil) 197, [2018] 150 SCL 110 (SC), 2018 (10) SCALE 256 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 –– It is not mandatory for the Operational Creditor to propose name of an Interim Resolution Professional. . . . . . . . . . . . . . . . . . . . 57 Chharia Holdings Pvt. Ltd. v Brys International Pvt. Ltd. & Ors., Company Appeal (AT) (Insol.) No. 126 of 2017. . . . . . . . . . . . . 57 –– The Trade Union or Association of Workmen/employee do not come within the meaning of ‘operational creditor’ . . . . . . . . . . . 57 JK Jute Mill Mazdoor Morcha v Juggilal Kamlapat Jute Mills Co. Ltd., Company Appeal (AT) (Insolvency) No. 82 of 2017. 57 –– Sub-tenant has no liability to pay the rent to the original owner of the premises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Rahul Gupta v Mahesh Madhavan & Anr., III(2018)BC66, MANU/NL/0101/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Sub-section (21). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 –– Filtration Process for classifying an amount to be operational debt.58 Parmod Yadav v Divine Infracon Pvt Ltd, NCLT, New Delhi, No. IB-209/ND/2017, Bench III . . . . . . . . . . . . . . . . . . . . . . . . . 58 –– Insofar as an operational debt is concerned, all that has to be seen is whether the said debt can be said to be disputed. . . . . . . 58 K. Kishan v Vijay Nirman Company Pvt. Ltd., 2018 (5) BomCR 705, (2018) 4 CompLJ 168 (SC), [2018] 146 CLA 1 (SC), (2018) 8 MLJ 177, MANU/SC/0872/2018, 2018 (4) RCR (Civil) 197, [2018] 150 SCL 110 (SC), 2018 (10) SCALE 256 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 –– To come within the meaning of “operational debt”, it is necessary to show that the claim relates to the provisions of the goods or services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Co. Jegannathan v Spring Field Shelters Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 79 of 2018. . . . . . . . . . . . . . 59 –– Lease of Immovable Property does not qualify as operational debt.59 Parmod Yadav v Divine Infracon Pvt Ltd, NCLT, New Delhi, No. IB-209/ND/2017, Bench III,. . . . . . . . . . . . . . . . . . . . . . . . . 60 Sub-section (22). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

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–– Guarantors having repaid the loan on behalf of the corporate debtor become entitled to recover the same from the Corporate Debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Davinder Ahluwalia v Sumit Aviation, New Delhi, NCLT, IB No. (IB) 229 (ND)/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 –– Financial Creditor Restrained from Selling the Assets of Personal Guarantor during Moratorium Period. . . . . . . . . . . . . . . . . 60 V Ramakrishnan v Vee Energy Systems Private Limited & State Bank of India, [2017] 144 SCL 94.. . . . . . . . . . . . . . . . . . . . . . . . 61 –– Insolvency Resolution Process can be initiated against Corporate Guarantor and Principal Borrower simultaneously. . . . . 61 IDBI v BCC Estates Private Limited, Ahmedabad Bench, NCLT, C.P. No. (IB) 81/7/NCLT/AHM/2017. . . . . . . . . . . . . . . . . . . . 61 Sub-section (24). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 –– An ‘assignor’ assigns its debt in favour of the ‘assignee’ and ‘assignee’ steps in the shoes of the ‘assignor’. . . . . . . . . . . . . . . . . . . . 61 Pankaj Yadav & Anr. v State Bank of India Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 28 of 2018. . . . . . . . . . . . . . 62 Section 6 Persons who may initiate corporate insolvency resolution process Section 7 Initiation of corporate insolvency resolution process by financial creditor Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 –– Application by a single Financial Creditor of Consortium is permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 IDBI Bank Limited v BCC Estates Private Limited, (2018) 1 CompLJ 116. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Bank of Baroda v Amrapali Silicon City Private Limited, [2017] 143 SCL 724, [2017] 204 CompCas 285, [2017] 140 CLA 226. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Punjab National Bank v Concord Hospitality Private Limited, CP(IB) No. 43/CHD/PB/2017, NCLT Chandigarh Bench. . 64 –– The Adjudicating Authority is bound to issue notice to the corporate debtor before admitting a case. . . . . . . . . . . . . . . . . . . . . . . 64 Sree Metaliks Limited v UOI, [2017] 203 CompCas 442 (Cal), [2017] 140 CLA 30 (Cal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

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–– Notice of the application to be served on the Registered Office address. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Exotica Housing & Infrastructure Projects v KAD Housing Pvt Ltd, NCLT, Principal Bench, (IB) 396(PB)/2017 . . . . . . . . . . . . . . 65 –– Reasonable Opportunity to the Corporate Debtor is to be afforded before admitting Petition for corporate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Essar Steel India Limited v Reserve Bank of India, [2017] 143 SCL 580 (Guj), [2017] 141 CLA 45 (Guj) . . . . . . . . . . . . . . . . . . . 65 –– Service of application at the registered office of the corporate debtor is a pre-requisite . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Indian Bank v Athena Demwe Power Limited, Principal Bench NCLT, CP No. 55/2017,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 –– Application served on director constitutes due notice of the application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Inderpreet Singh v Mariners Buildcon India Limited, NCLT, Special Bench New Delhi, CP No. (IB)-185(PB)/2017 . . . . . . 66 –– No duty on the corporate debtor to inform the change of address to creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Bhash Software Labs Limited v Mobme Wireless Solutions Limited, (2018) 1 CompLJ 42, I (2018) BC 28 . . . . . . . . . . . . . . . . . . . 66 –– Substituted service upon the Corporate Debtor. . . . . . . . . . . . . . . . . 67 SREI Equipment Finance Ltd v Wianxx Impex Pvt Ltd, Principal Bench, NCLT, (IB) 27(PB)/2017. . . . . . . . . . . . . . . . . . . . . . . 67 Alchemist Asset Reconstruction Co Pvt Ltd. v NIIL Infrastructure Pvt Ltd, IB 560(PB)/2017, Principal Bench, NCLT . . . 67 Musaddi Lal Kishan Lal v Ram Dev Int Ltd, (IB) 178(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . 67 Palogix Infrastructure Private Limited v ICICI Bank Limited, [2017] 144 SCL 319, [2017] 141 CLA 83. . . . . . . . . . . . . . . . 67 –– Notice served on Administrative Office accepted. . . . . . . . . . . . . . . . 68 Central Bank of India v Ashok Magnetics, CP/551(IB)/ CB/2017, NCLT, Chennai Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 –– Fresh application can be filed under section 7 or section 9 of the Code in terms of Second proviso to Rule 5 of The Companies (Transfer of Pending Proceedings) Second Amendment Rules, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Paharpur Cooling Towers Limited v Dalmia Cement (Bharat) Limited, Company Appeal (AT) (Insol.) No. 127 of 2017. . 69 lxxxiii

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Followed in: Karismaa Foundations Pvt. Ltd. v Indust Cityscapes Constructions Pvt. Ltd., [2018]143CLA66, MANU/NL/0002/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 –– Application must be admitted if a default has occurred, unless it is incomplete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Innoventive Industries Ltd. v ICICI Bank & Anr., AIR 2017 SC 4084, III (2017) BC 632 (SC), [2017] 205 CompCas 57 (SC), (2017) 4 CompLJ 193(SC), [2017] 140 CLA 39 (SC), 2017 (5) CTC 725, MANU/SC/1063/2017, [2017] 143 SCL 625 (SC), 2017(11)SCALE 4, (2018) 1 SCC 407, (2018) 1 WBLR (SC) 446. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Followed in: Unigreen Global Private Limited v Punjab National Bank & Ors., II(2018)BC132, [2018]142CLA131, MANU/NL/0192/2017, [2018]145SCL272. . 69 –– Financial Creditor can file its claim before the Interim Resolution Professional for getting the amount back . . . . . . . . . . . . 69 Indian Overseas Bank v Dinkar T. Venkatsubramaniam, MANU/NL/0174/2017, [2018] 145 SCL 138. . . . . . . . . . . . . . . . . . . . 70 –– If the classification is on reasonable differentia it does not offend the principle of equality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Akshay Jhunjhunwala and Ors. v Union of India, AIR 2018 Cal 139, 2018 (1) CLJ (CAL) 418, [2018] 144 CLA 435 (Cal), MANU/WB/0075/2018, [2018] 147 SCL 163 (Cal) . . . . . . . . . 70 –– The scheme of section 7 stands in contrast with the scheme under section 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Innoventive Industries Ltd. v ICICI Bank & Anr., AIR 2017 SC 4084, III (2017) BC 632 (SC), [2017] 205 CompCas 57 (SC), (2017) 4 CompLJ 193 (SC, [2017] 140 CLA 39 (SC), 2017 (5)CTC 725, MANU/SC/1063/2017, [2017] 143 SCL 625 (SC), 2017 (11) SCALE 4, (2018)1 SCC 407, (2018)1 WBLR (SC) 446. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Followed in: Subasri Realty Private Limited v N. Subramaniam & Anr., (Company Appeal (AT) (Insolvency) No. 290 of 2017). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Marg Limited v Tata Capital Financial Services Ltd., (Company Appeal (AT) (Insolvency) No. 219 of 2018). . . . . . . . . 71 –– Tribunal may initiated CIRP where there is no appearance after notice served two times. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

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Reliance Commercial Finance Limited v Prime Cars Private Limited, C.P. (IB) No. 87/7/NCLT/AHM/2017, NCLT, Ahmedabad Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 –– Corporate Debtor need not be a party to the Assignment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Edelweiss Asset Reconstruction Company Limited v Kalptaru Alloy Private Limited, [2017] 205 CompCas 186, [2017] 141 CLA 501 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 –– Tribunal not bound by ways and means suggested by a Counsel of the Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Engenious Engineering Private Limited v Onex Natura Private Limited, CP(IB) No. 92/7/NCLT/AHM/2017, NCLT Ahmedabad Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 –– The expression “default” bears the same meaning in sections 7 and 8 of the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 BK Educational Services Private Limited v Parag Gupta and Associates, IV (2018) BC 317 (SC), (2018) 4 CompLJ 209 (SC), [2018] 146 CLA 380 (SC), MANU/ SC/1160/2018, 2018 (14) SCALE 482, AIR 2018 SC 5601 . . . . . . . . . 72 –– Period of seven days for rectifying defects is not mandatory . . . . . . 73 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd. and Ors., AIR 2018 SC 186, 2018 (2) ABR 324, 2018 (1) AKR 663, 2018 (4) ALLMR 462, [2017] 205 CompCas 119 (SC), (2018) 1 CompLJ 217(SC), [2017] 141 CLA 174 (SC), 2018-1-LW813, MANU/ SC/1248/2017, [2017] 144 SCL 198 (SC), (2017) 16 SCC 143. . . . . . 73 Followed in: ArcelorMittal India Private Limited v Satish Kumar Gupta & Ors., AIR 2018 SC 5646, [2018] 146 CLA 293 (SC), MANU/SC/1123/2018, 2018 (13) SCALE 381. . . . 73 –– If there is a debt and default and the Corporate Applicant is not ineligible under section 11, application under section 10 has to be admitted, unless it is incomplete. . . . . . . . . . . . 73 Unigreen Global Private Limited v Punjab National Bank & Ors., II(2018)BC132: [2018]142CLA131: MANU/ NL/0192/2017: [2018]145SCL272 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Followed in: Antrix Diamond Exports Pvt. Ltd. v Bank of India and Ors., MANU/NL/0007/2018, [2018]146SCL28. . . . . 74 Krishna Kraftex Pvt. Ltd. v HDFC Bank & Ors., [2018]146SCL72: MANU/NL/0005/2018 . . . . . . . . . . . . . . . . . . . . 75

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Ameya Laboratories Ltd. (ALL) v Kotak Mahindra Bank & Ors., [2018]210CompCas279, (2018)4CompLJ392, MANU/NL/0004/2018, [2018]145SCL676 . . . . . . . . . . . . . . . . . . . BCL Homes v Canara Bank & Ors., [2018]208CompCas609, (2018)3CompLJ620, MANU/ NL/0037/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Neeta Chemicals (I) Pvt. Ltd. v State Bank of India, III(2018)BC120, MANU/NL/0051/2018). . . . . . . . . . . . . . . . . . . . . Gemini Innovations Pvt. Ltd. v State Bank of India, Company Appeal (AT) (Insolvency) No. 199 of 2018. . . . . . . . . . .

75 75 75

–– “Winding up” under the Companies Act, 2013 has to be treated as “liquidation” under the Code. . . . . . . . . . . . . . . . . . . . . . . . 75 Forech India Pvt. Ltd. v Edelweiss Assets Reconstruction Company Ltd. & Anr., (Company Appeal (AT) (Insolvency) No. 202 of 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Followed in: Innoventive Industries Limited v Kumar Motors Private Limited, III(2018)BC1, MANU/NL/ 0019/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Birender Kumar v Adel Landmarks Ltd., [2018]147SCL62, MANU/NL/0016/2018 . . . . . . . . . . . . . . . . . . . . 76 State Bank of India v Shakti Bhog Foods Limited (Company Appeal (AT) (Insolvency) No. 83 of 2018, MANU/NL/0041/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Indiabulls Housing Finance Ltd. v Shree Ram Urban Infrastructure Ltd., Company Appeal (AT) (Insolvency) No. 252 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 –– ‘Financial Creditor’ cannot file an application under Section 7 on violation of terms of resolution plan which was approved 12 months before the date of making an application.77 Forech India Pvt. Ltd. v Edelweiss Assets Reconstruction Company Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 202 of 2017, MANU/NL/0186/2017. . . . . . . . . . . . 77 –– The applicant under Section 7 or 9 of the Code is liable to incur the expenses of the Resolution Professional which will get reimbursed by the Committee of Creditors. . . . . . . . . . . . . . 77 State Bank of India v SKC Retails Ltd. through IRP & Anr., [2018]210CompCas69, [2018]144CLA324, MANU/ NL/0033/2018, [2018]147SCL422;. . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

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Table of cases – section-wise, topic-wise

State Bank of India v Tech Megacorp International Pvt. Ltd. through IRP & Anr., Company Appeal (AT) (Insolvency) No. 09 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 –– Facts which are not required to be disclosed in the format cannot be treated to be suppression of facts . . . . . . . . . . . . . . . . . . . . 78 Rajit Mehra v Punjab National Bank & Anr., Company Appeal (AT) (Insolvency) No. 102 of 2018. . . . . . . . . . . . . . . . . . . . . . 78 –– Officers of Banks who have been authorized by the Competent Authority can file an application under Section 7. . . . . 78 Vijay Kumar Jain v DBS Bank Limited, Company Appeal (AT) (Insolvency) No. 24 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Vijay Kumar Jain v Standard Chartered Bank Ltd., Company Appeal (AT) (Insolvency) No. 52 of 2018. . . . . . . . . . . . . . 79 –– ‘Power of Attorney Holder’ is not competent to file an application on behalf of a ‘Financial Creditor’ or ‘Operational Creditor’ or ‘Corporate Applicant’. . . . . . . . . . . . . . . . . 79 Palogix Infrastructure Private Limited v ICICI Bank Limited, (2018)3CompLJ97, II(2018)BC32, [2017]141CLA83, MANU/NL/0095/2017, [2017]144SCL319. . . . . . 81 Followed in: Mahesh Kumar Sureka v SBER Bank & Ors., [2018]208CompCas21, (2018)3CompLJ205, [2018]144CLA339, MANU/NL/0063/2018. . . . . . . . . . . . . . . . . . . 81 Rajnish Gupta v Small Industrial Development Bank of India, Company Appeal (AT) (Insolvency) No. 126 of 2018 . . . . . 81 Ramesh Chander Gupta v Punjab National Bank, Company Appeal (AT) (Insolvency) No. 179 of 2017. . . . . . . . . . . 81 –– It is open to the Corporate Debtor(s) or their promoters to negotiate with the Financial Creditor if applications under Section 7 are admitted against one or other Corporate Debtor. . . . 81 Uttam Galva Metallics Ltd. v State Bank of India, Company Appeal (AT) (Insolvency) No. 315 of 201; . . . . . . . . . . . . . . . . . . . . . . 81 Uttam Value Steels Ltd. v State Bank of India, Company Appeal (AT) (Insolvency) No. 316 of 2018. . . . . . . . . . . . . . . . . . . . . . 81 –– The ground that there was an existence of dispute between the ‘Corporate Debtor’ and the ‘Financial Creditor’ and the matter was referred for Arbitration, cannot be taken to oppose an application under Section 7 . . . . . . . . . . . . . . . . . . . . . . . . 81 Nandhitha Vedam v Udhyaman Investments Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 166 of 2018. . . . . . . . 82

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–– No person, including the ‘shareholders’ or the ‘personal guarantor’ etc., has a right to be heard at the stage of admission of the application under Sections 7 and 9 of the Code. . 82 Axis Bank Ltd. v Lotus Three Developments Ltd. & Ors., IV(2018)BC92, [2018]210CompCas110, [2018]146CLA207, MANU/NL/0179/2018. . . . . . . . . . . . . . . . . . . . . 84 –– Application under Section 7 or 9 or 10 is not a money claim or suit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 V. R. Hemantraj v Stanbic Bank Ghana Ltd. & Anr., IV (2018) BC 143, [2018] 210 CompCas 516, [2018] 147 CLA 35, MANU/NL/0265/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 –– While entertaining an application under Section 7, the Adjudicating Authority or the Appellate Tribunal cannot decide issue concerning an ex-parte decree . . . . . . . . . . . . . . . . . . . . 84 V. R. Hemantraj v Stanbic Bank Ghana Ltd. & Anr., IV (2018) BC 143, [2018] 210 CompCas 516, [2018] 147 CLA 35, MANU/NL/0265/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 –– For the purpose of admitting an application under Section 7, ‘default’ has to be ‘ascertained’ as on the date of decision of the Adjudicating Authority and not at the time of filing the application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Core Hotels Ventures Private Limited and Anr. v Bank of Baroda, Company Appeal (AT) (Insolvency) No. 84 of 2018. . . . . . . 85 –– Sections 3 and 4 of the Usurious Loans Act, 1918 are not applicable to the proceedings under Section 7 or 9 of the Code . . . 85 Naveen Luthra & Ors. v Bell Finvest (India) Ltd. & Anr., [2019]148CLA70, MANU/NL/0298/2018 . . . . . . . . . . . . . . . . . . . . . . 86 –– An intervener can demand a copy of a pleading only after being admitted as a party to the litigation. . . . . . . . . . . . . . . . . . . . . . 86 Nityank Infrapower & Multiventures Pvt. Ltd. v Invex Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 499 of 2018. . 86 –– The application under section 7 is maintainable against two ‘Corporate Debtors’ if they collaborate and form an independent unit entity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Mamatha v AMB Infrabuild Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 155 of 2018. . . . . . . . . . . . . . . . . . . . . . 87 –– When CIRP initiates, the Adjudicating Authority has no jurisdiction to initiate another CIRP against the same debtor. . . . . 87

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Table of cases – section-wise, topic-wise

Meyer Apparel Ltd. & Anr. v Surbhi Body Products Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 33 of 2017. . . 87 –– The Financial Creditor cannot withdraw application under Section 7 once it is admitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Lokhandwala Kataria Construction Pvt. Ltd. v Nisus Finance & Investment Manager LLP, Company Appeal (AT) (Insolvency) No 95 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 –– Petition under Section 433(e) of the Companies Act, 1956 on transfer under sub-sections (1) and (2) of Section 434 of the Companies Act, 2013 cannot be treated to be an application under Sections 7, 9 or 10 of the I&B Code . . . . . . . . . . . 87 Unimark Remedies Ltd. v Ashok Alco Chem Ltd., Company Appeal (AT) (Insolvency) No. 45 of 2017. . . . . . . . . . . . . . 88 Sub-Section (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 –– Application by Power of Attorney holder . . . . . . . . . . . . . . . . . . . . . . 88 Bank of Baroda v Amrapali Silicon City Private Limited, [2017] 143 SCL 724, [2017] 204 CompCas 285, [2017] 140 CLA 226. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 –– Power of Attorney holder is not competent to file an application under the Code on behalf of the financial creditor or operational creditor or corporate applicant. . . . . . . . . . . 88 Palogix Infrastructure Private Limited v ICICI Bank Limited, [2017] 144 SCL 319, [2017] 141 CLA 83. . . . . . . . . . . . . . . . 90 –– Authorised Officers of the Applicant are competent to file an Application under the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 Palogix Infrastructure Private Limited v ICICI Bank Limited, [2017] 144 SCL 319, [2017] 141 CLA 83. . . . . . . . . . . . . . . . 91 –– Applicability of the State Bank of India General Regulations, 1955 for signing authority. . . . . . . . . . . . . . . . . . . . . . . . 92 State Bank of India v Essar Steels Limited, CP (IB) No. 40/7/NCLT/AHM/2017, NCLT Ahmedabad Bench. . . . . . . . . . . . . . 92 –– Triggering of Insolvency Resolution Process cannot be defeated by taking resort to pendency of internal dispute between Directors of Corporate Debtor on allegations of oppression and mismanagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Jagmohan Bajaj v Shivam Fragrances Private Limited & Anr., [2018]210CompCas84, [2018]146CLA240, MANU/NL/0197/2018, [2018]149SCL598. . . . . . . . . . . . . . . . . . . . . 93

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–– Circular of Reserve Bank of India coming into effect after filing an application under Section 7 by the Financial Creditor, is not applicable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Ankit Patni v State Bank of India & Anr., Company (AT) (Insolvency) No. 369 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Sub-Section (4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 –– Period of fourteen days for ascertaining the existence of default by the Tribunal is not mandatory. . . . . . . . . . . . . . . . . . . . . . . 93 JK Jute Mills Company Limited v Surendra Trading Company, [2017] 142 SCL 188, [2017] 204 CompCas 483, [2017] 138 CLA 258 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 –– NCLT and NCLAT are required to adhere to the principles of natural justice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Sree Metaliks Limited and Ors. v Union of India and Ors., [2017] 203 CompCas 442 (Cal): [2017] 140 CLA 30 (Cal): MANU/WB/0236/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 –– The NCLAT will decide applications under Section 7 and 9 of the Code on the footing that the Limitation Act will apply to such petitions/ applications. . . . . . . . . . . . . . . . . . . . . . . . . . 97 BK Educational Services Private Limited v Parag Gupta and Associates, IV (2018) BC 317 (SC), (2018) 4 CompLJ 209 (SC), [2018] 146 CLA 380 (SC): MANU/ SC/1160/2018, 2018 (14) SCALE 482, AIR 2018 SC 5601 . . . . . . . . . 97 –– Adjudicating Authority is required to ascertain existence of default from the records of Information Utility or on the basis of other evidence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 Innoventive Industries Ltd. v ICICI Bank & Anr., AIR 2017 SC 4084: III (2017) BC 632 (SC), [2017] 205 CompCas 57 (SC), (2017) 4 CompLJ 193 (SC), 2017] 140 CLA 39 (SC), 2017 (5) CTC 725, MANU/SC/1063/2017, [2017] 143 SCL 625 (SC), 2017 (11) SCALE 4, (2018)1 SCC 407, (2018)1 WBLR (SC) 446. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 Followed in: Sacrato Capital Pvt. Ltd. v Anil Ltd., MANU/NC/0870/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 –– The time period of 14 days are to be counted from the date of receipt of the application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 J K Jute Mills Company Limited v Surendra Trading Company, [2017] 142 SCL 188, [2017] 204 CompCas 483, [2017] 138 CLA 258 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

Table of cases – section-wise, topic-wise

–– Time limit of seven days for removal of defects is mandatory . . . . . 98 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd., AIR 2018 SC 186, [2017] 144 SCL 198 (SC), [2017] 205 CompCas 119 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . . 98 –– Opportunity granted to Financial Creditor to attach bank statement certified in accordance with the Bankers Books Evidence Act, 1891 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Daimler Financial Services Pvt Ltd v M/s Sharda Jems and Jewels Pvt Ltd, IB- 376/(ND)/2017, New Delhi Bench II, NCLT. . . . 98 –– Plea of Oral Agreement in the absence of the agreement cannot be a ground for rejection of application for initiating corporate insolvency resolution process . . . . . . . . . . . . . . . . . . . . . . . 98 R G Shaw and Sons Pvt Ltd v Naviplast Traders Private Limited, Company Appeal (AT) (Insolvency) No. 63 of 2017, NCLAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 –– Form 1 is not incomplete if ‘Not Applicable’ is mentioned. . . . . . . . 99 R G Shaw and Sons Pvt Ltd v Naviplast Traders Private Limited, Company Appeal (AT) (Insolvency) No. 63 of 2017, NCLAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 –– Objections filed by corporate debtor allowed to be withdrawn by the Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 IDBI Bank v Jaypee Infratech Limited, CP No. (IB)/77/ ALD/2017, Allahabad Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Sub-Section (5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 –– Conditions for admission or rejection. . . . . . . . . . . . . . . . . . . . . . . . . 99 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd, AIR 2018 SC 186, [2017] 144 SCL 198 (SC), [2017] 205 CompCas 119 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . . 99 –– Presence of word ‘may’ in sub-section (5) . . . . . . . . . . . . . . . . . . . . . 100 Innoventive Industries Ltd v ICICI Bank, AIR 2017 SC 4084, 2017 (11) SCALE 4, (2018) 1 SCC 407 . . . . . . . . . . . . . . . . . . . 101 –– Application under Section 7 cannot be rejected on the basis of reasons behind the default of payment. . . . . . . . . . . . . . . . . . . . . 101 H.N. Nagaraj v Edelweiss Asset Reconstruction Company Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 210 of 2018. 101 –– The application under Section 7 of the Code cannot be rejected on the ground of filing a winding up case. . . . . . . . . . . . . . 101 Marg Limited v Tata Capital Financial Services Ltd., Company Appeal (AT) (Insolvency) No. 219 of 2018. . . . . . . . . . . . 101 xci

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–– Interpretation of the word ‘may’ appearing in section 7(5) of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 Essar Steel India Limited v Reserve Bank of India, [2017] 143 SCL 580 (Guj), [2017] 141 CLA 45 (Guj) . . . . . . . . . . . . . . . . . . 102 Standard Chartered Bank v Essar Steel India Limited, [2017] 143 SCL 580 (Guj), [2017] 141 CLA 45 (Guj) . . . . . . . . . . . . 103 –– Admission of Application by the Tribunal on fulfilment of conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 State Bank of India v Bhushan Steel Limited, C.P. No. IB201(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . 103 –– Dismissal of Application for non-prosecution . . . . . . . . . . . . . . . . . 103 ONGC Employees Contributory Fund Trust, CP No. (IB)/89/ALD/2017, Allahabad Bench, NCLT. . . . . . . . . . . . . . . . . . . 103 –– Notice for Rectification of Defect in the Application. . . . . . . . . . . . 103 Sree Mettaliks Limited v UOI, [2017] 203 CompCas 442 (Cal), [2017] 140 CLA 30 (Cal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 –– Statutory scheme of the Code for removal of defects. . . . . . . . . . . . 104 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd, AIR 2018 SC 186, [2017] 144 SCL 198 (SC), [2017] 205 CompCas 119 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . 104 –– Is time limit of seven days for removal of defects mandatory or directory?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd, AIR 2018 SC 186, [2017] 144 SCL 198 (SC), [2017] 205 CompCas 119 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . 106 –– Application for Condonation of Delay in Removing the Defect. . . 106 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd, AIR 2018 SC 186, [2017] 144 SCL 198 (SC), [2017] 205 CompCas 119 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . 106 Palogix Infrastructure Private Limited v ICICI Bank Limited, [2017] 144 SCL 319, [2017] 141 CLA 83. . . . . . . . . . . . . . . 107 –– Withdrawal of Application after admission not permitted under the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Mother Pride Dairy India Private Limited v Portrait Advertising & Marketing Private Limited, NCLAT, Company Appeal (AT) (Insolvency) No. 94 of 2017. . . . . . . . . . . . . 107 –– Appellate Tribunal has no inherent power to permit withdrawal after admission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

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Lokhandwala Kataria Construction Pvt Ltd v Nisus Finance & Investment Manager LLP, [2017] 140 CLA 215: I (2018) BC 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 –– Supreme Court may allow withdrawal of application under Article 142 of the Constitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 Lokhandwala Kataria Construction Pvt Ltd v Nisus Finance & Investment Manager LLP, [2018] 142 CLA 37 (SC). . . . 109 Lokhandwala Kataria Construction Pvt Ltd v Nisus Finance & Investment Manager LLP, [2018] 142 CLA 37 (SC). . . . 109 Prime Cars Pvt Ltd v Reliance Commercial Finance Ltd, Supreme Court, Civil Appeal No. 15473 of 2017. . . . . . . . . . . . . . . . 109 –– Supreme Court recommended amendment in Rules to include inherent powers to allow compromise after admission of insolvency petition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Uttara Foods and Feeds Private Limited v Mona Pharmachem, [2017] 141 CLA 253 (SC), 2017 (13) SCALE 526 . . . 110 –– Format of the application under section 7 of the ‘I&B Code’ (Form-1) cannot be treated as an application under section 9 of the ‘I&B Code’ (Form-5) . . . . . . . . . . . . . . . . . . . . . . . . . 110 PEC Ltd v M/s Sree Ramakrishna Alloys Ltd, Company Appeal (AT) (Insolvency) No. 225 of 2017, NCLAT . . . . . . . . . . . . . 111 –– No second application against the same corporate debtor is maintainable once Corporate Insolvency Resolution Process has been initiated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Axis Bank Ltd. v Ramswarup Industries Ltd., CP(IB) No. 580/KB/2017, Kolkata Bench NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Asset Reconstruction Company India Ltd. v Ramswarup Industries Ltd., CP(IB) No. 573/KB/2017, Kolkata Bench, NCLT . . 111 –– Amount reflected in the records of the company need not be a debt under the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Engenious Engineering Pvt Ltd v Onaex Natura Pvt Ltd, Company Appeal (AT) (Insolvency) No. 249 of 2017. . . . . . . . . . . . 111 Sub-Section (6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 –– RBI circular and guidelines do not override the provisions of Insolvency and Bankruptcy Code, 2016 (31 of 2016) . . . . . . . . . 112 IDBI Bank Limited v BCC Estates Private Limited, (2018) 1 CompLJ 116. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

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–– Application against Corporate Guarantor is maintainable even if the Principal Borrower is undergoing corporate insolvency resolution process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 IDBI Bank Limited v BCC Estates Private Limited, (2018) 1 CompLJ 116. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 –– Corporate debtor who is a guarantor cannot be regarded as defaulter as no default can be deemed to be committed by the principal borrower. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 Export Import Bank of India v CHL Limited, C.P. No. IB392(PB)/2017, Principal Bench NCLT. . . . . . . . . . . . . . . . . . . . . . . . . 113 –– A person can be considered as a Financial Creditor on the basis of the Assignment Deed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 Phoenix Arc Private Limited v Sarbat Cotfab Private Limited, CP (IB) No.123/Chd/CHD/2017, Chandigarh Bench NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 –– Proceedings pending under the SARFAESI Act do no bar initiation of corporate insolvency resolution process . . . . . . . . . . . 114 Edelweiss Asset Reconstruction Company Limited v Kalptaru Alloy Private Limited, [2017] 205 CompCas 186, [2017] 141 CLA 501 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 –– Pending proceedings before Debt Recovery Tribunal have no relevance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 State Bank of India v Radheyshyam Fibres Private Limited, CP (IB) No. 51/7/NCLT/AHM/2017, NCLT, Ahmedabad Bench. . 114 –– Proceedings pending for dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881 are no bar for application under Section 7 of the Code. . . . . . . . . . . . . . . . 115 RG Shaw and Sons Pvt Ltd. v Naviplast Traders Private Limited, Company Appeal (AT) (Insolvency) No. 63 of 2017, NCLAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 –– Pendency of the case under Section 138/441 of Negotiable Instruments Act, 1881 amounts to admission of debt and not an existence of dispute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Sudhi Sachdev v APPL Industries Ltd., Company Appeal (AT) (Insolvency) No. 623 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 –– Existing Debt Restructuring Plan does not absolve the corporate debtor from Insolvency Resolution Process. . . . . . . . . . . 115 Standard Chartered Bank v Essar Steel India Limited, [2017] 143 SCL 580 (Guj), [2017] 141 CLA 45 (Guj) . . . . . . . . . . . . 117 xciv

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–– Effect of pending winding-up petitions before the High Courts in respect of same corporate debtor. . . . . . . . . . . . . . . . . . . . 117 ICICI Bank Ltd v ABG Shipyard Limited, CP No. 53/7/ NCLT/AHM/2017, NCLT, Ahmedabad . . . . . . . . . . . . . . . . . . . . . . . 117 –– The mere fact that post notice winding up proceedings are to be “dealt with” in accordance with the provisions of the Companies Act, 1956 does not bar the applicability of the provisions of IBC in general to proceedings validly instituted under IBC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Jotun India Private Limited and Ors. v PSL Limited, 2018 (2) ABR 350, 2018 (1) Bom CR 524, (2018) 2 CompLJ 222 (Bom), [2018] 142 CLA 290 (Bom), MANU/ MH/0005/2018, [2018] 145 SCL 601 (Bom) . . . . . . . . . . . . . . . . . . . 118 –– Two split proceedings cannot go simultaneously before the DRT as well as NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 Sanjeev Shriya and Ors. v State Bank of India and Ors., 2017(9)ADJ723, 2018(2) ALJ 769, 2017 (125) ALR 430, 2017 5 AWC4788All, III(2018)BC352(All.), [2017]141CLA305(All), MANU/UP/2243/2017, [2017]144SCL545(All).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 –– Winding-up Petition on the same claim between the same parties pending before the High Court . . . . . . . . . . . . . . . . . . . . . . . 119 Jotun India Private Ltd. v PSL, CA (L) No. 572 and 333 & 417 of 2017, CP No. 434 of 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 Innoventive Industries Ltd v Kumar Motors Pvt Ltd, Company Appeal (AT) (Insolvency) No. 181 of 2017, NCLAT . . . . 120 –– No bar on NCLT to trigger an Insolvency Resolution Process on an application filed under Sections 7,9 & 10 if a winding up petition is pending unless an official liquidator has been appointed and a winding up order is passed . . . . . . . . . . 121 Union Bank of India v Era Infra Engineering Ltd., (IB) 190(PB)/2017, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Tata Capital Financial Ltd. v Svogi Oil Gas and Energy Ltd., (IB) 109(PB)/2017,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Alchemist Asset Reconstruction Co. Ltd. v Triupati Buildings & offices Pvt. Ltd., (IB) 110(PB)/2017, . . . . . . . . . . . . . . . 121 Reliance Commercial Limited v Varaha Infra Ltd., (IB) 191(PB)/2017, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

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Xionn v Aman Hospitality Pvt. Ltd., CP 1050/2016, Principal Bench NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 –– Interim Order by Appellate Tribunal to keep the Company as going concern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Prime Cars Pvt Ltd v Reliance Capital finance Ltd, NCLAT, Company Appeal (AT) (Insolvency) No. 196 of 2017. . . . . . . . . . . . 121 A D Electro Steel Co Pvt Ltd v Anil Steels, NCLAT, Company Appeal (AT) (Insolvency) No. 194 of 2017. . . . . . . . . . . . 122 –– Code of Civil Procedure, 1908 is not applicable for filing of application under the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 Palogix Infrastructure Private Limited v ICICI Bank Limited, [2017] 144 SCL 319, [2017] 141 CLA 83. . . . . . . . . . . . . . . 122 SREI Equipment Finance Ltd v Wianxx Impex Pvt Ltd, (IB) 27(PB)/2017, Principal Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . 122 Musaddi Lal Kishan Lal v Ram Dev Int Ltd, (IB) 178(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . 122 –– Master circulars or guidelines etc. issued by the Reserve Bank of India are beyond the scope of Code. . . . . . . . . . . . . . . . . . . 122 Bank of India v Tirupati Infraprojects Pvt Ltd, C.P. No. IB104(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . 123 –– Home Buyers with agreement of assured returns are financial creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Nikhil Mehta v A M R Infrastructure Ltd, NCLAT, Company Appeal (AT) (Insolvency) No. 07 of 2017. . . . . . . . . . . . . 123 –– Corporate Insolvency Resolution Process can be initiated against the guarantor despite pendency of proceeding against the principal borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 ICICI Bank Ltd. v Vista Steel Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 13 of 2018, NCLAT. . . . . . . . . . . . . . . . . . . . . 123 Section 8 Insolvency resolution by operational creditor Sub-Section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 –– Scheme of section 8 and 9 under the Code. . . . . . . . . . . . . . . . . . . . 125 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532: (2018) 1 SCC 353: 2017 (11) SCALE 754.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 –– Home Buyer not an operational creditor. . . . . . . . . . . . . . . . . . . . . . 127 Col Vinod Awasthi v AMR Infrastructure Ltd, [2017] 141 SCL 70.. . . 127 xcvi

Table of cases – section-wise, topic-wise

Pawan Dubey v M/s JBK Developers Private Limited, IV (2017) BC 56.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Pawan Dubey v M/s JBK Developers Private Limited, Civil Appeal No. 11197 of 2017, Supreme Court . . . . . . . . . . . . . . . . . . . . 128 –– Obligation of operational creditor to deliver demand notice. . . . . 128 Macquarie Bank Limited v Shilpi Cable Technologies Ltd, AIR 2018 SC 498, (2018) 2 SCC 674, 2017 (14) SCALE 509. . . . . . . 128 –– Lawyer cannot sign or issue demand notice on behalf of Operational Creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Uttam Galva Steels Limited v DF Deutsche Forfait AG, [2017] 204 CompCas 511, [2017] 143 SCL 318. . . . . . . . . . . . . . . . . 129 –– Demand notice can be issued by a lawyer on behalf of operational creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Macquarie Bank Limited v Shilpi Cable Technologies Ltd, AIR 2018 SC 498, (2018) 2 SCC 674, 2017 (14) SCALE 509. . . . . . . 132 Sub-Section (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 –– Period of ten days is mandatory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC4 532, (2018) 1 SCC 353, 2017 (11) SCALE 754 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 –– Existence of Dispute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, (2018) 1 SCC 353, 2017 (11) SCALE 754 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 –– Dispute must truly exist in fact and should not be spurious, hypothetical or illusory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 Madhusudan Gordhandas & Co v Madhu Wollen Industries Pvt Ltd, AIR 2017 SC 4532, (2018) 1 SCC 353, 2017 (11) SCALE 754.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 –– Determining the meaning of existence of dispute. . . . . . . . . . . . . . 134 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, (2018) 1 SCC 353, 2017 (11) SCALE 754 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 –– The word ‘and’ occurring in Section 8(2)(a) must be read as ‘or’. . 134 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, (2018) 1 SCC 353, 2017 (11) SCALE 754 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 –– Dispute raised for the first time in response to the demand notice is not considered as ‘pre-existing dispute’. . . . . . . . . . . . . . . 135 xcvii

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Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, (2018) 1 SCC 353, 2017 (11) SCALE 754 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 –– Pendency of suit or arbitration proceedings filed before the receipt of demand notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, (2018) 1 SCC 353, 2017 (11) SCALE 754 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 –– Existence of dispute prior to issuance of Section 8 notice. . . . . . . . 136 United Motors Heavy Equipment Pvt Ltd v Sundaram Industries Pvt Ltd., Company Appeal (AT) (Insolvency) No. 118 of 2017, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 –– Onus to prove the existence of oral settlement lies upon the corporate debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 MY Agro Pvt Ltd NCLAT v Amira Pure Foods Pvt Ltd., CP No. 211/ND/2017, New Delhi Bench, NCLT. . . . . . . . . . . . . . . . . . . 136 –– Dispute must be pre-existing and genuine. . . . . . . . . . . . . . . . . . . . 136 Inspira Martifer Solar Limited v. Alex Green Energy Private Limited, CP IB No. 698/KB/2017, Kolkata Bench, NCLT. . . 136 –– Whether failure to send reply to the demand notice received by one of the directors of the Corporate Debtor is fatal?. 137 Mahendra Trading Co. & Others v. Hindustan Controls & Equipment Private Limited, CP (IB) No. 646/KB/2017, Kolkata Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 –– Tribunal has duty to see whether the dispute is spurious, hypothetical or illusory?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 Mahendra Trading Co. & Others v. Hindustan Controls & Equipment Private Limited, CP (IB) No. 646/KB/2017, Kolkata Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 –– A lawyer can issue notice on behalf of an operational creditor . . . 137 Macquarie Bank Limited v Shilpi Cable Technologies Ltd., AIR 2018 SC 498, 2018 2 AWC 1277 SC, 2018 (3) ALD 87, I (2018) BC 219 (SC), 2018 (2) BomCR 212, (2018)1CompLJ 270 (SC), [2018] 142 CLA 1 (SC), (2018) 2 MLJ 552, MANU/SC/1609/2017, 2018 (1) RCR (Civil) 472, [2018] 145 SCL 236 (SC), 2017 (14) SCALE 509, (2018) 2 SCC 674, 2018 (1) SCJ 646 . . . . . . . . . . . . . . . . . . . . . . 138

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Followed in: Sunrise 14 A/S Denmark v Ravi Mahajan, [2018] 146 CLA 239 (SC), MANU/SC/1052/2018, [2018] 149 SCL 227 (SC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 PCK Buderus (India) Special Steel Pvt. Ltd. v Sungil India Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 311 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Shaw Traders v Balaji Paper & Newsprint Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 314 of 2017). . . . . . . . . 138 –– The word “and” occurring in Section 8(2)(a) must be read as “or”. 138 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, 2017 6 AWC 5658 SC, IV (2017) BC 445 (SC), [2017] 205 CompCas 324 (SC), (2017) 4 CompLJ 255 (SC), [2017] 140 CLA 123 (SC), [2017] 140 CLA 123 (SC), MANU/SC/1196/2017, 2018 (1) RCR (Civil) 725, [2017] 144 SCL 37 (SC), 2017 (11) SCALE 754, (2018) 1 SCC 353, 2017(9)SCJ 300. . . . . . . . . . . . . 138 –– Prior notice under section 8 is mandatory. . . . . . . . . . . . . . . . . . . . . 138 Seema Gupta v Supreme Infrastructure India Ltd. & Ors., Company Appeals (AT) (Insolvency) No. 53 of 2017. . . . . . . . . . . . 139 –– The expression “default” bears the same meaning in Sections 7 and 8 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 BK Educational Services Private Limited v Parag Gupta and Associates, IV (2018) BC 317 (SC), (2018) 4 CompLJ 209 (SC), [2018] 146 CLA 380 (SC), MANU/ SC/1160/2018, 2018 (14) SCALE 482, AIR 2018 SC 5601 . . . . . . . . 139 –– Corporate debtor must bring to the notice of the operational creditor the existence of dispute within 10 days of the receipt of demand notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, 2017 6 AWC 5658 SC, IV (2017) BC 445 (SC), [2017] 205 CompCas 324 (SC), (2017) 4 CompLJ 255 (SC), [2017] 140 CLA 123 (SC), [2017] 140 CLA 123 (SC), MANU/SC/1196/2017, 2018 (1) RCR (Civil) 725, [2017] 144 SCL 37 (SC), 2017 (11) SCALE 754, (2018) 1 SCC 353, 2017(9)SCJ 300. . . . . . . . . . . . . 140 –– If a person does not hold any position with or in relation to the ‘Operational Creditor’, cannot issue notice under Section 8 of ‘I & B Code’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

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Macquarie Bank Limited v Uttam Galva Metallics Limited, III (2017) BC 10, [2017] 140 CLA 27, MANU/ NL/0048/2017, [2017] 143 SCL 214. . . . . . . . . . . . . . . . . . . . . . . . . . Followed in: Aruna Hotels Limited v Mr. N. Krishnan, Company Appeal (AT) (Insolvency) No. 59 of 2017. . . . . . . . . . . Aruna Hotels Limited v D. Ramjee, Company Appeal (AT) (Insolvency) No. 87 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . Aruna Hotels Limited v C. Ganapathy, Company Appeal (AT) (Insolvency) No. 88 of 2017. . . . . . . . . . . . . . . . . . . .

140 140 141 141

–– Importing “bona fide” into Section 8(2)(a) so as to judge whether a dispute exists or not is difficult. . . . . . . . . . . . . . . . . . . . . 141 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, 2017 6 AWC 5658 SC, IV (2017) BC 445 (SC), [2017] 205 CompCas 324 (SC), (2017) 4 CompLJ 255 (SC), [2017] 140 CLA 123 (SC), [2017] 140 CLA 123 (SC), MANU/SC/1196/2017, 2018 (1) RCR (Civil) 725, [2017] 144 SCL 37 (SC), 2017 (11) SCALE 754, (2018) 1 SCC 353, 2017(9)SCJ 300. . . . . . . . . . . . . 141 –– In order to come within the ambit of ‘Financial Creditor’, claimant will have to show that money disbursed has been made against ‘consideration for the time value of money’ . . . . . . . 141 B.V.S. Lakshmi v Geometrix Laser Solutions Private Limited, MANU/NL/0221/2017, [2018]142CLA321, IV(2018)BC11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 Followed in: Neeraj Bhatia v Davinder Ahluwalia and Ors., MANU/NL/0018/2018, [2018]146SCL305, [2018]146SCL305. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 –– Application under Section 9 is not maintainable when there is an existence of dispute prior to issuance of notice. . . . . . . 142 Explo Media Pvt. Ltd. v Ambience Pvt. Ltd., (Company Appeal (AT) (Insolvency) No. 20 of 2018). . . . . . . . . . . . . . . . . . . . . 142 –– The Director of the ‘Corporate Debtor’ cannot be held to have been playing mischief in the absence of any specific evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 Naresh Hansrajmal Bulchandani v Deep Constructions Co. & Anr., (Company Appeal (AT) (Insolvency) No. 70 of 2018). 143 –– Appellant cannot claim to have granted the ‘Corporate Debtor’ unsecured loan with interest, when the Board of Directors of the ‘Corporate Debtor’ has decided to accept ‘interest free unsecured loan’ in their meeting. . . . . . . . . . . . . . . . . 143 c

Table of cases – section-wise, topic-wise

Shreyans Realtors Private Limited & Anr. v Saroj Realtors & Developers Private Limited, Company Appeal (AT) (Insolvency) No. 311 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 –– The legislative intent of issuance of Demand Notice under Section 8(1) is not a mere formality but a mandatory provision . . 143 Prajna Prakash Nayak v ASAP Info Systems Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 196 of 2018. . . . . . . 144 –– The Adjudicating Authority will decide an application under Section 9 uninfluenced of the impugned order if it is filed after giving notice to the ‘Corporate Debtor’ and gives reference to the earlier Demand Notice under Section 8(1) of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Rely Paints Pvt. Ltd. v BSL Scaffolding Ltd., Company Appeal (AT) (Insolvency) No. 547 of 2018. . . . . . . . . . . . . . . . . . . . . 144 –– Any person having relation with the company is entitled to issue notice under Section 8 of the Code. . . . . . . . . . . . . . . . . . . . . . 144 Diamond Engineering (Chennai) v Shah Brothers, Company Appeal (AT) (Insolvency) No. 65 of 2017. . . . . . . . . . . . . 145 Section 9 Application for initiation of corporate insolvency resolution process by operational creditor Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 –– Operational creditor to file claim if interim resolution professional stands appointed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 R P Goel v Samtel Colors Ltd, CP No. (IB)-145(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 –– Section 9(1) contains the condition precedent for triggering the Code insofar as an operational creditor is concerned. . . . . . . . 147 Macquarie Bank Limited v Shilpi Cable Technologies Ltd., AIR 2018 SC 498, 2018 2 AWC 1277 SC, 2018 (3) ALD 87, I (2018) BC 219 (SC), 2018 (2) BomCR 212, (2018)1CompLJ 270 (SC), [2018] 142 CLA 1 (SC), (2018) 2 MLJ 552, MANU/SC/1609/2017, 2018 (1) RCR (Civil) 472, [2018] 145 SCL 236 (SC), 2017 (14) SCALE 509, (2018) 2 SCC 674, 2018 (1) SCJ 646). . . . . . . . . . . . . . . . . . . . . . 148 Followed in: V. V. Nagarajan v Vishnusudha Textiles & Anr., III(2018)BC61, MANU/NL/0091/2018. . . . . . . . . . . . . . . . . 148 Sub-section (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

Case Digest on Insolvency and Bankruptcy Code, 2016

–– Notice of application to be sent at the registered office address of the corporate debtor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Exotica Housing & Infrastructure Projects v KAD Housing Pvt Ltd, (IB) 396(PB)/2017, Principal Bench, NCLT . . . . . . . . . . . . . 149 –– Reasonable Opportunity to the Corporate Debtor is to be afforded before admitting Petition for corporate insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Essar Steel India Limited v Reserve Bank of India, [2017] 143 SCL 580 (Guj), [2017] 141 CLA 45 (Guj) . . . . . . . . . . . . . . . . . . 149 –– Application under section 9 cannot be admitted without any notice and without giving any opportunity to the Corporate Debtor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 P.K. Ores Private Limited v Tractors India Private Limited, Company Appeal (AT) (Insolvency) No. 56 of 2017, NCLAT . . . . . 150 –– Ex parte order passed by Adjudicating Authority without prior notice or intimation of hearing to the Corporate Debtors is against the principles of rules of natural justice . . . . . . 150 MCL Global Steel Pvt. Ltd. & Anr. v Essar Projects India Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 29 of 2017, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 –– Application served on director is considered due notice of the application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Inderpreet Singh v Mariners Buildcon India Limited, CP No. (IB)-185(PB)/2017, Special Bench New Delhi, NCLT . . . . . . . . 150 –– No duty of the corporate debtor to inform the change of address to creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Bhash Software Labs Limited v Mobme Wireless Solutions Limited, (2018) 1 CompLJ 42, I (2018) BC 28.. . . . . . . . . . . . . . . . . . 151 –– Substituted service upon the Corporate Debtor. . . . . . . . . . . . . . . . 151 Musaddi Lal Kishan Lal v Ram Dev Int Ltd, (IB) 178(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . 151 Baddi Foils Pvt Ltd v Biotropics Pharma Pvt Ltd, (IB) 239(PB)/2017, Principal Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 –– Notice served on Administrative Office is valid . . . . . . . . . . . . . . . . 151 Central Bank of India v Ashok Magnetics, Chennai Bench, CP/551(IB)/CB/2017, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 –– Postal remarks of “insufficient address” considered as sufficient compliance under the Code. . . . . . . . . . . . . . . . . . . . . . . . 152 Re Innovative Build Estate Pvt Ltd, Chandigarh Bench, NCLT . . . . . . 152 –– Notice served on insufficient or wrong address . . . . . . . . . . . . . . . . 152 cii

Table of cases – section-wise, topic-wise

Anu Elastics Pvt Ltd v Aggarwal Elastics, Company Appeal (AT) (Insolvency) No. 145 of 2017, NCLAT. . . . . . . . . . . . . . . . . . . . 152 Sub-section (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 –– Opportunity to file fresh affidavit allowed . . . . . . . . . . . . . . . . . . . . 152 Supreme Infrastructure India Ltd v Ramaprastha Promoters & Developers Pvt Ltd, CP (IB) No.137/Chd/ Hry/2017, Chandigarh Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 –– Certificate by the Financial Institution is an important piece of information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, (2018) 1 SCC 353, 2017 (11) SCALE 754.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 –– Bank directed to explain refusal to issue certificate under section 9(3)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Re Raj Steels v Sanjay Strips Pvt Ltd, CP (IB)No. 218/9/ HDB/2017, Hyderabad Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . 153 Software One India Private Limited v Emkor Solutions Limited, IB 253 (ND)/2017, New Delhi Bench II, NCLT. . . . . . . . . . 153 Levcon Valves (P) Ltd v Energo Engineering Projects Limited, [2017] 143 SCL7 35.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 –– Procedure is the handmaid of justice and a procedural provision cannot be stretched and considered as mandatory, when it causes serious general inconvenience. . . . . . . 154 Macquarie Bank Limited v Shilpi Cable Technologies Ltd, AIR 2018 SC 498, (2018) 2 SCC 674, 2017 (14) SCALE 509. . . . . . . 155 –– Onus to prove the existence of the alleged defects in the goods supplied lies upon the corporate debtor. . . . . . . . . . . . . . . . . 155 Siddhi Interiors Private Limited v Hi Tech City Developers Private Limited, CP (IB) 310 (ND)/2017 Principal Bench NCLT. . . 155 Siddhi Interiors Private Limited v Amarpali Zodiac Developers Private Limited, CP (IB) 238 (PB)/2017, Principal Bench NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 M/s Amar Tours & Transport v M/s Go Airlines (India) Limited, CP No. (IB) 421 (PB)/2017, Principal Bench NCLT. . . . . . 155 –– Proof of existence of a debt and a default in relation to such debt can be proved by documentary evidence as contemplated by section 9(3)(d) of the Code . . . . . . . . . . . . . . . . . . 156

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Case Digest on Insolvency and Bankruptcy Code, 2016

Crompton Greaves Consumer Electricals Limited v K. P. R. Industries (India) Limited Company, Appeal (AT) (Insolvency) No. 12 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 –– ‘Dispute’ has to be construed broadly and not in narrow spectrum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 One Coat Plaster and Shivam Construction Company v Ambience Private Ltd, CP (1B) No. 07/PB/2017 and CP (1B) No. 08/PB/2017, Principal Bench NCLT . . . . . . . . . . . . . . . . . . 156 –– Bank is bound to issue the certificate as envisaged under section 9(3)(c) of the Code when the creditor approaches the bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 Harmoni Alloys v Teksons Pvt Ltd, NCLT, Mumbai Bench (I), TCP No. 685/I&BP/NCLT/MB/MAH/2017. . . . . . . . . . . . . . . . . 157 –– Withdrawal permitted by the Tribunal before admission. . . . . . . . 157 Alloy Steels Emporium Pvt Ltd v Steelco India Pvt Ltd, (IB)-383(ND)/2017, New Delhi Bench II . . . . . . . . . . . . . . . . . . . . . . 157 –– Withdrawal of petition with liberty to file fresh petition. . . . . . . . . 157 Goel Roadways v Action Ispat Power Pvt Ltd, (IB)422(PB)/2017, Principal Bench,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 –– Imposition of Cost by the Tribunal for delay in filing reply. . . . . . 157 BMI Minerals Pvt Ltd v Fenace Auto Ltd, (IB)-294 (PB)/2017, Principal Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 –– Request for waiver of cost refused . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Sudhir Power Projects Ltd v Rites Ltd, (IB) 312(PB)/201 Principal Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 –– Interim order issued before admission of section 9 application. . 158 Re Dasaprakash Hotels & Resorts Pvt Ltd, CP (IB) No. 118/ALD/2017, Allahabad Bench, NCLT dated 5 October 2017. . . 158 –– Tribunal has summary jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . 158 J P Engineers Pvt Ltd v Indo Alusys Industries Ltd, [2017] 143 SCL 696.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 –– Tribunal directed production of Ledger Accounts. . . . . . . . . . . . . . 158 Vesuvius India Ltd v Fenace Auto Ltd, IB 364/(ND)/2017, New Delhi II Bench, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 –– Appellate Tribunal refused to interfere with the order of admission in the absence of any record in support of the dispute. 159 K Raghavendra Rao v Lakshmi Vilas Bank, Company Appeal (AT)(Insolvency) No. 189 of 2017, NCLAT. . . . . . . . . . . . . . 159

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–– Winding up petition transferred to the Tribunal cannot be considered as application under section 9 of the Code. . . . . . . . . . 159 Transparent Technologies Pvt Ltd v Multi Trade, NCLAT, Company Appeal (AT) (Insolvency) No. 207 of 2017. . . . . . . . . . . . 159 M/s Hyosan Automative India Pvt Ltd v Metecno (India) Pvt Ltd, Company Appeal (AT) (Insolvency) No. 152 of 2017, NCLAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 –– Recommendation of the Board for the appointment of interim resolution professional is not mandatory . . . . . . . . . . . . . . 160 JBB Enterprises v YMS Mobitech Pvt Ltd, Allahabad Benchx, CP No. (IB) 127/ALD/2017, NCLAT . . . . . . . . . . . . . . . . . . 160 –– Expeditious disposal of applications . . . . . . . . . . . . . . . . . . . . . . . . . 160 –– Notice for Rectification of Defect in the Application. . . . . . . . . . . . 160 Sree Mettaliks Limited v UOI, [2017] 203 CompCas 442 (Cal): [2017] 140 CLA 30 (Cal).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 –– Time limit of seven days for removal of defects whether mandatory or directory?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd, AIR 2018 SC 186, [2017] 144 SCL 198 (SC), [2017] 205 CompCas 119(SC). . . . . . . . . . . . . . . . . . . . . . . . . . 162 –– Application for Condonation of Delay in Removing the Defect. . . 162 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd, AIR 2018 SC 186, [2017] 144 SCL 198 (SC), [2017] 205 CompCas 119 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . 163 –– Key elements to be examined by the Tribunal. . . . . . . . . . . . . . . . . 163 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, (2018) 1 SCC 353, 2017 (11) SCALE 754 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 –– No claim can be made against more than one Corporate Debtor in a single petition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 Ishwar Khandelwal v Amrapali Infrastructure Private Limited, Company Application No. IB/21/(PB) 2017, Principal Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 –– Compromise after admission of application under section 9 is immaterial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 Siddharth Nahata v Billets Elektro Werke Pvt Ltd, [2018] 145 SCL 146. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164

Case Digest on Insolvency and Bankruptcy Code, 2016

–– Once the Interim Resolution Professional is appointed, no application for Corporate insolvency resolution process can be admitted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 All Cargo Logistics Limited v HDO Technologies Limited, TCP No. 825/I&BP/NCLT/MB/MAH/2017, Mumbai Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 –– Proof of Registered Partnership Form to be attached to maintain Application under section 9 . . . . . . . . . . . . . . . . . . . . . . . . 165 Narindra & Narindra Steel Corporation v Isolux Corsan India Engineering & Construction Pvt Ltd, CP (IB) NO. 69/Chd/Hry/2017, Chandigarh Bench, NCLT. . . . . . . . . . . . . . . . . . 165 –– Trade Union cannot file application under section 9. . . . . . . . . . . . 165 JK Jute Mill Majdoor Morcha v Juggilal Kamlapat Jute Mills Ltd, [2017] 143 SCL 761, I (2018) BC 33, [2017] 141 CLA 97.. . . . . 165 –– Which Application to be taken up first for Admission by the Tribunal? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 Levcon Valves (P) Ltd v Energo Engineering Projects Limited, [2017] 143 SCL7 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 –– Condition precedent impossible of compliance not a bar to application under section 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 Macquarie Bank Limited v Shilpi Cable Technologies Ltd., AIR 2018 SC 498, 2018 2 AWC 1277 SC, 2018 (3) ALD 87, I (2018) BC 219 (SC), 2018 (2) BomCR 212, (2018)1CompLJ 270 (SC), [2018] 142 CLA 1 (SC), (2018) 2 MLJ 552, MANU/SC/1609/2017, 2018 (1) RCR (Civil) 472, [2018] 145 SCL 236 (SC), 2017 (14) SCALE 509, (2018) 2 SCC 674, 2018 (1) SCJ 646 . . . . . . . . . . . . . . . . . . . . . . 167 Followed in: Sunrise 14 A/S Denmark v Ravi Mahajan, [2018] 146 CLA 239 (SC), MANU/SC/1052/2018, [2018] 149 SCL 227 (SC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 –– The NCLAT will decide applications under section 7 and 9 of the Code on the footing that the Limitation Act will apply to such petitions/applications. . . . . . . . . . . . . . . . . . . . . . . . . . 167 BK Educational Services Private Limited v Parag Gupta and Associates, IV (2018) BC 317 (SC), (2018) 4 CompLJ 209 (SC), [2018] 146 CLA 380 (SC), MANU/ SC/1160/2018, 2018 (14) SCALE 482, AIR 2018 SC 5601 . . . . . . . . 167 –– Joint application under section 9 by one or more ‘operational creditor’ is not maintainable . . . . . . . . . . . . . . . . . . . . . 167

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Uttam Galva Steels Limited v DF Deutche Forfait AG and Ors., I (2018) BC 1, [2017] 204 CompCas 511, [2017] 140 CLA 36, MANU/NL/0050/2017, [2017] 143 SCL 318. . . . . . . . 167 –– A lawyer can issue notice on behalf of an operational creditor . . . 167 Macquarie Bank Limited v Shilpi Cable Technologies Ltd., AIR 2018 SC 498, 2018 2 AWC 1277 SC, 2018 (3) ALD 87, I (2018) BC 219 (SC), 2018 (2) BomCR 212, (2018)1CompLJ 270 (SC), [2018] 142 CLA 1 (SC), (2018) 2 MLJ 552, MANU/SC/1609/2017, 2018 (1) RCR (Civil) 472, [2018] 145 SCL 236 (SC), 2017 (14) SCALE 509, (2018) 2 SCC 674, 2018 (1) SCJ 646 . . . . . . . . . . . . . . . . . . . . . . 168 Followed in: Sunrise 14 A/S Denmark v Ravi Mahajan, [2018] 146 CLA 239 (SC), MANU/SC/1052/2018, [2018] 149 SCL 227 (SC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 PCK Buderus (India) Special Steel Pvt. Ltd. v Sungil India Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 311 of 201, . . . . 168 Shaw Traders v Balaji Paper & Newsprint Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 314 of 2017. . . . . . . . . . . . 168 –– Corporate debtor must bring to the notice of the operational creditor the existence of dispute within 10 days of the receipt of demand notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, 2017 6 AWC 5658 SC, IV (2017) BC 445 (SC), [2017] 205 CompCas 324 (SC), (2017) 4 CompLJ 255 (SC), [2017] 140 CLA 123 (SC), [2017] 140 CLA 123 (SC), MANU/SC/1196/2017, 2018 (1) RCR (Civil) 725, [2017] 144 SCL 37 (SC), 2017 (11) SCALE 754, (2018) 1 SCC 353, 2017(9)SCJ 300. . . . . . . . . . . . . 168 –– Application under section 9 is not maintainable in the absence of evidence of debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd., Company Appeal (AT) (Insolvency) No. 189 of 2018). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 –– Where the principle amount has been paid and no interest is payable as per agreement, an application under section 9is not maintainable on the basis of claims for entitlement of interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 Krishna Enterprises v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 144 of 2018; . . . . . . . . . . . . . . . . . . . . 169

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Om Industrial Corporation v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 145 of 2018; . . . . . . . . . . . 169 Swastik Enterprises v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 146 of 2018; Orissa Sales v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 147 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 –– Section 9(3)(c) would have to be construed as being directory in nature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 Macquarie Bank Limited v Shilpi Cable Technologies Ltd., AIR 2018 SC 498, 2018 2 AWC 1277 SC, 2018 (3) ALD 87, I (2018) BC 219 (SC), 2018 (2) BomCR 212, (2018)1CompLJ 270 (SC), [2018] 142 CLA 1 (SC), (2018) 2 MLJ 552, MANU/SC/1609/2017, 2018 (1) RCR (Civil) 472, [2018] 145 SCL 236 (SC), 2017 (14) SCALE 509, (2018) 2 SCC 674, 2018 (1) SCJ 646 . . . . . . . . . . . . . . . . . . . . . . 170 –– Petition under section 433(e) of the Companies Act, 1956 on transfer under Sub-sections (1) and (2) of section 434 of the Companies Act, 2013 cannot be treated to be an application under sections 7, 9 or 10 of the I&B Code. . . . . . . . . . . 170 Unimark Remedies Ltd. v Ashok Alco Chem Ltd., (Company Appeal (AT) (Insolvency) No. 45 of 2017) . . . . . . . . . . . 170 –– When CIRP initiates, the Adjudicating Authority has no jurisdiction to initiate another CIRP against the same debtor. . . . 170 Meyer Apparel Ltd. & Anr. v Surbhi Body Products Pvt. Ltd. & Anr., (Company Appeal (AT) (Insolvency) No. 33 of 2017).171 –– Period of seven days for rectifying defects is not mandatory . . . . . 171 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd. and Ors., AIR 2018 SC 186, 2018 (2) ABR 324, 2018 (1) AKR 663, 2018 (4) ALLMR 462, [2017] 205 CompCas 119 (SC), (2018) 1 CompLJ 217(SC), [2017] 141 CLA 174 (SC), 2018-1-LW813, MANU/ SC/1248/2017, [2017] 144 SCL 198 (SC), (2017) 16 SCC 143. . . . . 171 Followed in: Arcelor Mittal India Private Limited v Satish Kumar Gupta & Ors., AIR 2018 SC 5646, [2018] 146 CLA 293 (SC), MANU/SC/1123/2018, 2018 (13) SCALE 381 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 –– Fresh application can be filed under section 7 or Section 9 of the Code in terms of Second proviso to Rule 5 of The Companies (Transfer of Pending Proceedings) Second Amendment Rules, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 cviii

Table of cases – section-wise, topic-wise

Paharpur Cooling Towers Limited v Dalmia Cement (Bharat) Limited, Company Appeal (AT) (Insol.) No. 127 of 2017. 172 Followed in: Karismaa Foundations Pvt. Ltd. v Indust Cityscapes Constructions Pvt. Ltd., [2018]143CLA66: MANU/NL/0002/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 –– “Winding up” under the Companies Act, 2013 has to be treated as “liquidation” under the Code. . . . . . . . . . . . . . . . . . . . . . . 172 Forech India Pvt. Ltd. v Edelweiss Assets Reconstruction Company Ltd. & Anr.,Company Appeal (AT) (Insolvency) No. 202 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 Followed in: Innoventive Industries Limited v Kumar Motors Private Limited, III(2018)BC1, MANU/NL/0019/2018. . 174 Birender Kumar v Adel Landmarks Ltd., ([2018]147SCL62, MANU/NL/0016/2018). . . . . . . . . . . . . . . . . . 174 State Bank of India v Shakti Bhog Foods Limited, Company Appeal (AT) (Insolvency) No. 83 of 2018, MANU/NL/0041/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 Indiabulls Housing Finance Ltd. v Shree Ram Urban Infrastructure Ltd., Company Appeal (AT) (Insolvency) No. 252 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 –– Petition under Section 9 is not maintainable when there is an existence of dispute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 Bajoria Holdings Pvt. Ltd. v Bard Roy Infotech Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 275 of 2017, MANU/NL/0346/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 –– Interim Resolution Professional will have to pay for essential goods or services on behalf of the corporate debtor . . . . 174 Uttarakhand Power Corporation Ltd. v ANG Industries Ltd., Company Appeal (AT) (Insolvency) No. 298 of 2017 . . . . . . . 175 –– Application under Section 9 cannot be entertained when there is an existence of dispute with regard to the quality of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 Shivarad Polyfab v OLAM Agro Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 261 of 2017, MANU/ NL/0014/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 –– Application under Section 9 can be filed through Resolution Professional during Corporate Insolvency Resolution Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 Electrosteel Steels Ltd. v Imperia Structures Ltd., Company Appeal (AT) (Insolvency) No. 238 of 2017. . . . . . . . . . . . . . . . . . . . . 175 cix

Case Digest on Insolvency and Bankruptcy Code, 2016

–– The applicant under Section 7 or 9 of the Code is liable to incur the expenses of the Resolution Professional which will get reimbursed by the Committee of Creditors. . . . . . . . . . . . . 176 State Bank of India v SKC Retails Ltd. through IRP & Anr., [2018]210CompCas69, [2018]144CLA324, MANU/ NL/0033/2018, [2018]147SCL422; . . . . . . . . . . . . . . . . . . . . . . . . . . 176 State Bank of India v Tech Megacorp International Pvt. Ltd. through IRP & Anr., Company Appeal (AT) (Insolvency) No. 09 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 –– Application under Section 9 is not maintainable when there is an existence of dispute prior to issuance of notice. . . . . . . 176 Explo Media Pvt. Ltd. v Ambience Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 20 of 2018. . . . . . . . . . . . . . . . . . . . . . 176 –– In an application under section 9, the Adjudicating Authority will have to determine whether there is an “operational debt” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 Mobilox Innovations Private Limited v Kirusa Software Private Limited, (AIR 2017 SC 4532, 2017 6 AWC 5658 SC, IV (2017) BC 445 (SC), [2017] 205 CompCas 324 (SC), (2017) 4 CompLJ 255 (SC), [2017] 140 CLA 123 (SC), [2017] 140 CLA 123 (SC), MANU/SC/1196/2017, 2018 (1) RCR (Civil) 725, [2017] 144 SCL 37 (SC), 2017 (11) SCALE 754, (2018) 1 SCC 353, 2017(9)SCJ 300). . . . . . . . . . . . 177 –– ‘Power of Attorney Holder’ is not competent to file an application on behalf of a ‘Financial Creditor’ or ‘Operational Creditor’ or ‘Corporate Applicant’. . . . . . . . . . . . . . . . 177 Palogix Infrastructure Private Limited v ICICI Bank Limited, (2018)3CompLJ97, II(2018)BC32, [2017]141CLA83, MANU/NL/0095/2017, [2017]144SCL319. . . . . 179 Followed in: Mahesh Kumar Sureka v SBER Bank & Ors., [2018]208CompCas21, (2018)3CompLJ205, [2018]144CLA339, MANU/NL/0063/2018. . . . . . . . . . . . . . . . . . 179 Rajnish Gupta v Small Industrial Development Bank of India, Company Appeal (AT) (Insolvency) No. 126 of 2018 . . . . 179 –– The true construction of Section 9(3)(c) is that it is a procedural provision, which is directory in nature. . . . . . . . . . . . . . 179 Macquarie Bank Limited v Shilpi Cable Technologies Ltd., AIR 2018 SC 498, 2018 2 AWC 1277 SC, 2018 (3) ALD 87, I (2018) BC 219 (SC), 2018 (2) BomCR 212, (2018)1CompLJ 270 (SC), [2018] 142 CLA 1 (SC), cx

Table of cases – section-wise, topic-wise

(2018) 2 MLJ 552, MANU/SC/1609/2017, 2018 (1) RCR (Civil) 472, [2018] 145 SCL 236 (SC), 2017 (14) SCALE 509, (2018) 2 SCC 674, 2018 (1) SCJ 646 . . . . . . . . . . . . . . . . . . . . . . 181 –– The petition under Section 9 is not maintainable on commencement of arbitral proceedings, if there is an existence of dispute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 Parmod Yadav & Anr. v Divine Infracon Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 251 of 2017. . . . . . . . . . . . 181 –– The ground that there was an existence of dispute between the ‘Corporate Debtor’ and the ‘Financial Creditor’ and the matter was referred for Arbitration, can be taken to oppose an application under Section 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 Nandhitha Vedam v Udhyaman Investments Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 166 of 2018. . . . . . . 182 –– If the ‘debt’ is disputed, the question of default does not arise . . . 182 Nayan Shah v Viral Rajarashi Mehta & Anr., Company Appeal (AT) (Insolvency) No. 307 of 2018). . . . . . . . . . . . . . . . . . . . 182 –– No person, including the ‘shareholders’ or the ‘personal guarantor’ etc., has a right to be heard at the stage of admission of the application under Sections 7 and 9 of the Code. 182 Axis Bank Ltd. v Lotus Three Developments Ltd.& Ors., (IV (2018) BC 92, [2018] 210 CompCas 110, [2018] 146 CLA 207, MANU/NL/0179/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184 –– The Adjudicating Authority will decide an application under Section 9 uninfluenced of the impugned order if it is filed after giving notice to the ‘Corporate Debtor’ and gives reference to the earlier Demand Notice under Section 8(1) of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184 Rely Paints Pvt. Ltd. v BSL Scaffolding Ltd., Company Appeal (AT) (Insolvency) No. 547 of 2018. . . . . . . . . . . . . . . . . . . . . 184 –– Raising of dispute in regard to quality of goods being inferior for the first time in reply to demand notice would not constitute a prior dispute as a defence to the initiation of Corporate Insolvency Resolution Process. . . . . . . . . . . . . . . . . . . 184 Rajeev K Aggarwal v Panipat Texo Fabs Pvt. Ltd., [2019]151SCL279, [2019]151SCL279, MANU/NL/0293/2018. . . . 185 –– Sections 3 and 4 of the Usurious Loans Act, 1918 are not applicable to the proceedings under Section 7 or 9 of the Code . . 185

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Naveen Luthra & Ors. v Bell Finvest (India) Ltd. & Anr., [2019]148CLA70, MANU/NL/0298/2018 . . . . . . . . . . . . . . . . . . . . . 185 –– Even if one or more than one of the partners is the ‘Corporate Debtor’ from the partnership firm, application under section 9 is not maintainable. . . . . . . . . . . . . . . . . . . . . . . . . . 186 Gammon India Ltd. v Neelkanth Mansions and Infrastrucure Pvt. Ltd., [2019]212CompCas579. . . . . . . . . . . . . . . . 186 Sub-Section (5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 –– No direct contract between the applicant and the corporate debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 Z-Tronics Infratel Private Limited v M/s Wipro Enterprises Private Limited, CP(IB) No. 18/BB/2017, Bengaluru Bench NCLT.186 –– Whether the application preferred by appellant under Section 9 can be rejected at the threshold on the ground of technicalities that the notice has not been issued under Section 8 of the Code or not?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 Era Infra Engineering Ltd v Prideco Commercial Projects Pvt Ltd, Company Appeal (AT) (Ins) No.3 1 of 2017, NCLAT. . . . . 187 –– Transfer of Case from one Bench to another can be done by President of the Tribunal only. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Laqshya Media Pvt Ltd v Hover Automotive India Pvt Ltd, TCP No. 646/(MAH)/2017, Mumbai Bench (I). . . . . . . . . . . . . . . . . 187 –– Resolution process cannot be set aside on the ground that the parties agreed for settlement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Blue Stamping and Forgings Ltd. v BMM Ispat Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 160 of 2018. . . . . . . . . . . . 188 –– Once the operational creditor has filed an application, the Adjudicating Authority can reject it under Section 9(5)(2)(d). . . . 188 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, 2017 6 AWC 5658 SC, IV (2017) BC 445 (SC), [2017] 205 CompCas 324 (SC), (2017) 4 CompLJ 255 (SC), [2017] 140 CLA 123 (SC), [2017] 140 CLA 123 (SC), MANU/SC/1196/2017, 2018 (1) RCR (Civil) 725, [2017] 144 SCL 37 (SC), 2017 (11) SCALE 754, (2018) 1 SCC 353, 2017(9)SCJ 300). . . . . . . . . . . . 188 –– The dispute raised on imaginary facts and circumstances while replying to the demand notice cannot be treated to be an ‘existence of dispute’ for rejecting the application under Section 9 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 cxii

Table of cases – section-wise, topic-wise

AVON Capital v Tattva & Mittal Lifespaces Pvt. Ltd, [2018]149SCL555, MANU/NL/0189/2018. . . . . . . . . . . . . . . . . . . . 189 Section 10 Initiation of corporate insolvency resolution process by corporate applicant Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 –– Operational Creditors to submit claims before the Interim Resolution Professional on admission of application under section 10 filed by the corporate debtor. . . . . . . . . . . . . . . . . . . . . . . 190 Incredible Unique Buildcon Ltd v Clutch Auto Ltd, [2017] 142 SCL 684, [2017] 140 CLA 72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 –– Pendency of suits cannot be a ground to deny admission of an application under Section 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 Unigreen Global Private Limited v Punjab National Bank & Ors., II(2018)BC132, [2018]142CLA131, MANU/ NL/0192/2017, [2018]145SCL272. . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 –– Non-mentioning of suit(s) pending between the parties cannot termed to be suppression of facts. . . . . . . . . . . . . . . . . . . . . . 191 Unigreen Global Private Limited v Punjab National Bank & Ors., II(2018)BC132, [2018]142CLA131, MANU/ NL/0192/2017, [2018]145SCL272. . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 –– Application under Section 10 cannot be filed where winding up proceedings has already been initiated by the High Court or Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 Unigreen Global Private Limited v Punjab National Bank & Ors., II(2018)BC132, [2018]142CLA131, MANU/ NL/0192/2017, [2018]145SCL272. . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 Followed in: Innoventive Industries Limited v Kumar Motors Private Limited, III(2018)BC1, MANU/NL/0019/2018. . 193 Krishna Kraftex Pvt. Ltd. v HDFC Bank & Ors, [2018]146SCL72, MANU/NL/0005/2018 . . . . . . . . . . . . . . . . . . . 193 Antrix Diamond Exports Pvt. Ltd. v Bank of India and Ors, MANU/NL/0007/2018, [2018]146SCL28 . . . . . . . . . . . . . . . 193 Ameya Laboratories Ltd. (ALL) v Kotak Mahindra Bank & Ors., [2018]210CompCas279, (2018)4CompLJ392, MANU/NL/0004/2018, [2018]145SCL676 . . . . . . . . . . . . . . . . . . 193 Birender Kumar v Adel Landmarks Ltd., [2018]147SCL62, MANU/NL/0016/2018 . . . . . . . . . . . . . . . . . . . 193

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Neesa Leisure Limited, Ahmedabad v Asset Reconstruction Company Limited, Company Appeals (AT) (Insolvency) Nos. 62 & 63 of 2018, MANU/ NL/0115/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 Indiabulls Housing Finance Ltd. v Shree Ram Urban Infrastructure Ltd., Company Appeal (AT) (Insolvency) No. 252 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 –– Filing of Application under section 10 implies dropping of proceedings before Debt Recovery Tribunal by the Financial Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 Global Coke Limited Kolkata Bench, C.P. (IB) No. 69/ KB/2018, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 –– Notice to secured creditors before admitting application under Section 10 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 Re Shree Bhawani Paper Mills Pvt Ltd, C.P. (IB) No. 110/ ALD/2017, Allahabad Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . 194 –– Initiating Corporate Insolvency Resolution Process under Section 10 does not affect the rights of financial creditors. . . . . . . 194 Sri Vinayaka Paper & Boards Ltd v Union Bank of India, C.P. (IB) No. 173/10/HBD/2017, Hyderabad Bench, NCLT. . . . . . . 194 –– Decision of the shareholders of a company is required to file an application under Section 10 of the Code . . . . . . . . . . . . . . . 194 Gaja Trustee Company Private Limited & Ors. v Haldia Coke and Chemicals Private Limited, IV(2018)BC77, [2018]145CLA303, [2018]149SCL1, [2018]149SCL1 . . . . . . . . . . . . 195 Followed in: Horseshoe Entertainment & Hospitality Private Limited v The Comedy Store Limited, Company Appeal (AT) (Insolvency) No. 214 of 2017. . . . . . . . . . 195 –– Petition under Section 433(e) of the Companies Act, 1956 on transfer under sub-sections (1) and (2) of section 434 of the Companies Act, 2013 cannot be treated to be an application under sections 7, 9 or 10 of the I&B Code. . . . . . . . . . . 195 Unimark Remedies Ltd. v Ashok Alco Chem Ltd., Company Appeal (AT) (Insolvency) No. 45 of 2017. . . . . . . . . . . . . 195 –– The shareholder has a right to decide whether approving or disapproving the decision be proceeded under Section 10 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 Export-Import Bank of India & Anr. v Astonfield Solar (Gujarat) Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 754 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 cxiv

Table of cases – section-wise, topic-wise

–– Decision of the shareholders of a company is required to file an application under Section 10 of the Code . . . . . . . . . . . . . . . 196 Gaja Trustee Company Private Limited & Ors. v Haldia Coke and Chemicals Private Limited, IV(2018)BC77, [2018]145CLA303, [2018]149SCL1, [2018]149SCL1 . . . . . . . . . . . . 197 Followed in: Horseshoe Entertainment & Hospitality Private Limited v The Comedy Store Limited, Company Appeal (AT) (Insolvency) No. 214 of 2017. . . . . . . . . . 197 Sub-section (4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 –– Cost of Rs. 10 lacs imposed on corporate debtor for fraudulent and malicious proceedings. . . . . . . . . . . . . . . . . . . . . . . . 197 Neeta Chemicals, NCLT Hyderabad Bench . . . . . . . . . . . . . . . . . . . . . . 197 Neeta Chemicals (I) Pvt. Ltd. v State Bank of India, Company Appeal (AT) (Insolvency) No. 174 of 2017, NCLAT . . . . 198 –– Liberty can be granted to withdraw the appeal to enable the Board of Directors to place matter before the shareholders and creditors and to take its approval for filing application under Section 10 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 Horseshoe Entertainment & Hospitality Private Limited v The Comedy Store Limited, Company Appeal (AT) (Insolvency) No. 214 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 –– Delay in passing order by Ahmedabad Bench of Tribunal. . . . . . . 198 Vaman Fabrics Private Limited v Punjab National Bank and Anr., Company Appeal (AT) (Insolvency) No. 212 of 2018, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 –– Period of fourteen days for passing of Order by the Tribunal is not mandatory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd, AIR 2018 SC 186, [2017] 144 SCL 198 (SC): [2017]205CompCas119(SC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 –– Counting the period of fourteen days. . . . . . . . . . . . . . . . . . . . . . . . . 200 JK Jute Mills Company Limited v Surendra Trading Company, (2017) 204 Comp Cas 483. . . . . . . . . . . . . . . . . . . . . . . . . 200 –– Notice for Rectification of Defect in the Application. . . . . . . . . . . . 201 Sree Mettaliks Limited v UOI, [2017], 203 CompCas 442 (Cal), [2017] 140 CLA 30 (Cal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 –– The Adjudicating Authority has to satisfy that the application is not defective. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201

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Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd, AIR 2018 SC 186, [2017] 144 SCL 198 (SC), [2017]205CompCas119(SC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 –– Is time limit of seven days for removal of defects mandatory or directory?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd, AIR 2018 SC 186, [2017] 144 SCL 198 (SC), [2017]205CompCas119(SC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 –– Application for Condonation of Delay in Removing the Defect. . . 203 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd, AIR 2018 SC 186, [2017] 144 SCL 198 (SC), [2017] 205 CompCas 119 (SC).. . . . . . . . . . . . . . . . . . . . . . . . . 204 –– Period of 7 days for removal of defects commences from date of receipt of notice and not from the date of order . . . . . . . . . 204 Palogix Infrastructure Private Limited v ICICI Bank Limited, [2017] 144 SCL 319, [2017] 141 CLA 83.. . . . . . . . . . . . . . . 205 –– Dismissal of Application for non-prosecution . . . . . . . . . . . . . . . . . 205 Re ONGC Employees Contributory Fund Trust, Allahabad Bench, NCLT, CP No. (IB)/89/ALD/2017. . . . . . . . . . . . . . . . . . . . . . 205 –– Section 10 petition filed beyond the period of 180 days of the Sick Industrial Companies (Special Provisions) Act, 1985 rejected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Re Global Coke Ltd, Kolkata Bench, NCLT, CP(IB)No. 511/KB/2017.206 –– Pendency of proceedings before DRT and invocation of SARFAESI Act is no ground not to commence insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 Sarthak Creations, Ahmedabad Bench, NCLT. . . . . . . . . . . . . . . . . . . . 206 Followed in: Ruby Cables Ltd v Bank of Baroda, Ahmedabad Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 –– Application under section 10 filed after statutory time limit of 180 days upon repeal of Sick Industrial Companies (Special Provision) Act, 1985 is not maintainable . . . . . . . . . . . . . . 206 Tayo Rolls Limited, CP(IB)No. 398/KB/2017, Kolkata Bench NCLT. . 207 –– Period of seven days for rectifying defects is not mandatory . . . . . 208 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd. and Ors., AIR 2018 SC 186, 2018 (2) ABR 324, 2018 (1) AKR 663, 2018 (4) ALLMR 462, [2017] 205 CompCas 119 (SC), (2018) 1 CompLJ 217(SC),

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[2017] 141 CLA 174 (SC), 2018-1-LW813, MANU/ SC/1248/2017, [2017] 144 SCL 198 (SC), (2017) 16 SCC 143. . . . . 208 Followed in: ArcelorMittal India Private Limited v Satish Kumar Gupta & Ors., AIR 2018 SC 5646, [2018] 146 CLA 293 (SC), MANU/SC/1123/2018, 2018 (13) SCALE 381. . . 208 –– If there is a debt and default and the Corporate Applicant is not ineligible under Section 11, application under Section 10 has to be admitted, unless it is incomplete. . . . . . . . . . . 208 Unigreen Global Private Limited v Punjab National Bank & Ors., II(2018)BC132: [2018]142CLA131: MANU/ NL/0192/2017: [2018]145SCL272 . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 Followed in: Antrix Diamond Exports Pvt. Ltd. v Bank of India and Ors., MANU/NL/0007/2018, [2018]146SCL28. . . . 209 Krishna Kraftex Pvt. Ltd. v HDFC Bank & Ors., [2018]146SCL72: MANU/NL/0005/2018 . . . . . . . . . . . . . . . . . . . 210 Ameya Laboratories Ltd. (ALL) v Kotak Mahindra Bank & Ors., [2018]210CompCas279, (2018)4CompLJ392, MANU/NL/0004/2018, [2018]145SCL676 . . . . . . . . . . . . . . . . . . 210 BCL Homes v Canara Bank & Ors., [2018]208CompCas609, (2018)3CompLJ620, MANU/ NL/0037/2018). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 Neeta Chemicals (I) Pvt. Ltd. v State Bank of India, III(2018)BC120, MANU/NL/0051/2018. . . . . . . . . . . . . . . . . . . . . 210 –– Action taken by a ‘Financial Creditor’ under Section 13(4) of the SARFAESI Act, 2002 against the Corporate Debtor or a suit pending against Corporate Debtor under Section 19 of DRT Act, 1993 cannot be a ground to reject an application under Section 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 Unigreen Global Private Limited Vs. Punjab National Bank & Ors., II(2018)BC132, [2018]142CLA131, MANU/ NL/0192/2017, [2018]145SCL272. . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 Followed in: Antrix Diamond Exports Pvt. Ltd. v Bank of India and Ors., MANU/NL/0007/2018, [2018]146SCL28; . . . 211 Ameya Laboratories Ltd. (ALL) v Kotak Mahindra Bank & Ors., [2018]210CompCas279, (2018)4CompLJ392, MANU/NL/0004/2018, [2018]145SCL676;. . . . . . . . . . . . . . . . . . 211 BCL Homes v Canara Bank & Ors., ([2018]208CompCas609, (2018)3CompLJ620, MANU/NL/0037/2018; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 Neeta Chemicals (I) Pvt. Ltd. v State Bank of India, (III(2018)BC120, MANU/NL/0051/2018);. . . . . . . . . . . . . . . . . . . 211 cxvii

Case Digest on Insolvency and Bankruptcy Code, 2016

–– Code overrides SARFAESI Act, 2002 etc.. . . . . . . . . . . . . . . . . . . . . . 211 Unigreen Global Private Limited v Punjab National Bank & Anr., Company Appeal (AT) (Insolvency) No. 81 of 2017, NCLAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 –– Application cannot be rejected on extraneous grounds . . . . . . . . . 211 BCL Homes Ltd. v Canara Banks & Ors., Company Appeal (AT)(Insolvency) No. 02 of 2018, NCLAT. . . . . . . . . . . . . . . . . . . . . . 212 Section 11 Persons not entitled to make application –– Operational creditor to file claim if interim resolution professional stands appointed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 R P Goel v Samtel Colors Ltd, Principal Bench, CP No. (IB)-145(PB)/2017, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Vertiv Energy Private Limited v Techpro Systems Limited, Principal Bench, CP No. (IB)-155(PB)/2017, NCLT. . . . . . . . . . . . . . 213 –– Corporate applicants barred from filing application under section 10 of the Code before the expiry of 12 months from completion of earlier corporate insolvency resolution process . . . 213 Jagir Singh v Ranbir Singh, AIR 1979 SC 381, (1979) 1 SCC 560, [1979] 2 SCR 282. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 –– Application under Section 10 cannot be filed where winding up proceedings has already been initiated by the High Court or Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 Unigreen Global Private Limited v Punjab National Bank & Ors., II(2018)BC132, [2018]142CLA131, MANU/ NL/0192/2017, [2018]145SCL272. . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Followed in: Innoventive Industries Limited v Kumar Motors Private Limited, III(2018)BC1, MANU/NL/0019/2018. . 215 Krishna Kraftex Pvt. Ltd. v HDFC Bank & Ors., [2018]146SCL72, MANU/NL/0005/2018 . . . . . . . . . . . . . . . . . . . 215 Antrix Diamond Exports Pvt. Ltd. v Bank of India and Ors., [MANU/NL/0007/2018, [2018]146SCL28. . . . . . . . . . . . . . 215 Ameya Laboratories Ltd. (ALL) v Kotak Mahindra Bank & Ors, [2018]210CompCas279, (2018)4CompLJ392, MANU/NL/0004/2018, [2018]145SCL676 . . . . . . . . . . . . . . . . . . 215 Birender Kumar v Adel Landmarks Ltd., [2018]147SCL62, MANU/NL/0016/2018 . . . . . . . . . . . . . . . . . . . 215 Neesa Leisure Limited, Ahmedabad v Asset Reconstruction Company Limited, Company Appeals cxviii

Table of cases – section-wise, topic-wise

(AT) (Insolvency) Nos. 62 & 63 of 2018, MANU/ NL/0115/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Indiabulls Housing Finance Ltd. v Shree Ram Urban Infrastructure Ltd., Company Appeal (AT) (Insolvency) No. 252 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216 –– If there is a debt and default and the Corporate Applicant is not ineligible under Section 11, application under Section 10 has to be admitted, unless it is incomplete. . . . . . . . . . . 216 Unigreen Global Private Limited v Punjab National Bank & Ors., II(2018)BC132: [2018]142CLA131: MANU/ NL/0192/2017: [2018]145SCL272 . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 Followed in: Antrix Diamond Exports Pvt. Ltd. v Bank of India and Ors., MANU/NL/0007/2018, [2018]146SCL28; . . . 217 Krishna Kraftex Pvt. Ltd. v HDFC Bank & Ors., [2018]146SCL72: MANU/NL/0005/2018; . . . . . . . . . . . . . . . . . . 217 Ameya Laboratories Ltd. (ALL) v Kotak Mahindra Bank & Ors., [2018]210CompCas279, (2018)4CompLJ392, MANU/NL/0004/2018, [2018]145SCL676;. . . . . . . . . . . . . . . . . . 217 BCL Homes v Canara Bank & Ors., [2018]208CompCas609, (2018)3CompLJ620, MANU/ NL/0037/2018; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 Neeta Chemicals (I) Pvt. Ltd. v State Bank of India, III(2018)BC120, MANU/NL/0051/2018. . . . . . . . . . . . . . . . . . . . . 217 Section 12 Time-limit for completion of insolvency resolution process Sub-section (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 –– Extension on the ground that resolution plans have been submitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 Re Recorders and Medicare Systems Private Limited, CA No. 140/2107 in CP(IB) No. 7/Chd/Hry/2017, Chandigarh Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 –– Circumstances must exist for grant of extension . . . . . . . . . . . . . . . 218 Re Sky Blue Papers Private Limited, CA No. 154/2017, CP No. IB No. 09/Chd/CHD/2017, Chandigarh Bench, NCLT. . . . . . . 219 –– ‘Golden Six’ grounds for exclusion of certain period from statutory period allowed for Corporate Insolvency Resolution Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 Quinn Logistics India Pvt. Ltd. v Mack Soft Tech Pvt. Ltd., Mohd. Sabir Parvez, Mr. M.L. Jain, (Resolution cxix

Case Digest on Insolvency and Bankruptcy Code, 2016

Professional), Company Appeal (AT) (Insolvency) No. 185 of 2018, NCLAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 –– Application for extension of time period of Corporate insolvency resolution process can be filed after the expiry of the period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 Amar Remedies Ltd. (Through the Resolution Professional) v IDBI Bank Ltd. & Ors, Company Appeal (AT) (Insolvency) No. 59 of 2018, NCLAT. . . . . . . . . . . . . . . . . . . . . 221 –– Application for extension of time can be filed only if committee of creditors approves it but it can be filed after expiry of 180 days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 Quantum Limited (Corporate Debtor) v Indus Finance Corporation Limited, Company Appeal (AT) (Insolvency) No. 35 of 2018, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . . . 221 –– Application for extension of time on the ground that more time is required to get resolution plan from stakeholders . . . . . . . 221 Peerless Financial Services Ltd v Rasoya Proteins Ltd, MA 676/2017, CP 8561I&BP 2017, Mumbai Bench NCLT . . . . . . . . . . . 221 –– Extension can be granted on the ground that Resolution Plan is under active consideration of the Committee of Creditors.222 Re Raman Ispat Private Limited, CA No. 191/2017, CP (IB) No. 23/ALD/2017, Allahabad Bench, NCLT,. . . . . . . . . . . . . . . . . . . 222 –– Application for extension of the period of the corporate insolvency resolution process can be filed after expiry of 180 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 Quantum Limited v Indus Finance Corporation Limited, IV(2018)BC1, [2018]144CLA157, MANU/NL/0024/2018] . . . . . . . 222 Followed in: Amit Basia & Anr. v Anant Overseas Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 41 of 2018. . . . 222 Sub-section (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 –– Extension Refused as no useful purpose will be served. . . . . . . . . 223 Re REI Agro Limited, I.T.A. No. 1919/KOL/2012, Kolkata Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 –– Notice by the Tribunal to Bank to show-cause as to why Contempt Proceedings be not initiated. . . . . . . . . . . . . . . . . . . . . . . 223 Re Clutch Auto Ltd., (IB) 15(PB)/2017, Principal Bench, NCLT, New Delhi. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 –– Extension granted based on Progress Report filed by the Resolution Professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 cxx

Table of cases – section-wise, topic-wise

Rural Electrification Corporation Ltd. v Ferro Alloys Corporation Ltd., CP(IB)No. 251/KB/2017, Kolkata Bench, NCLT.224 –– Time periods mentioned in Section 12 are mandatory. . . . . . . . . . 224 Arcelor Mittal India Private Limited v Satish Kumar Gupta and Ors., AIR 2018 SC 5646, [2018] 146 CLA 293 (SC), MANU/SC/1123/2018, 2018 (13) SCALE 381. . . . . . . . . . . . . . . . . . 224 Section 12A Withdrawal of application under section 7, 9 or 10 –– Section 12A of the Code would be applicable when admission for insolvency resolution application has been admitted by the Adjudicating Authority and there is no challenge to the admission of the application. . . . . . . . . . . . . . . . . . 224 Praveen Arjun Patel v JK Lakshmi Cement Ltd. And in the matter of Haryana Construction (I.A. No. 1140of 2018 In Company Appeal (AT) (Insolvency) No. 264 of 2018), . . . . . . . . 225 Praveen Arjun Patel v JK Lakshmi Cement Ltd. And in the matter of Ved Contracts Private Ltd. (I.A. No. 1141 of 2018 In Company Appeal (AT) (Insolvency) No. 264 of 2018), . . . 225 Praveen Arjun Patel v JK Lakshmi Cement Ltd. And in the matter of Space Height Structures Pvt. Ltd. (I.A. No. 1142 of 2018 In Company Appeal (AT) (Insolvency) No. 264 of 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 –– Withdrawal can be permitted even after issue of invitation for expression of interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 Brilliant Alloys Private Limited v Mr. S. Rajagopal & Ors., Special Leave to Appeal (C) No(s). 31557/2018. . . . . . . . . . . . . . . . 225 Section 13 Declaration of moratorium and public announcement Section 14 Moratorium Clause (a) of Section 14(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 –– Arbitration Proceeding initiated after the moratorium is non-est in law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 Alchemist Asset Reconstruction Company Limited v Hotel Gaudavan Private Limited, AIR 2017 SC 5124, [2018] 145 SCL 428 (SC).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227

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–– Arbitration Proceedings cannot be initiated by erstwhile management during moratorium period. . . . . . . . . . . . . . . . . . . . . . 227 Re Rave Scans Pvt. Ltd., Principal Bench, IB 01(PB)/2017. . . . . . . . . . 228 –– Arbitration Proceedings against Corporate Debtor to remain suspended during moratorium . . . . . . . . . . . . . . . . . . . . . . . 228 State Bank of India v Monnet Ispat and Energy Limited, MA 5252/2017, CP No. 1139/I&B/2017 Mumbai Bench, NCLT. . . 228 –– Arbitration instituted after the moratorium is non est in law. . . . . 228 Alchemist Asset Reconstruction Company Ltd. v Hotel Gaudavan Pvt. Ltd., AIR2017SC5124, MANU/ SC/1690/2017, [2018]145SCL428(SC), 2018 (7) SCJ 110 . . . . . . . . 228 Followed in: K.S. Oils Ltd. v The State Trade Corporation of India Ltd. & Anr, MANU/ NL/0021/2018, [2018]146SCL588 . . . . . . . . . . . . . . . . . . . . . . . . . 229 –– No prohibition to filing or continuation of suit or proceeding by the corporate debtor. . . . . . . . . . . . . . . . . . . . . . . . . . 229 Burn Standard Co Ltd v United Bank of India, GA No. 2287 of 2017 dated 24 July 2017, Calcutta High Court.. . . . . . . . . . . 229 –– Application for restoring electricity dismissed. . . . . . . . . . . . . . . . . 229 Edelweiss Asset Reconstruction Company v Tecpro Systems Ltd, (IB) 197(PB)/2017, Principal Bench. . . . . . . . . . . . . . . 230 –– Court includes High Court and Supreme Court. . . . . . . . . . . . . . . . 230 Canara Bank v Deccan Chronicle Holdings Limited, CP No. IB/41/7/HDY/2017, Hyderabad Bench, NCLT. . . . . . . . . . . . . . 230 Canara Bank v Deccan Chronicle Holdings Limited, Company Appeal (AT) (Insolvency) No. 147 of 2017, NCLAT . . . . 230 –– Criminal Proceedings against the corporate debtor and directors can continue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 DK Kapur v Reserve Bank of India, 2001 IIAD Delhi 259, (2001) ILR 1 Delhi 35, [2001] 105 CompCas 643 (Delhi).. . . . . . . . 232 –– Amount lying attached under the orders of the Executing Court can be considered while preparing the Resolution Plan . . . 232 Re Recorders and Medicare Systems Pvt Ltd, CA No.120/2017, Chandigarh Bench, CP (IB) No.7/Chd/Hry/2017. . 232 –– No appropriation can be done towards outstanding dues by a Bank after declaration of Moratorium. . . . . . . . . . . . . . . . . . . . . . . 232 Indian Overseas Bank v Amtek Auto Limited (Represented by Resolution Professional), NCLAT, Company Appeal (AT) (Insolvency) No. 267 of 2017, dated 15 November 2017. . . . . 232 cxxii

Table of cases – section-wise, topic-wise

–– IBC has been enacted to set up Insolvency and Bankruptcy resolution process to be implemented in a time bound manner. . 233 Jotun India Private Limited and Ors. v PSL Limited, 2018(2)ABR350, 2018(1)BomCR524, (2018)2CompLJ222(Bom), [2018]142CLA290(Bom), MANU/MH/0005/2018, [2018]145SCL601(Bom) . . . . . . . . . . . . . . 233 –– Mining Lease cannot be cancelled during moratorium period. . . . 233 Naresh Kumar & Co. Pvt. Ltd. v Kalyanpur Cements Ltd., CP(IB) No. 168/KB/2017, Kolkata Bench NCLT . . . . . . . . . . . . . . . . 233 Sub-section (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 ICICI Bank Ltd v Innoventive Industries Limited, Mumbai, NCLT, MA 157 in CP 01/I&BP/2016, dated 23 August 2017. . . . . . 234 –– Wheeling of Power from one Unit to another is an essential service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 SBI v Monnet Ispat & Energy Ltd, MA No.47012017, Mumbai Bench, NCLT, CP No. ll39 I&BP/NCLT/MB/MAH/2017. 235 –– Application for restoring electricity dismissed. . . . . . . . . . . . . . . . . 236 BSR Diagnostics Ltd. v Chattisgarh State Power Distribution Company Ltd. (CSPDCL), MA 06/2018, NCLT, Mumbai Bench, CP 1283/I&BC/2017. . . . . . . . . . . . . . . . . . . 236 –– Moratorium is not applicable to Personal Guarantors. . . . . . . . . . . 236 State Bank of India v V. Ramakrishnan and Ors., AIR2018SC3876, 2018(6)ABR42, 2018(5)ALD162, III(2018)BC593(SC), [2018]210CompCas364(SC), (2018)4CompLJ48(SC), [2018]145CLA447(SC), 2018(4) MPLJ23, 2018(5)MhLJ692, MANU/SC/0849/2018, 2018(4)RCR(Civil)110, [2018]149SCL107(SC), 2018(9) SCALE597, 2018 (7) SCJ 632 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236 –– If any cost is incurred towards supply of the essential services during the period of ‘Moratorium’, it may be accounted towards ‘Insolvency Resolution Process Costs’ . . . . . . . 236 Dakshin Gujarat VIJ Company Ltd. v ABG Shipyard Ltd. and Ors., (I(2018)BC172, MANU/NL/0020/2018. . . . . . . . . . . . . . . 237 –– Amendment of 2018 in Section 14 is clarificatory and retrospective in nature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237 State Bank of India v V. Ramakrishnan and Ors., AIR 2018 SC 3876, 2018 (6) ABR 42, 2018 (5) ALD 162, III (2018) BC 593 (SC), [2018] 210 CompCas 364 (SC), (2018) 4 Comp LJ 48 (SC), [2018] 145 CLA 447 (SC), 2018 (4) cxxiii

Case Digest on Insolvency and Bankruptcy Code, 2016

MPLJ 23, 2018 (5) MhLJ 692, MANU/SC/0849/2018, 2018 (4) RCR (Civil) 110, [2018] 149 SCL 107 (SC), 2018 (9) SCALE 597, 2018 (7) SCJ 632. . . . . . . . . . . . . . . . . . . . . . . . 241 –– Where the land belongs to the ‘Maharashtra Housing and Area Development Authority’, and the same has not been formally transferred in favour of the ‘Corporate Debtor’, it cannot be treated to be the asset of the corporate debtor. . . . . . . . 242 Rajendra K. Bhuta, Resolution Professional (For Guruashish Construction Private Limited) v Maharashtra Housing and Area Development Authority (Company Appeal (AT) (Insolvency) No. 119 of 2018) . . . . . . . . . . 242 –– ‘Security Interest’ mentioned in Section 14(1)(c) do not include the ‘Performance Bank Guarantee’. . . . . . . . . . . . . . . . . . . . 242 GAIL (India) Limited v Rajeev Manaadiar & Ors., Company Appeal (AT) (Insolvency) No. 319 of 2018. . . . . . . . . . . . 243 –– Moratorium will not affect any suit pending before Supreme Court under Article 32 of the Constitution of India or the power of the High Court under Article 226 of the Constitution of India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 Canara Bank Vs. Deccan Chronicle Holdings Limited, II (2018) BC 70, [2017] 141 CLA 93, MANU/ NL/0104/2017, [2017] 144 SCL 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 –– Sections 96 and 101, when contrasted with Section 14, would show that Section 14 cannot possibly apply to a personal guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 State Bank of India Vs. V. Ramakrishnan and Ors., AIR 2018 SC 3876, 2018 (6) ABR 42, 2018 (5) ALD 162, III (2018) BC 593 (SC), [2018] 210 CompCas 364 (SC), (2018) 4 Comp LJ 48 (SC), [2018] 145 CLA 447 (SC), 2018 (4) MPLJ 23, 2018 (5) MhLJ 692, MANU/ SC/0849/2018, 2018 (4) RCR (Civil) 110, [2018] 149 SCL 107 (SC), 2018 (9) SCALE 597, 2018 (7) SCJ 632 . . . . . . . . . . . 244 –– Handing over any document will not amount to violation of ‘Moratorium’ order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244 V. Nagarajan Resolution Professional v Meenakshi Energy Ltd., MANU/NL/0069/2018, [2018]146SCL224. . . . . . . . . . . . . . . . 244 –– Owner cannot recover the property occupied by the tenant ‘Corporate Debtor’ during the period of moratorium . . . . . . . . . . . 244 Navbharat Castings LLP v Moser Baer India Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 323 of 2018. . . . . . . . . . . . 244 cxxiv

Table of cases – section-wise, topic-wise

–– Amount due to the person whose rights are prejudicially affected on account of the moratorium is to be included in the insolvency resolution process costs. . . . . . . . . . . . . . . . . . . . . . . 245 JAS Telecom Pvt. Ltd. v Eolane Electronics Bangalore Pvt. Ltd., [2018]144CLA89, MANU/NL/0098/2018. . . . . . . . . . . . . . . . . 246 –– The court of competent jurisdiction can proceed with the proceeding under Section 138 of the Negotiable Instruments Act, even during the period of moratorium . . . . . . . . 246 Shah Brothers Ispat Pvt. Ltd. v P. Mohanraj & Ors., Company Appeal (AT) (Insolvency) No. 306 of 2018. . . . . . . . . . . . 246 –– Amount deposited in the account of CoC cannot be appropriated by bank towards its own dues during the moratorium period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 State Bank of India v Debashish Nanda, Company Appeal (at) (Insolvency) No. 49 0f 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 Followed in: DCB Bank Ltd. v Prag Distillery Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 193 of 2018. . . . . . . . . . 247 ICICI Bank Ltd. v Interim Resolution Professional for Ruchi Soya Industries Ltd., Company Appeal (AT) (Insolvency) No. 390 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247 –– The personal and individual assets of a Director is not the subject matter of the ‘Corporate Insolvency Resolution Process’. . 247 Suresh Chand Garg v Aditya Birla Finance Ltd., Company Appeal (AT) (Insolvency) No. 130 of 2018. . . . . . . . . . . . . . . . . . . . . 247 –– A money suit or suit for recovery, if filed before any High Court under original jurisdiction against the ‘corporate debtor’, such suit cannot proceed after declaration of ‘moratorium, under Section 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247 Canara Bank v Deccan Chronicle Holdings Limited, Company Appeal (AT) (Insolvency) No. 147 of 2017. . . . . . . . . . . . 248 –– Corporate Debtor or Resolution Professional are not liable to pay the dues of period prior to passing of order of moratorium.248 Innoventive Industries Ltd. v Maharashtra State Electricity Distribution Company Ltd., Company Appeal (AT) (Insolvency) No. 156 of 2017 & I.A. No. 612 of 2017 . . . . . . . . . . . . 248

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Section 15 Public announcement of corporate insolvency resolution process Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 –– Timeline provided by the Code could not be eroded in such a manner as to cause delay in the Corporate Insolvency Resolution Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 Alchemist Asset Reconstruction Co. Ltd. v Moser Baer India Limited, CA No.7(PB) 2018, NCLT, Principal Bench. . . . . . . . 249 Section 16 Appointment and tenure of interim resolution professional Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 –– Payment of Fee of Interim Resolution Professional where the order of the Tribunal is set aside by the Appellate Tribunal . . 251 M/s Hyosan Automative India Pvt Ltd v Metecno (India) Pvt Ltd, NCLAT, Company Appeal (AT) (Insolvency) No. 152 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 Sub-section (5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 –– Previous Assignments of Interim Resolution Professional are a relevant factor while considering his appointment in another case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 Edelweiss Asset Reconstruction Co Ltd v Net 4 India Ltd CP No. (IB) 409(PB)/2017, NCLT Principal Bench . . . . . . . . . . . . . . 251 –– Interim Resolution Professional should not accept too many assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 IDBI Bank Limited v Lanco Infratech Limited, CP (IB) No. 111/7/HDB/2017, Hyderabad Bench NCLT . . . . . . . . . . . . . . . . . . . 251 –– Committee of Creditors should move application for change of Interim Resolution Professional . . . . . . . . . . . . . . . . . . . . 252 Macro Leafin Private Limited v Arrow Resources Limited, CA No. 259(PB) 2017, CP No. (IB)-152(PB) 2017, Principal Bench NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 –– Appointment of Interim Resolution Professional confirmed from a later date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 Innovative House Industries Pvt Ltd v Jap Infratech Pvt Ltd, CP No. lB No. (IB) 212(ND)/2017, NCLT, New Delhi Bench. . 252

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–– Whether period of Corporate Insolvency Resolution Process can be extended where there is delay in recommending the name of IRP by the Board . . . . . . . . . . . . . . . . . 252 S R Constructions v International Recreation & Amusement Ltd, (IB) 68(PB)/2017, NCLT, Principal Bench. . . . . . . 253 –– Erstwhile directors who are no longer in management cannot maintain an appeal on behalf of the company on appointment of an Insolvency Professional. . . . . . . . . . . . . . . . . . . . 253 Innoventive Industries Ltd. v ICICI Bank & Anr., AIR 2017 SC 4084, III (2017) BC 632 (SC), [2017] 205 CompCas 57 (SC), (2017) 4 CompLJ 193(SC), [2017] 140 CLA 39 (SC), 2017 (5) CTC 725, MANU/SC/1063/2017, [2017] 143 SCL 625 (SC), 2017(11)SCALE 4, (2018) 1 SCC 407, (2018) 1 WBLR (SC) 446. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 Followed in: Atul Sharma v Gudearth Homes Infracon Pvt. Ltd. & Anr., [2018]146SCL716, MANU/NL/0071/2018. . . . 253 Mack Soft Tech Pvt. Ltd. v Quinn Logistics India Ltd., Company Appeal (AT) (Insolvency) No. 143 of 2017. . . . . . . . . . 253 Logvis AG v Quinn Logistics India Ltd., Company Appeal (AT) (Insolvency) No. 175 of 2017. . . . . . . . . . . . . . . . . . . 253 Mecon FZE v Quinn Logistics India Ltd., Company Appeal (AT) (Insolvency) No. 176 of 2017. . . . . . . . . . . . . . . . . . . 254 Zapp India Ltd. v Maheshwar Textile, Company Appeal (AT) (Insolvency) No. 314 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . 254 Radius Infratel Pvt. Ltd. v Union Bank of India, Company Appeal (AT) (Insolvency) No. 535 of 2018. . . . . . . . . . 254 –– A majority vote of not less than 75% of voting share of the ‘Committee of Creditors’ is required to replace the ‘Interim Resolution Professional’ by another ‘Resolution Professional’. . . . 254 ICICI Bank Limited v Oceanic Tropical Fruits Private Limited & Ors., III(2018)BC109, MANU/NL/0135/2018. . . . . . . . . 255 Section 17 Management of affairs of corporate debtor by interim resolution professional –– Interim Resolution Professional is not vested with any specific power to sue any person on behalf of the ‘Corporate Debtor’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257 Steel Konnect (India) Private Limited v Hero Fincorp Limited, Company Appeal (AT) (Insolvency) No. 51 of 2017 . . . . . 257

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Section 18 Duties of interim resolution professional Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259 –– Claims cannot be filed beyond last date of submission of claim in corporate insolvency resolution process. . . . . . . . . . . . . . . 259 Alchemist Asset Reconstruction Co. Ltd. v Moser Baer India Limited, CA No.7(PB) 2018, NCLT Principal Bench. . . . . . . . 259 –– The Interim Resolution Professional can take control and custody of the property leased by the corporate debtor . . . . . . . . . 259 Re Ashok Magnetics Ltd, CP (IB) No. 551/(IB)/2017, Chennai Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260 –– The Resolution Professional/Liquidator has no jurisdiction to take over any asset of the subsidiary company. . . . . . . . . . . . . . . 260 Bhavik Bhimjyani v Uday Vinodchandra Shah, Resolution Professional of Neelkanth Township & Construction Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 182 of 2018. . . . 260 –– Recovery of Debts during Corporate Insolvency Resolution Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260 Jai Ambe Enterprise v SN Plumbing Pvt Ltd, CP No. 1268/ IBC/NCLT/MB/MAH/2017, Mumbai Bench, NCLT. . . . . . . . . . . . . 261 –– Appointment of Special Auditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261 Re VNR Infra Metal Pvt Ltd, CP(IB) No. 13/10/HDB/2017, Hyderabad Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261 –– Insolvency Resolution Professional cannot remove the tenant . . . 261 Devendra Padamchand Jain (Resolution Professional) v Sandhya Prakash & Ors., [2018]148SCL243, MANU/ NL/0152/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261 Section 19 Personnel to extend co-operation to interim resolution professional Sub-section (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262 –– Interim Resolution Professional is at liberty to make application for non-cooperation of personnel. . . . . . . . . . . . . . . . . . 262 Bank of India v Tirupati Infraprojects Pvt Ltd, C.P. No. IB 104(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . 262 –– Direction given to other entities to cooperate with Interim Resolution Professional to provide what all information of the Company lying with the respective authority . . . . . . . . . . . . . . 263

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Global Supply Marine Co v Swiber Offshore India Pvt Ltd, MA 437/2017 in CP 51/I&BP/NCLT/MB/MAH/2017, Mumbai Bench,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263 –– Direction to Corporate Debtor to cooperate with Interim Resolution Professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263 SBI (Stressed Assets Management Branch) v Shri Maharaja Oil Imports & Exports India Pvt Ltd & IOB, CA/26&27/ IB/2017 In CP/531/(IB)/CB/2017, Chennai Bench, NCLT . . . . . . . 263 –– Direction issued to Noida Authority to release relevant records. . 263 Bank of Baroda v Amrapali Silicon City Pvt Ltd, (IB) 121(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . 264 –– Directions to Corporate Debtor to cooperate with Resolution Professional for collection of information. . . . . . . . . . . 264 Subodh Bajrang Lal Kedia v Anil Nutrients Ltd, CP (I.B) No. 65/7/NCLT/AHM/2017, Ahmedabad Bench, NCLT. . . . . . . . . 264 –– Bailable Warrants issued by Tribunal for appearance of Respondents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264 Sunrise 14 A/S, Denmark v Muskaan Power Infrastructure Ltd, CA No.150/2017 IN CP (IB) No. 39/Chd/Pb/2017, NCLT, Chandigarh Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264 –– Application for declaring the lockout illegal. . . . . . . . . . . . . . . . . . . 265 Alchemist Asset Reconstruction Co. Ltd. v Moser Baer India Limited, CA No.24(PB) 2018, NCLT Principal Bench. . . . . . . 265 –– Directions given to Police to assist Resolution Professional for carrying out his duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 Punjab National Bank v Divyajyoti Sponge Iron Pvt. Ltd., CA (IB) No. 570/KB/2017, NCLT, Kolkata Bench . . . . . . . . . . . . . . . 266 Section 20 Management of operations of corporate debtor as going concern Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 –– Stoppage of operations while the moratorium is in force is illegal and inoperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 State Bank of India v Orissa Manganese & Minerals Ltd., CA(IB) No. 134/KB/2018, CP(IB) No. 371/KB2017, NCLT Kolkata Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267

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Section 21 Committee of creditors –– Any plan which has not been approved by the ‘Committee of Creditors’ with minimum voting share, cannot be approved by the Adjudicating Authority as it will violate the provisions of Section 30(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 Kamineni Steel & Power India Pvt. Ltd. v Indian Bank & Ors., Company Appeal (AT) (Insolvency) No. 45 of 2018, . . . . . . . 271 United Seamless Tabulaar Pvt. Ltd. v Kamineni Steel & Power India Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 23 of 2018, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 Indian Overseas Bank & Ors. v Kamineni Steel & Power India Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 335 of 2017, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 Chandu Laxman Chavan v Union of India & Ors., Company Appeal (AT) (Insolvency) No. 15 of 2018 . . . . . . . . . . . . 271 Section 22 Appointment of resolution professional Sub-Section (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273 –– Adjudicating Authority to forward name of Resolution Professional to IBBI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273 Invent Assets Securitisation & Reconstruction Pvt Ltd v SAL Steel Ltd, IA 364/2017, CP (IB) No. 94/9/NCLT/ AHM/2017, NCLT, Ahmedabad Bench. . . . . . . . . . . . . . . . . . . . . . . 273 Macro Leafin Pvt Ltd v Arrow Resources Ltd., (IB) 152 (PB)/2017, Principal Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273 –– Replacement of Interim Resolution Professional due to his health reasons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273 Lakshmi Apparels and Wovens Limited, CA/122/IB/2017, TCP/262/(IB)/2017, NCLT, Chennai Bench. . . . . . . . . . . . . . . . . . . . 273 –– A majority vote of not less than 75% of voting share of the ‘Committee of Creditors’ is required to replace the ‘Interim Resolution Professional’ by another ‘Resolution Professional’. . . . 274 ICICI Bank Limited v Oceanic Tropical Fruits Private Limited & Ors., III(2018)BC109, MANU/NL/0135/2018. . . . . . . . . 275 –– A Resolution Professional empanelled as an Advocate or Company Secretary or Chartered Accountant cannot be a ground to reject the proposal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275

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Table of cases – section-wise, topic-wise

State Bank of India v Ram Dev International Ltd., Company Appeal (AT) (Insolvency) No. 302 of 2018. . . . . . . . . . . . 275 –– It is always open to any ‘Financial Creditor’ to appoint ‘Insolvency Professional’ to verify all the action and to assist the ‘Committee of Creditors’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276 Sunil Kumar Agarwal v Allahabad Bank & Ors., Company Appeal (AT) (Insolvency) No. 388 of 2018. . . . . . . . . . . . . . . . . . . . . 276 Section 23 Resolution professional to conduct corporate insolvency resolution process –– If any amount is withdrawn by the Resolution Professional during the Corporate Insolvency Resolution Process, such amount can be debited to ensure that excess withdrawal is not made beyond the available balance. . . . . . . . . . . . . . . . . . . . . . . 277 ICICI Bank v Interim Resolution Professional for Ruchi Soya Industries Ltd., Company Appeal (AT) (Insolvency) No. 390 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 Sub-section (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 –– Notice by email to the financial creditors . . . . . . . . . . . . . . . . . . . . . 277 Subodha Entertainments Co Ltd v Jackonblock Facility Services Pvt Ltd, CP(IB)No. 6/BB/17, NCLT Bengaluru Bench. . . . 278 Section 24 Meeting of committee of creditors –– When the allotment of equity shares in favour of the financial creditor is not approved by the stock exchange, the financial creditor cannot be treated as a ‘related party’ in relation to the corporate debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 SREI Infrastructure Finance Ltd. v Canara Bank & Ors., [2018]145CLA315, MANU/NL/0163/2018. . . . . . . . . . . . . . . . . . . . 280 Section 25 Duties of resolution professional –– Insolvency Resolution Professional cannot remove the tenant . . . 282 Devendra Padamchand Jain (Resolution Professional) v Sandhya Prakash & Ors., [2018]148SCL243, MANU/ NL/0152/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282

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–– The authorised person who will sign the cheques will have to intimate the Resolution Professional or its authorised representative the purpose of issuance of cheques . . . . . . . . . . . . . 282 Subodh Kumar Agarwal v EIH Limited, Company Appeal (AT) (Insolvency) No. 483 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . 282 Section 25A Rights and duties of authorized representative of ﬁnancial creditors Section 26 Application for avoidance of transactions not to affect proceedings Section 27 Replacement of resolution professional by committee of creditors –– A majority vote of not less than 75% of voting share of the ‘Committee of Creditors’ is required to replace the ‘Interim Resolution Professional’ by another ‘Resolution Professional’. . . . 286 ICICI Bank Limited v Oceanic Tropical Fruits Private Limited & Ors., III(2018)BC109, MANU/NL/0135/2018. . . . . . . . . 286 –– The Adjudicating Authority is duty bound to consider the name of another ‘Resolution Professional’. . . . . . . . . . . . . . . . . . . . . 286 Rajinder Kapoor v Anil Kumar (Interim Resolution Professional), Company Appeal (AT) (Insolvency) No. 198 of 2017; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287 Ashwini Kumar Prabhakar v Anil Kumar, Interim Resolution Professional, Company Appeal (AT) (Insolvency) No. 200 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287 –– Pending fee of Resolution Professional to be paid. . . . . . . . . . . . . . 287 Dunn Foods Pvt Ltd, CA No.141/2017, CP (IB) No. 16/ Chd/Pb/2017, Chandigarh Bench dated 26 September, 2017. . . . . 287 Section 28 Approval of committee of creditors for certain actions Section 29 Preparation of information memorandum Section 29A Persons not eligible to be resolution applicant –– The expression “acting jointly” in Section 29A cannot be confused with “joint venture agreements”. . . . . . . . . . . . . . . . . . . . . 294

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ArcelorMittal India Private Limited v Satish Kumar Gupta and Ors., AIR 2018 SC 5646, [2018] 146 CLA 293 (SC), MANU/SC/1123/2018, 2018 (13) SCALE 381. . . . . . . . . . . . . . . . . . 294 –– Stage of ineligibility attaches when the resolution plan is submitted by a resolution applicant. . . . . . . . . . . . . . . . . . . . . . . . . . 294 ArcelorMittal India Private Limited v Satish Kumar Gupta and Ors., AIR 2018 SC 5646, [2018] 146 CLA 293 (SC), MANU/SC/1123/2018, 2018 (13) SCALE 381. . . . . . . . . . . . . . . . . . 295 –– Section 29A is intended to ensure that persons responsible for insolvency of the corporate debtor do not participate in the resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295 Chitra Sharma and Ors. v Union of India and Ors., 2018 5 AWC 4829 SC, III (2018) BC 478 (SC), 2018 (5) Bom CR 712, [2018] 210 CompCas 609 (SC), (2018) 3 CompLJ 575 (SC), (2018) 3 CompLJ 575 (SC), MANU/ SC/0834/2018, 2018 (4) RCR (Civil) 45, [2018] 148 SCL 833 (SC), 2018 (9) SCALE 490. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295 –– The expression “control”, in Section 29A(c), denotes only positive control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295 ArcelorMittal India Private Limited v Satish Kumar Gupta and Ors., AIR 2018 SC 5646, [2018] 146 CLA 293 (SC), MANU/SC/1123/2018, 2018 (13) SCALE 381. . . . . . . . . . . . . . . . . . 296 –– Ineligibility can only be removed if the necessary payment is made before submission of a resolution plan. . . . . . . . . . . . . . . . 296 Arcelor Mittal India Private Limited v Satish Kumar Gupta and Ors., AIR 2018 SC 5646, [2018] 146 CLA 293 (SC), MANU/SC/1123/2018, 2018 (13) SCALE 381. . . . . . . . . . . . . . . . . . 297 –– The provision in Section 29A(d) which stipulates “has been convicted for any offence punishable with imprisonment for two years or more”, cannot be equated with Section 33(1)(a) of the ‘U.K.Act’. . . . . . . . . . . . . . . . . . . . . . . . . 297 Renaissance Steel India Pvt. Ltd. v Electrosteel Steels Ltd., Company Appeal (AT) (Insolvency) No. 175 of 2018; . . . . . . . . . . 298 Renaissance Steel India Pvt. Ltd. v Electrosteel Steels Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 223 of 2018, . . . . 298 Neeraj Singal v Bhushan Steel Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 221 of 2018, . . . . . . . . . . . . . . . . . . . 298 Larsen & Toubro Ltd. v Bhushan Steel Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 233 of 2018, . . . . . . . . . . 298

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Bhushan Energy Ltd. v State Bank of India & Ors., Company Appeal (AT) (Insolvency) No. 267 of 2018, . . . . . . . . . . 298 Brij Bhushan Singal v Bhushan Steel Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 357 of 2018 . . . . . . . . . . . 298 –– The IBBI have no locus standi to challenge the finding of the Adjudicating Authority, however, liberty can be given to the IBBI to inform the Resolution Professional to move appeal under Section 61 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . 298 Insolvency and Bankruptcy Board of India v Wig Associates Pvt. Ltd. & Ors., IV(2018)BC127, [2018]210CompCas103, [2018]145CLA532, MANU/ NL/0180/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299 –– Section 29A(d) can never be applied to ‘juristic person’ because a ‘juristic person’ can never be imprisoned. . . . . . . . . . . . 299 Renaissance Steel India Pvt. Ltd. v Electrosteel Steels Ltd., Company Appeal (AT) (Insolvency) No. 175 of 2018; . . . . . . . . . . 300 Renaissance Steel India Pvt. Ltd. v Electrosteel Steels Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 223 of 2018; . . . 300 Neeraj Singal v Bhushan Steel Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 221 of 2018; . . . . . . . . . . . . . . . . . . . 300 Larsen & Toubro Ltd. v Bhushan Steel Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 233 of 2018; . . . . . . . . . . 300 Bhushan Energy Ltd. v State Bank of India & Ors., Company Appeal (AT) (Insolvency) No. 267 of 2018; . . . . . . . . . . 300 Brij Bhushan Singal v Bhushan Steel Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 357 of 2018 . . . . . . . . . . . 300 –– The word ‘punishable’ used in Section 29A(d) is a link between the offence and the penalty prescribed by law depending on the gravity of the offence. . . . . . . . . . . . . . . . . . . . . . . 300 Renaissance Steel India Pvt. Ltd. v Electrosteel Steels Ltd., Company Appeal (AT) (Insolvency) No. 175 of 2018; . . . . . . . . . . 301 Renaissance Steel India Pvt. Ltd. v Electrosteel Steels Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 223 of 2018; . . . 301 Neeraj Singal v Bhushan Steel Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 221 of 2018; . . . . . . . . . . . . . . . . . . . 301 Larsen & Toubro Ltd. v Bhushan Steel Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 233 of 2018; . . . . . . . . . . 301 Bhushan Energy Ltd. v State Bank of India & Ors., Company Appeal (AT) (Insolvency) No. 267 of 2018; . . . . . . . . . . 301

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Brij Bhushan Singal v Bhushan Steel Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 357 of 2018 . . . . . . . . . . . 301 –– Merely retention of two of the Directors of the Corporate Debtor does not violate any of the provision of Section 29A of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 Tommorrows Sales Agency Pvt. Ltd. v Rajiv Khurana, R.P. for Power Himalayas Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 162 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . 302 –– ‘Appellant’ cannot be made eligible to file resolution plan after order of liquidation on the ground of amended Section 29A.302 Power Mech Projects Ltd. v Savan Godiawala, R.P./ Liquidator for Lanco Infratech Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 620 of 2018. . . . . . . . . . . . . . . . . . . . . 302 –– Rejection or approval of a resolution plan is the right of the committee of creditors and Resolution Professional cannot reject any plan without a decision of committee of creditors. . . . . 302 Rural Electrification Corporation Ltd. v Ferro Alloys Corporation Ltd., CP(IB) No. 251/KB/2017, NCLT Kolkata Bench.303 Section 30 Submission of resolution plan –– The Adjudicating Authority has jurisdiction to remove the Resolution Professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305 Devendra Padamchand Jain v State Bank of India & Ors., II(2018)BC164, MANU/NL/0011/2018 . . . . . . . . . . . . . . . . . . . . . . . 307 –– The Adjudicating Authority can order for initiation of Liquidation Process once the ‘Resolution Plan’ is rejected by the Committee of Creditors in view of Section 30 & 31. . . . . . . 307 Ashish Mohan Gupta v Hind Motors Ltd., Company (AT) (Insolvency) Nos. 239, 240 and 241 of 2017, III(2018) BC47, [2018]145CLA235, MANU/NL/0140/2018, [2018] 148 SCL 37. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307 –– The Resolution Professional cannot issue another revised Information Memorandum till the ‘Committee of Creditors’ allows the ‘Resolution Professional’ to prepare a revised Information Memorandum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307 Shri Ram Residency Private Limited v Kuldeep Verma, designated as Resolution Professional, Jalan

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Intercontinental Private Limited & Ors., Company Appeal (AT) (Insolvency) No. 202 of 2018. . . . . . . . . . . . . . . . . . . . . 307 –– Any plan which has not been approved by the ‘Committee of Creditors’ with minimum voting share, cannot be approved by the Adjudicating Authority as it will violate the provisions of Section 30(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 Kamineni Steel & Power India Pvt. Ltd. v Indian Bank & Ors., Company Appeal (AT) (Insolvency) No. 45 of 2018; . . . . . . . 308 United Seamless Tabulaar Pvt. Ltd. v Kamineni Steel & Power India Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 23 of 2018; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 Indian Overseas Bank & Ors. v Kamineni Steel & Power India Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 335 of 2017; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 Chandu Laxman Chavan v Union of India & Ors., Company Appeal (AT) (Insolvency) No. 15 of 2018 . . . . . . . . . . . . 308 –– The Adjudicating Authority can order for liquidation of the ‘Corporate Debtor’ in the absence of any viable resolution plan. . 308 S. Ravi. Srinivas v Super Agri Seeds Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 124 of 2018. . . . . . . . . . . . 308 –– The Adjudicating Authority or the Appellate Tribunal cannot sit in appeal over the decision of the ‘Committee of Creditors’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 Bhaskara Agro Agencies v Super Agri Seeds Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 380 of 2018. . . . . . . . . . . . 309 –– Discrimination cannot be made between the ‘Financial Creditors’ on the ground that one has dissented in Resolution Plan and the other has supported. . . . . . . . . . . . . . . . . . 309 Central Bank of India v Resolution Professional of the Sirpur Paper Mills Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 526 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310 –– There is no requirement to issue notice to the ‘Operational Creditor(s)’ or any other ‘creditors’ for approving a ‘Resolution Plan’ which is already approved by the ‘Committee of Creditors’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310 Madhya Gujrat Vij Company Ltd. v Kalptaru Alloys Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 211 of 2018. 310 –– The amended Section 30(4) coming into force from 06-062018 is applicable to all ‘Resolution Plans’ which were

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not approved by the ‘Committee’ of Creditors’ or by the Adjudicating Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310 SICOM Limited v Alok Employees Benefits and Welfare Trust & Ors., Company Appeal (AT) (Insolvency) No. 344 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311 –– Merger and amalgamation can be proposed in the Resolution Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311 Edelweiss Asset Reconstruction Company Ltd. v Synergies Dooray Automotive Ltd. & Ors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311 Section 31 Approval of resolution plan –– To decide an application beyond the period of 270 days, the time taken in legal proceedings to decide the matter cannot possibly be excluded. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312 ArcelorMittal India Private Limited v Satish Kumar Gupta and Ors., AIR 2018 SC 5646, [2018] 146 CLA 293 (SC), MANU/SC/1123/2018, 2018 (13) SCALE 381. . . . . . . . . . . . . . . . . . 313 –– Guarantor cannot escape payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 313 State Bank of India v V. Ramakrishnan and Ors., AIR 2018 SC 3876, 2018 (6) ABR 42, 2018 (5) ALD 162, III (2018) BC 593 (SC), [2018] 210 CompCas 364 (SC), (2018) 4 Comp LJ 48 (SC), [2018] 145 CLA 447 (SC), 2018 (4) MPLJ 23, 2018 (5) MhLJ 692, MANU/SC/0849/2018, 2018 (4) RCR (Civil) 110, [2018] 149 SCL 107 (SC), 2018 (9) SCALE 597, 2018 (7) SCJ 632. . . . . . . . . . . . . . . . . . . . . . . . 314 –– Sanctioned rehabilitation schemes have been treated as schemes deemed to have been sanctioned under Section 31(1) of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 Ashapura Minechem Ltd. v Union of India and Ors., [2017] 205 CompCas 612 (Delhi), [2018] 142 CLA 463 (Delhi), 244 (2017) DLT 716, MANU/DE/3736/2017. . . . . . . . . . . . 314 –– Proceedings pending before the Debt Recovery Tribunal cannot go on when the liability has not been crystallized. . . . . . . . 314 Sanjeev Shriya and Ors. v State Bank of India and Ors., 2017(9)ADJ723: 2018(2) ALJ 769, 2017 (125) ALR 430, 2017 5 AWC4788All, III(2018)BC352(All.), [2017]141CLA305(All): MANU/UP/2243/2017, [2017]144SCL545(All) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315

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–– Resolution applicant can withdraw the resolution plan modified by the Adjudicating Authority in case of dissatisfaction.315 Tarini Steel Company Pvt. Ltd. v Trinity Auto Components Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 75 of 2018, MANU/NL/0040/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 –– The Adjudicating Authority can order for initiation of Liquidation Process once the ‘Resolution Plan’ is rejected by the Committee of Creditors in view of Section 30 & 31. . . . . . . 315 Ashish Mohan Gupta v Hind Motors Ltd., Company (AT) (Insolvency) Nos. 239, 240 and 241 of 2017, III(2018) BC47, [2018]145CLA235, MANU/NL/0140/2018, [2018] 148 SCL 37. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 –– The Corporate Debtor, their officers cannot be held responsible in the absence of any evidence after the approval of the resolution plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 Indian Bank & Ors. v Kadevi Industries Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 128 of 2018; . . . . . . . . . . 316 Raghu Babu Gunturu v Kadevi Industries Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 129 of 2018; . . . . . . . . . . 316 Kadevi Industries Ltd. v Indian Bank & Ors., Company Appeal (AT) (Insolvency) No. 135 of 2018 . . . . . . . . . . . . . . . . . . . . 316 –– The Board of Directors cannot decide the viability and feasibility of a ‘Resolution Plan’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 Vijay Kumar Jain v Standard Chartered Bank Ltd., [2018]146CLA211, MANU/NL/0199/2018. . . . . . . . . . . . . . . . . . . . 316 –– If the scheme sanctioned under Section 18(4) of SICA Act, 1985 is treated to be a scheme sanctioned under Section 31(1) of the Code, no relief can be granted to the appellant in absence of any provision of review of the scheme sanctioned under Section 31(1) of the Code. . . . . . . . . . . . 317 Hada Textile Industries Limited v Sales Tax Officer & Ors., Company Appeal (AT) (Insolvency) No. 325 of 2017. . . . . . . . . . . . 317 –– The Adjudicating Authority cannot modify the resolution plan in the absence of any discrimination or perverse decision. . . 317 Darshak Enterprise Pvt. Ltd. v Chhaparia Industries Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 327 of 2017; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 Symphony Ltd. v Chhaparia Industries Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 328 of 2017 . . . . . . . . . . . 317

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–– The provisions of ‘Gujarat Electricity Regulatory Commission (Electricity Supply Code and related matters) Regulations, 2015’ cannot override the provision of Section 31 of the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 Madhya Gujrat Vij Company Ltd. v Kalptaru Alloys Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 211 of 2018. 318 –– There is no requirement to issue notice to the ‘Operational Creditor(s)’ or any other ‘creditors’ for approving a ‘Resolution Plan’ which is already approved by the ‘Committee of Creditors’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 Madhya Gujrat Vij Company Ltd. v Kalptaru Alloys Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 211 of 2018. 318 Sub-Section (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 –– No interference of Tribunal called for in decision of committee of creditors to reject the plan. . . . . . . . . . . . . . . . . . . . . . 319 Vivek Vijay Gupta v Steel Konnect (India) Pvt. Ltd. & Ors., IA 9/2018, C.P. (I.B) No. 5/7/NCLT/AHM/2017, NCLT, Ahmedabad Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 Section 32 Appeal CHAPTER III LIQUIDATION PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320 Section 33 Initiation of liquidation –– Proceedings pending before the Debt Recovery Tribunal cannot go on when the liability has not been crystallized. . . . . . . . 321 Sanjeev Shriya and Ors. v State Bank of India and Ors., 2017(9)ADJ723: 2018(2) ALJ 769, 2017 (125) ALR 430, 2017 5 AWC4788All, III(2018)BC352(All.), [2017]141CLA305(All): MANU/UP/2243/2017, [2017]144SCL545(All) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 Sub-Section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 –– Liquidation is a natural consequence upon expiry of time for corporate insolvency resolution process . . . . . . . . . . . . . . . . . . . 322 Diamond Polymers Pvt Ltd v Pushkar Impex Pvt Ltd, CP (IB) No 286/KB/2017, NCLT, Kolkata Bench. . . . . . . . . . . . . . . . . . . 322 –– Adjudicating Authority is not expected to substitute its view with commercial wisdom of professional experts i.e. cxxxix

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Resolution Professional and Committee of Creditors nor it should deal with technical complexity and merits of Resolution Plan or otherwise unless it found contrary to express provision of law and goes against the public interest . . . . 322 Re JODPL Pvt Ltd, CP No 25/ALD/2017, NCLT, Allahabad Bench . . 322 –– Request of Resolution Professional not willing to act as Liquidator of the Corporate Debtor was not acceded to by the Tribunal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323 Ultra Drytech Engineering Ltd, MA 677A/2O17, CP NO 29/I&AP/NCLT/MAH | 2O17, NCLT, Mumbai Bench . . . . . . . . . . 323 –– Decision of Committee of Creditors to liquidate the corporate debtor earlier than expiry of statutory time limit upheld. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323 CA Rajendra K Bhuta (Resolution Professional) Applicant in the matter of Best Deal TV Pvt Ltd, NCLT, Mumbai Bench, MA 551/2017, CP No 852/I&BP/2017, 2 February 2018. . . 324 Sub-Section (2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324 –– Corporate Debtor directed to be liquidated on the decision of the committee of creditors to liquidate. . . . . . . . . . . . . . . . . . . . . 324 Om Shivay Real Estate Pvt Ltd v Advantage Projects & Consultants, CP No IB 112/(PB)/2017, NCLT, Principal Bench . . . 324 Anshuman Chaturvedi, RP v IDBI Bank Ltd, IA 45 of 2018, CP (IB) No 19/7/NCLT/AHM/2017, NCLT, Ahmedabad Bench. . . 325 Ramchandra D Chaudhary RP v Radheshyam Fibres Pvt Ltd, NCLT, Ahmedabad Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325 Ramubhai S Patel RP v Rajkot Nagrik Sahakari Bank Ltd, IA 376/2017, CP(IB) No 23/10/NCLT/AHM/2017, Ahmedabad Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 Re Roofit Industries Ltd, MA 70, CP 1055/I&BP/2017, NCLT, Mumbai Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 Sub-section (5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 –– Arbitration Proceeding initiated after the liquidation order would be non-est in law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 Alchemist Asset Reconstruction Company Ltd v Hotel Gaudvan Pvt Ltd, Civil Appeal No 16929/2017, SC. . . . . . . . . . . . . 327 –– Court includes High Court and Supreme Court. . . . . . . . . . . . . . . . 327 Canara Bank v Deccan Chronicle Holdings Ltd, [2017] 141 CLA 93, [2017] 144 SCL 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327

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–– Fresh moratorium starts on liquidation order. . . . . . . . . . . . . . . . . . 328 Re Nicco Corporation Ltd, CP No 03/KB/2017, NCLT, Kolkata Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328 Section 34 Appointment of liquidator and fee to be paid –– The Adjudicating Authority has jurisdiction to remove the Resolution Professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 Devendra Padamchand Jain v State Bank of India & Ors., II(2018)BC164, MANU/NL/0011/2018 . . . . . . . . . . . . . . . . . . . . . . . 331 –– The Adjudicating Authority can engage another Resolution Professional or Liquidator if it is dissatisfied with the performance of the Resolution Professional. . . . . . . . . . . . . . . . . . . 331 Sandeep Kumar Gupta, Resolution Professional v Stewarts & Lloyds of India Ltd. & Anr., [2018]144CLA161, [2018]146SCL591, MANU/NL/0026/2018. . . . . . . . . . . . . . . . . . . . 332 Sub-section (4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 –– Adverse Remarks against the Resolution professional were expunged but the decision of the Tribunal to appoint another Insolvency Professional in place of Resolution Professional was upheld. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 Sandeep Kumar Gupta Resolution Professional v Stewarts & Lloyds of India Ltd, Company Appeal (AT) (Insolvency) No. 263 of 2017, Company Appeal (AT) (Insolvency) No. 303 of 2017, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . 333 Section 35 Powers and duties of liquidator Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335 –– Application to the Tribunal for inclusion of workmen representatives in the Monitoring Committee. . . . . . . . . . . . . . . . . 335 Re Nicco Corporation Ltd, CA(IB) No 29/KB/2018, CP (IB) No 03/KB/2017, NCLT, Kolkata Bench. . . . . . . . . . . . . . . . . . . . . . . . 336 –– Liquidator cannot interfere with Security Interest of Secured Creditor upon Liquidation order once the Secured Creditors makes a choice to sell the security Interest on its own. . 336 Anil Goel v M/s REI Agro Ltd, CA (IB) No 540/KB/2017, CP (IB) No 73/KB/2017, NCLT, Kolkata Bench. . . . . . . . . . . . . . . . . 337

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–– Liquidator to seek clarification by way of filing a company application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337 Re VNR Infrastructures Ltd, CP No 12/10/HDB/2017, NCLT, Hyderabad Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337 Section 36 Liquidation estate –– Income Tax Department cannot claim any priority merely because of the fact that the order of attachment issued by it was long prior to the initiation of liquidation proceedings under the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339 Leo Edibles and Fats Limited v Tax Recovery Officer (Central), Income Tax Department and Ors., [2018] 407 ITR 369 (AP), MANU/AP/0426/2018. . . . . . . . . . . . . . . . . . . . . . . . . 339 Section 37 Powers of liquidator to access information Section 38 Consolidation of claims Section 39 Verification of claims Section 40 Admission or rejection of claims Section 41 Determination of valuation of claims Section 42 Appeal against the decision of liquidator –– The adjudicating authority can condone the delay and direct the liquidator to reconsider the claim on its merits . . . . . . . 342 UCO Bank in the matter of Nicco Corporation Ltd, CA (IB) No 31/KB/2018, CP (IB) No. 03/KB/2017, NCLT, Kolkata Bench. . 343 Section 43 Preferential transactions and relevant time Section 44 Orders in case of preferential transactions

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Section 45 Avoidance of undervalued transactions Section 46 Relevant period for avoidable transactions Section 47 Application by creditor in cases of undervalued transactions Section 48 Order in cases of undervalued transactions Section 49 Transactions defrauding creditors Section 50 Extortionate credit transactions Section 51 Orders of Adjudicating Authority in respect of extortionate credit transactions Section 52 Secured creditor in liquidation proceedings –– Income-tax Department does not enjoy the status of a secured creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352 Leo Edibles and Fats Limited v Tax Recovery Officer (Central), Income Tax Department and Ors., 2018 (4) ALT 700, MANU/NULL/0023/2018. . . . . . . . . . . . . . . . . . . . . . . . . . 352 Section 53 Distribution of assets –– Tax dues comes within the sphere of Section 53(1)(e) . . . . . . . . . . 354 Leo Edibles and Fats Limited v Tax Recovery Officer (Central), Income Tax Department and Ors., [2018] 407 ITR 369 (AP), MANU/AP/0426/2018. . . . . . . . . . . . . . . . . . . . . . . . . 354 –– Income-tax Department cannot claim a priority in respect of clearance of tax dues in the event an assessee company is in liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354 Leo Edibles and Fats Limited v Tax Recovery Officer (Central), Income Tax Department and Ors., [2018] 407 ITR 369 (AP), MANU/AP/0426/2018. . . . . . . . . . . . . . . . . . . . . . . . . 355

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–– Amount due to the person whose rights are prejudicially affected on account of the moratorium is to be included in the insolvency resolution process costs. . . . . . . . . . . . . . . . . . . . . . . 355 JAS Telecom Pvt. Ltd. v Eolane Electronics Bangalore Pvt. Ltd.,[2018]144CLA89, MANU/NL/0098/2018 . . . . . . . . . . . . . . . . . 356 –– Any decision of the Adjudicating Authority relating to the ‘Gratutity Trust Fund’ should be treated as an observation not binding on any Court of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356 Somesh Bagchi & Ors. v Nicco Corporation Ltd. through Liquidator, Company Appeal (AT) (Insolvency) No. 209 of 2018. . 356 Section 54 Dissolution of corporate debtor CHAPTER IV FAST TRACK CORPORATE INSOLVENCY RESOLUTION PROCESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358 Section 55 Fast track corporation insolvency resolution process Section 56 Time period for completion of fast track corporate insolvency resolution process Section 57 Manner of initiating fast track corporate insolvency resolution process Section 58 Applicability of Chapter II to this Chapter CHAPTER V VOLUNTARY LIQUIDATION OF CORPORATE PERSONS. . . . . . . 361 Section 59 Voluntary liquidation of corporate persons CHAPTER VI ADJUDICATING AUTHORITY FOR CORPORATE PERSONS. . . . 364 Section 60 Adjudicating Authority for corporate persons –– The High Court cannot grant injunction against a corporate debtor from institution of proceedings in NCLT . . . . . . . . . . . . . . . 365 Jotun India Private Limited and Ors. v PSL Limited, 2018 (2) ABR 350, 2018 (1) Bom CR 524, (2018) 2 CompLJ

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222 (Bom), [2018] 142 CLA 290 (Bom), MANU/ MH/0005/2018, [2018] 145 SCL 601 (Bom) . . . . . . . . . . . . . . . . . . . 365 –– Section 2(e) would apply only for limited purpose contained in Section 60(2) and (3). . . . . . . . . . . . . . . . . . . . . . . . . . . 365 State Bank of India v V. Ramakrishnan and Ors., AIR 2018 SC 3876, 2018 (6) ABR 42, 2018 (5) ALD 162, III (2018) BC 593 (SC), [2018] 210 CompCas 364 (SC), (2018) 4 Comp LJ 48 (SC), [2018] 145 CLA 447 (SC), 2018 (4) MPLJ 23, 2018 (5) MhLJ 692, MANU/SC/0849/2018, 2018 (4) RCR (Civil) 110, [2018] 149 SCL 107 (SC), 2018 (9) SCALE 597, 2018 (7) SCJ 632. . . . . . . . . . . . . . . . . . . . . . . . 366 –– Individual personal guarantors will continue to be proceeded against under the Insolvency Acts and not under the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366 State Bank of India v V. Ramakrishnan and Ors., AIR 2018 SC 3876, 2018 (6) ABR 42, 2018 (5) ALD 162, III (2018) BC 593 (SC), [2018] 210 CompCas 364 (SC), (2018) 4 Comp LJ 48 (SC), [2018] 145 CLA 447 (SC), 2018 (4) MPLJ 23, 2018 (5) MhLJ 692, MANU/SC/0849/2018, 2018 (4) RCR (Civil) 110, [2018] 149 SCL 107 (SC), 2018 (9) SCALE 597, 2018 (7) SCJ 632. . . . . . . . . . . . . . . . . . . . . . . . 367 –– It cannot be heard to say that the NCLT lacks jurisdiction to entertain or dispose of the issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367 SEL Manufacturing Company Ltd. and Ors. v Union of India and Ors., MANU/PH/0442/2018, [2018] 147 SCL 426 (Punj&Har)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368 –– It is not in the domain of the Adjudicating Authority to decide the requirement of minimum tangible net worth of one or other category of eligible Resolution Applicant. . . . . . . . . . 369 Kannan Tiruvengandam v M. K. Shah Exports Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 203 of 2018. . . . . . . . . . . . 369 –– The Adjudicating Authority is not the competent authority to pass any order for eviction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 Raj Builders v Raj Oil Mills Limited & Anr., Company Appeal (AT) (Insolvency) No. 304 of 2018. . . . . . . . . . . . . . . . . . . . . 370 –– Including the property of the personal guarantor for liquidation is illegal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 Ashutosh Singhania v Liquidator, Vindhiya Vasini Industries Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 439 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 cxlv

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Section 61 Appeals and Appellate Authority –– It cannot be heard to say that the NCLT lacks jurisdiction to entertain or dispose of the issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371 SEL Manufacturing Company Ltd. and Ors. v Union of India and Ors., MANU/PH/0442/2018, [2018] 147 SCL 426 (Punj&Har). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 –– Application for condonation of delay cannot be entertained if the ground taken in it is not satisfactory. . . . . . . . . . . . . . . . . . . . . 373 Prowess International Private Limited v Action Ispat & Power Private Limited, Company Appeal (AT) (Insolvency) No. 223 of 2017, MANU/NL/0058/2018. . . . . . . . . . . 375 –– The Central Government cannot grant ninety days’ period to prefer an appeal under Section 61(1) which is contrary to Section 61(2) of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 Pr. Director General of Income Tax (Admn. & TPS) v Spartek Ceramics India Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 160 of 2017, . . . . . . . . . . . . . . . . . . . . . . . . . . 376 GMB Ceramics Ltd. v Spartek Ceramics India Ltd. & Ors., Company (AT) (Insolvency) No. 258 of 2017 . . . . . . . . . . . . . . . . . . 376 Followed in: National Engineering Industries Ltd. v Cimmco Birla Ltd, Company Appeal (AT) (Insolvency) No. 151 of 2018; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376 Pr. Commissioner of Income-tax-7 v Modern Terry Towels Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 192 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376 –– Any decision of the Adjudicating Authority relating to the ‘Gratutity Trust Fund’ should be treated as an observation not binding on any Court of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376 Somesh Bagchi & Ors. v Nicco Corporation Ltd., through Liquidator, Company Appeal (AT) (Insolvency) No. 209 of 2018. . 377 –– The IBBI have no locus standi to challenge the finding of the Adjudicating Authority, however, liberty can be given to the IBBI to inform the Resolution Professional to move appeal under Section 61 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . 377 Insolvency and Bankruptcy Board of India v Wig Associates Pvt. Ltd. & Ors., IV(2018)BC127,

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[2018]210CompCas103, [2018]145CLA532, MANU/ NL/0180/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378 –– The NCLAT cannot decide whether a landlord has right to pursue for recovery of arrears of rent after the period of moratorium ends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378 Navbharat Castings LLP v Moser Baer India Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 323 of 2018. . . . . . . . . . . . 378 Section 62 Appeal to Supreme Court Section 63 Civil court not to have jurisdiction –– The Company Court does not have the jurisdiction to restrain NCLT from proceeding with IBC Application. . . . . . . . . . . 379 Jotun India Private Limited and Ors. v PSL Limited, 2018 (2) ABR 350, 2018 (1) Bom CR 524, (2018) 2 CompLJ 222 (Bom), [2018] 142 CLA 290 (Bom), MANU/ MH/0005/2018, [2018] 145 SCL 601 (Bom) . . . . . . . . . . . . . . . . . . . 380 Section 64 Expeditious disposal of applications –– The Company Court does not have the jurisdiction to restrain NCLT, Ahmedabad, from proceeding with IBC Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 Jotun India Private Limited and Ors. v PSL Limited, 2018 (2) ABR 350, 2018 (1) Bom CR 524, (2018) 2 CompLJ 222 (Bom), [2018] 142 CLA 290 (Bom), MANU/ MH/0005/2018, [2018] 145 SCL 601 (Bom) . . . . . . . . . . . . . . . . . . . 381 –– Company Court has no power to injunct proceedings initiated before the NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 Jotun India Private Limited and Ors. v PSL Limited, 2018 (2) ABR 350, 2018 (1) Bom CR 524, (2018) 2 CompLJ 222 (Bom), [2018] 142 CLA 290 (Bom), MANU/ MH/0005/2018, [2018] 145 SCL 601 (Bom) . . . . . . . . . . . . . . . . . . . 381 Sub-section (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 –– Time limits prescribed under the Code for the Tribunal or Appellate Tribunal are directory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 JK Jute Mills Company Limited v Surendra Trading Company, [2017] 204 CompCas 483: [2017] 138 CLA 258 (NCLAT), [2017] 142 SCL 188 . . . . . . . . . . . . . . . . . . . . . . . . . . . 383 cxlvii

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Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Limited, CA No 8400 of 2017, CA Nos. 1509115091 of 2017,, Supreme Court of India. . . . . . . . . . . . . . . . . . . . . . . 384 Section 65 Fraudulent or malicious initiation of proceedings –– In order to impose penalty under Section 65, the Adjudicating Authority has to form prima facie opinion that the person has filed the petition for initiation of proceeding “fraudulently” or with “malicious intent”. . . . . . . . . . . 385 Unigreen Global Private Limited v Punjab National Bank & Ors., II(2018)BC132, [2018]142CLA131, MANU/ NL/0192/2017, [2018]145SCL272. . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 Followed in: Neeta Chemicals (I) Pvt. Ltd. v State Bank of India, III(2018)BC120, MANU/NL/0051/2018dated 22-03-2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 –– ‘Power of Attorney Holder’ is not competent to file an application on behalf of a ‘Financial Creditor’ or ‘Operational Creditor’ or ‘Corporate Applicant’. . . . . . . . . . . . . . . . 385 Palogix Infrastructure Private Limited v ICICI Bank Limited, (2018)3CompLJ97, II(2018)BC32, [2017]141CLA83, MANU/NL/0095/2017, [2017]144SCL319. . . . . 387 Followed in: Mahesh Kumar Sureka v SBER Bank & Ors., [2018]208CompCas21, (2018)3CompLJ205, [2018]144CLA339, MANU/NL/0063/2018. . . . . . . . . . . . . . . . . . 387 Rajnish Gupta v Small Industrial Development Bank of India, Company Appeal (AT) (Insolvency) No. 126 of 2018 . . . . 387 –– ‘Collusiveness’ can be proved to suggest that the insolvency resolution process was initiated with malicious intent. . . . . . . . . . 387 Nityank Infrapower & Multiventures Pvt. Ltd. v Invex Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 499 of 2018. 387 Section 66 Fraudulent trading or wrongful trading –– The Adjudicating Authority can direct the ex-Directors not to leave the country without prior permission of the Adjudicating Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389 Amandeep Singh Bhatia & Ors. v Vitol S.A. & Anr., IV(2018)BC74, MANU/NL/0288/2018. . . . . . . . . . . . . . . . . . . . . . . . 390

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Section 67 Proceedings under section 66 –– The Adjudicating Authority can direct the ex-Directors not to leave the country without prior permission of the Adjudicating Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391 Amandeep Singh Bhatia & Ors. v Vitol S.A. & Anr., IV (2018) BC 74, MANU/NL/0288/2018. . . . . . . . . . . . . . . . . . . . . . . . . 392 CHAPTER VII OFFENCES AND PENALTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393 Section 68 Punishment for concealment of property Section 69 Punishment for transactions defrauding creditors Section 70 Punishment for misconduct in course of corporate insolvency resolution process Section 71 Punishment for falsification of books of corporate debtor Section 72 Punishment for wilful and material omissions from statements relating to affairs of corporate debtor Section 73 Punishment for false representations to creditors Section 74 Punishment for contravention of moratorium or the resolution plan Section 75 Punishment for false information furnished in application Section 76 Punishment for nondisclosure of dispute or payment of debt by operational creditor Section 77 Punishment for providing false information in application made by corporate debtor

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PART III

INSOLVENCY RESOLUTION AND BANKRUPTCY FOR INDIVIDUALS AND PARTNERSHIP FIRMS CHAPTER I

PRELIMINARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401 Section 78 Application Section 79 Definitions

CHAPTER II FRESH START PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405 Section 80 Eligibility for making an application Section 81 Application for fresh start order Section 82 Appointment of resolution professional Section 83 Examination of application by resolution professional Section 84 Admission or rejection of application by Adjudicating Authority Section 85 Effect of admission of application Section 86 Objections by creditor and their examination by resolution professional Section 87 Application against decision of resolution professional Section 88 General duties of debtor Section 89 Replacement of resolution professional

Table of cases – section-wise, topic-wise

Section 90 Directions for compliances of restrictions, etc Section 91 Revocation of order admitting application Section 92 Discharge order Section 93 Standard of conduct CHAPTER III INSOLVENCY RESOLUTION PROCESS. . . . . . . . . . . . . . . . . . . . . . . . 415 Section 94 Application by debtor to initiate insolvency resolution process Section 95 Application by creditor to initiate insolvency resolution process Section 96 Interim-moratorium –– Sections 96 and 101, when contrasted with section 14, would show that section 14 cannot possibly apply to a personal guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417 State Bank of India v V. Ramakrishnan and Ors., AIR 2018 SC 3876, 2018 (6) ABR 42, 2018 (5) ALD 162, III (2018) BC 593 (SC), [2018] 210 CompCas 364 (SC), (2018) 4 Comp LJ 48 (SC), [2018] 145 CLA 447 (SC), 2018 (4) MPLJ 23, 2018 (5) MhLJ 692, MANU/SC/0849/2018, 2018 (4) RCR (Civil) 110, [2018] 149 SCL 107 (SC), 2018 (9) SCALE 597, 2018 (7) SCJ 632. . . . . . . . . . . . . . . . . . . . . . . . 418 Section 97 Appointment of resolution professional Section 98 Replacement of resolution professional Section 99 Submission of report by resolution professional Section 100 Admission or rejection of application cli

Case Digest on Insolvency and Bankruptcy Code, 2016

Section 101 Moratorium –– Sections 96 and 101, when contrasted with Section 14, would show that Section 14 cannot possibly apply to a personal guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 State Bank of India v V. Ramakrishnan and Ors., AIR 2018 SC 3876, 2018 (6) ABR 42, 2018 (5) ALD 162, III (2018) BC 593 (SC), [2018] 210 CompCas 364 (SC), (2018) 4 Comp LJ 48 (SC), [2018] 145 CLA 447 (SC), 2018 (4) MPLJ 23, 2018 (5) MhLJ 692, MANU/SC/0849/2018, 2018 (4) RCR (Civil) 110, [2018] 149 SCL 107 (SC), 2018 (9) SCALE 597, 2018 (7) SCJ 632. . . . . . . . . . . . . . . . . . . . . . . . 423 Section 102 Public notice and claims from creditors Section 103 Registering of claims by creditors Section 104 Preparation of list of creditors Section 105 Repayment plan Section 106 Report of resolution professional on repayment plan Section 107 Summoning of meeting of creditors Section 108 Conduct of meeting of creditors Section 109 Voting rights in meeting of creditors Section 110 Rights of secured creditors in relation to repayment plan Section 111 Approval of repayment plan by creditors

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Table of cases – section-wise, topic-wise

Section 112 Report of meeting of creditors on repayment plan Section 113 Notice of decisions taken at meeting of creditors Section 114 Order of Adjudicating Authority on repayment plan Section 115 Effect of order of Adjudicating Authority on repayment plan Section 116 Implementation and supervision of repayment plan Section 117 Completion of repayment plan Section 118 Repayment plan coming to end prematurely Section 119 Discharge order Section 120 Standard of conduct CHAPTER IV BANKRUPTCY ORDER FOR INDIVIDUALS AND PARTNERSHIP FIRMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Section 121 Application for bankruptcy Section 122 Application by debtor Section 123 Application by creditor Section 124 Effect of application Section 125 Appointment of insolvency professional as bankruptcy trustee

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Case Digest on Insolvency and Bankruptcy Code, 2016

Section 126 Bankruptcy order Section 127 Validity of bankruptcy order Section 128 Effect of bankruptcy order Section 129 Statement of financial position Section 130 Public notice inviting claims from creditors Section 131 Registration of claims Section 132 Preparation of list of creditors Section 133 Summoning of meeting of creditors Section 134 Conduct of meeting of creditors Section 135 Voting rights of creditors Section 136 Administration and distribution of estate of bankrupt Section 137 Completion of administration Section 138 Discharge order Section 139 Effect of discharge Section 140 Disqualification of bankrupt

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Table of cases – section-wise, topic-wise

Section 141 Restrictions on bankrupt Section 142 Modification or recall of bankruptcy order Section 143 Standard of conduct Section 144 Fees of bankruptcy trustee Section 145 Replacement of bankruptcy trustee Section 146 Resignation by bankruptcy trustee Section 147 Vacancy in office of bankruptcy trustee Section 148 Release of bankruptcy trustee CHAPTER V ADMINISTRATION AND DISTRIBUTION OF THE ESTATE OF THE BANKRUPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449 Section 149 Functions of bankruptcy trustee Section 150 Duties of bankrupt towards bankruptcy trustee Section 151 Rights of bankruptcy trustee Section 152 General powers of bankruptcy trustee Section 153 Approval of creditors for certain acts Section 154 Vesting of estate of bankrupt in bankruptcy trustee

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Case Digest on Insolvency and Bankruptcy Code, 2016

Section 155 Estate of bankrupt Section 156 Delivery of property and documents to bankruptcy trustee Section 157 Acquisition of control by bankruptcy trustee Section 158 Restrictions on disposition of property Section 159 After-acquired property of bankrupt Section 160 Onerous property of bankrupt Section 161 Notice to disclaim onerous property Section 162 Disclaimer of leaseholds Section 163 Challenge against disclaimed property Section 164 Undervalued transactions Section 165 Preference transactions Section 166 Effect of order Section 167 Extortionate credit transactions Section 168 Obligations under contracts Section 169 Continuance of proceedings on death of bankrupt

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Table of cases – section-wise, topic-wise

Section 170 Administration of estate of deceased bankrupt Section 171 Proof of debt Section 172 Proof of debt by secured creditors Section 173 Mutual credit and set-off Section 174 Distribution of interim dividend Section 175 Distribution of property Section 176 Final dividend Section 177 Claims of creditors Section 178 Priority of payment of debts CHAPTER VI ADJUDICATING AUTHORITY FOR INDIVIDUALS AND PARTNERSHIP FIRMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 Section 179 Adjudicating Authority for individuals and partnership firms Section 180 Civil court not to have jurisdiction Section 181 Appeal to Debt Recovery Appellate Tribunal Section 182 Appeal to Supreme Court Section 183 Expeditious disposal of applications

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Case Digest on Insolvency and Bankruptcy Code, 2016

CHAPTER VII OFFENCES AND PENALTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 Section 184 Punishment for false information, etc., by creditor in insolvency resolution process Section 185 Punishment for contravention of provisions Section 186 Punishment for false information, concealment, etc., by bankrupt Section 187 Punishment for certain actions PART IV

REGULATION OF INSOLVENCY PROFESSIONALS, AGENCIES AND INFORMATION UTILITIES CHAPTER I

THE INSOLVENCY AND BANKRUPTCY BOARD OF INDIA. . . . . 475 Section 188 Establishment and incorporation of Board Section 189 Constitution of Board Section 190 Removal of member from office Section 191 Powers of Chairperson Section 192 Meetings of Board

Section 193 Member not to participate in meetings in certain cases Section 194 Vacancies, etc., not to invalidate proceedings of Board, Officers and employees of Board Section 195 Power to designate financial sector regulator clviii

Table of cases – section-wise, topic-wise

CHAPTER II POWERS AND FUNCTIONS OF THE BOARD. . . . . . . . . . . . . . . . . . 480 Section 196 Powers and functions of Board Section 197 Constitution of advisory committee, executive committee or other committee Section 198 Condonation of delay CHAPTER III INSOLVENCY PROFESSIONAL AGENCIES . . . . . . . . . . . . . . . . . . . . 485 Section 199 No person to function as insolvency professional agency without valid certificate of registration Section 200 Principles governing registration of insolvency professional agency Section 201 Registration of insolvency professional agency Section 202 Appeal to National Company Law Appellate Tribunal Section 203 Governing Board of insolvency professional agency Section 204 Functions of insolvency professional agencies Section 205 Insolvency professional agencies to make bye-laws CHAPTER IV INSOLVENCY PROFESSIONALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489 Section 206 Enrolled and registered persons to act as insolvency professionals Section 207 Registration of insolvency professionals –– Reputation and character of the Applicant is a material consideration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489 clix

Case Digest on Insolvency and Bankruptcy Code, 2016

Order dated 26 February 2018 passed by Dr Navrang Saini, Whole Time Member of the Insolvency and Bankruptcy Board of India.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490 –– Pendency of serious charge against the applicant can be ground for rejection of application for registration as an Insolvency Professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490 IBBI Order dated 14 November 2017.. . . . . . . . . . . . . . . . . . . . . . . . . . . 491 IBBI Order dated 12 October 2017.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 492 IBBI Order dated 14 November 2017.. . . . . . . . . . . . . . . . . . . . . . . . . . . 493 Section 208 Functions and obligations of insolvency professionals CHAPTER V INFORMATION UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495 Section 209 No person to function as information utility without certificate of registration Section 210 Registration of information utility Section 211 Appeal to National Company Law Appellate Tribunal Section 212 Governing Board of information utility Section 213 Core services, etc., of information utilities Section 224 Obligations of information utility Section 215 Procedure for submission, etc., of financial information Section 216 Rights and obligations of persons submitting financial information

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Table of cases – section-wise, topic-wise

CHAPTER V INSPECTION AND INVESTIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . 499 Section 217 Complaints against insolvency professional agency or its member or information utility Section 218 Investigation of insolvency professional agency or its member or information utility Section 219 Show cause notice to insolvency professional agency or its member or information utility Section 220 Appointment of disciplinary committee CHAPTER VII FINANCE, ACCOUNTS AND AUDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . 503 Section 221 Grants by Central Government Section 222 Board’s Fund Section 223 Accounts and audit PART V

MISCELLENEOUS Section 224 Insolvency and Bankruptcy Fund Section 225 Power of Central Government to issue directions Section 226 Power of Central Government to supersede Board Section 227 Power of Central Government to notify financial service providers, etc. Section 228 Budget clxi

Case Digest on Insolvency and Bankruptcy Code, 2016

Section 229 Annual report Section 230 Delegation Section 231 Bar of jurisdiction Section 232 Members, officers and employees of Board to the public servants Section 233 Protection of action taken in good faith Section 234 Agreements with foreign countries Section 235 Letter of request to a country outside India in certain cases Section 235A Punishment where no specific penalty or punishment is provided Section 236 Trial of offences by Special Court Section 237 Appeal and revision Section 238 Provisions of this Code to override other laws –– The Code will override anything inconsistent contained in any other enactment, including the Income-Tax Act. . . . . . . . . . . . 512 Pr. Commissioner of Income Tax v Monnet Ispat and Energy Ltd.. . . 512 –– Maharashtra Act cannot stand in the way of the corporate insolvency resolution process under the Code. . . . . . . . . . . . . . . . . 512 Innoventive Industries Ltd. v ICICI Bank & Anr., AIR 2017 SC 4084, III (2017) BC 632 (SC), [2017] 205 CompCas 57 (SC), (2017) 4 CompLJ 193 (SC, [2017] 140 CLA 39 (SC), 2017 (5) CTC 725, MANU/SC/1063/2017, [2017] 143 SCL 625 (SC), 2017 (11) SCALE 4, (2018) 1 SCC 407, (2018) 1 WBLR (SC) 446 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512 clxii

Table of cases – section-wise, topic-wise

–– Section 238 would apply when there is inconsistency between the Code and the Arbitration Act . . . . . . . . . . . . . . . . . . . . 513 K. Kishan v Vijay Nirman Company Pvt. Ltd., 2018 (5) BomCR 705, (2018) 4 CompLJ 168 (SC), [2018] 146 CLA 1 (SC), (2018) 8 MLJ 177, MANU/SC/0872/2018, 2018 (4) RCR (Civil) 197, [2018] 150 SCL 110 (SC), 2018 (10) SCALE 256 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 –– Action taken by a ‘Financial Creditor’ under section 13(4) of the SARFAESI Act, 2002 against the Corporate Debtor or a suit pending against Corporate Debtor under section 19 of DRT Act, 1993 cannot be a ground to reject an application under section 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 Unigreen Global Private Limited v Punjab National Bank & Ors., II(2018)BC132, [2018]142CLA131, MANU/ NL/0192/2017, [2018]145SCL272. . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 Followed in: Antrix Diamond Exports Pvt. Ltd. v Bank of India and Ors., MANU/NL/0007/2018, [2018]146SCL28. . . . 514 Ameya Laboratories Ltd. (ALL) v Kotak Mahindra Bank & Ors., [2018]210CompCas279, (2018)4CompLJ392, MANU/NL/0004/2018, [2018]145SCL676 . . . . . . . . . . . . . . . . . . 514 BCL Homes v Canara Bank & Ors., [2018]208CompCas609, (2018)3CompLJ620, MANU/ NL/0037/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514 Neeta Chemicals (I) Pvt. Ltd. v State Bank of India, III(2018)BC120, MANU/NL/0051/2018. . . . . . . . . . . . . . . . . . . . . 514 –– The provisions of ‘Gujarat Electricity Regulatory Commission (Electricity Supply Code and related matters) Regulations, 2015’ cannot override the provision of section 31 of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514 Madhya Gujrat Vij Company Ltd. v Kalptaru Alloys Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 211 of 2018. 515 –– Company petition pending before the High Court cannot be proceeded with further in view of section 238 of the Code. . . . 515 Jaipur Metals & Electricals Employees Organization Through General Secretary Mr. Tej Ram Meena v Jaipur Metals & Electricals Ltd. Through Its Managing Director & Ors., Civil Appeal No. 12023 Of 2018. . . . . . . . . . . . . . . . . . . . . . . 515 Section 238A Limitation

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Case Digest on Insolvency and Bankruptcy Code, 2016

–– The Limitation Act is applicable to the Insolvency and Bankruptcy Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516 BK Educational Services Private Limited v Parag Gupta and Associates, IV (2018) BC 317 (SC), (2018) 4 CompLJ 209 (SC), [2018] 146 CLA 380 (SC), MANU/ SC/1160/2018, 2018 (14) SCALE 482, AIR 2018 SC 5601 . . . . . . . . 516 –– Section 238A to be construed as being retrospective. . . . . . . . . . . . 516 BK Educational Services Private Limited v Parag Gupta and Associates, IV (2018) BC 317 (SC), (2018) 4 CompLJ 209 (SC), [2018] 146 CLA 380 (SC), MANU/ SC/1160/2018, 2018 (14) SCALE 482, AIR 2018 SC 5601 . . . . . . . . 516 Section 239 Power to make rules Section 240 Power to make regulations –– The regulations made by the Board cannot override the provisions of the Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527 Central Bank of India v Resolution Professional of the Sirpur Paper Mills Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 526 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 528 Section 240A Application of this Code to micro, small and medium enterprises Section 241 Rules and regulations to be laid before Parliament Section 242 Power to remove difficulties –– The inclusion of the Eighth Schedule to the Code is in exercise of powers under section 242 and section 252 and is thus not ultra vires. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530 Ashapura Minechem Ltd. v Union of India and Ors., [2017] 205 CompCas 612 (Delhi), [2018] 142 CLA 463 (Delhi), 244 (2017) DLT 716, MANU/DE/3736/2017. . . . . . . . . . . . 531 Section 243 Repeal of certain enactments and savings

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Table of cases – section-wise, topic-wise

Section 244 Transitional provisions Section 245 Amendments of Act 9 of 1932 Section 246 Amendments of Act 1 of 1944 Section 247 Amendments of Act 43 of 1961 Section 248 Amendments of Act 52 of 1962 Section 249 Amendments of Act 51 of 1993 Section 250 Amendments of Act 32 of 1994 Section 251 Amendments of Act 54 of 2002 –– The appellant cannot take steps under section 13(4) of the SARFAESI Act, 2002 or D.R.T. Act, 1985 because it is ‘Financial Creditor’ of ‘Corporate Debtor’ . . . . . . . . . . . . . . . . . . . . . 535 Indian Overseas Bank v Sharda Gems & Jewels Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 195 of 2018. . . . . . . . . . . . 535 Section 252 Amendments of Act 1 of 2004 –– The proceedings under SICA would not survive and would abate.535 ATV Projects (India) Ltd. v Union of India and Ors., [2018]143CLA56(Delhi), 2018(167)DRJ44, [2017]205CompCas643(Delhi), MANU/DE/4728/2017, [2018]145SCL527(Delhi). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536 –– IBC has primacy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536 Jotun India Private Limited and Ors. v PSL Limited, 2018 (2) ABR 350, 2018 (1) Bom CR 524, (2018) 2 CompLJ 222 (Bom), [2018] 142 CLA 290 (Bom), MANU/ MH/0005/2018, [2018] 145 SCL 601 (Bom) . . . . . . . . . . . . . . . . . . . 536

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Case Digest on Insolvency and Bankruptcy Code, 2016

–– Whether legislature fixes a cut-off date or leaves it to the executive to prescribe a cut-off date and same is prescribed, the legislative or the executive action per se is not violative of Article 14 or arbitrary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536 Ashapura Minechem Ltd. v Union of India and Ors., [2017] 205 CompCas 612 (Delhi), [2018] 142 CLA 463 (Delhi), 244 (2017) DLT 716, MANU/DE/3736/2017. . . . . . . . . . . . 537 –– Provisions of IBC should prevail over the provisions of the Companies Act, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 537 Jotun India Private Limited and Ors. v PSL Limited, 2018 (2) ABR 350, 2018 (1) Bom CR 524, (2018) 2 CompLJ 222 (Bom), [2018] 142 CLA 290 (Bom), MANU/ MH/0005/2018, [2018] 145 SCL 601 (Bom) . . . . . . . . . . . . . . . . . . . 537 –– The provision to apply for reconstruction or to have a scheme sanctioned for reconstruction is to be only provided by law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 538 Ashapura Minechem Ltd. v Union of India and Ors., [2017] 205 CompCas 612 (Delhi), [2018] 142 CLA 463 (Delhi), 244 (2017) DLT 716, MANU/DE/3736/2017. . . . . . . . . . . . 538 –– The 4th proviso of section 4(b) deals with cases where schemes have been sanctioned and appeals contesting the sanction have not been filed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 538 ATV Projects (India) Ltd. v Union of India and Ors., [2018] 143 CLA 56 (Delhi), 2018 (167) DR J44, [2017] 205 CompCas 643 (Delhi), MANU/DE/4728/2017, [2018] 145 SCL 527 (Delhi) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539 –– The classification made, differentiating between cases where schemes stand sanctioned under section 18(4) and (12) of the SIC Act and where the draft scheme for rehabilitation were pending consideration, is a valid classification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539 Ashapura Minechem Ltd. v Union of India and Ors., [2017] 205 CompCas 612 (Delhi), [2018] 142 CLA 463 (Delhi), 244 (2017) DLT 716, MANU/DE/3736/2017. . . . . . . . . . . . 541 –– Sanctioned rehabilitation schemes have been treated as schemes deemed to have been sanctioned under section 31(1) of the Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 541 Ashapura Minechem Ltd. v Union of India and Ors., [2017] 205 CompCas 612 (Delhi), [2018] 142 CLA 463 (Delhi), 244 (2017) DLT 716, MANU/DE/3736/2017. . . . . . . . . . . . 542 clxvi

Table of cases – section-wise, topic-wise

–– The inclusion of the Eighth Schedule to the Code is in exercise of powers under section 242 and section 252 and is thus not ultra vires. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 542 Ashapura Minechem Ltd. v Union of India and Ors., [2017] 205 CompCas 612 (Delhi), [2018] 142 CLA 463 (Delhi), 244 (2017) DLT 716, MANU/DE/3736/2017. . . . . . . . . . . . 543 –– If the scheme sanctioned under section 18(4) of SICA Act, 1985 is treated to be a scheme sanctioned under section 31(1) of the Code, no relief can be granted to the appellant in absence of any provision of review of the scheme sanctioned under section 31(1) of the Code. . . . . . . . . . . . 544 Hada Textile Industries Limited v Sales Tax Officer & Ors. (Company Appeal (AT) (Insolvency) No. 325 of 2017. . . . . . . . . . . 544 Section 253 Amendments of Act 51 of 2007 Section 254 Amendments of Act 6 of 2009 Section 255 Amendment of Act 18 of 2013 –– “Winding up” under the Companies Act, 2013 has to be treated as “liquidation” under the Code. . . . . . . . . . . . . . . . . . . . . . . 545 Forech India Pvt. Ltd. v Edelweiss Assets Reconstruction Company Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 202 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 546 Followed in: Innoventive Industries Limited v Kumar Motors Private Limited, III(2018)BC1, MANU/ NL/0019/2018, dated 09-02-2018. . . . . . . . . . . . . . . . . . . . . . . . . . 546 Birender Kumar v Adel Landmarks Ltd, [2018]147SCL62, MANU/NL/0016/2018 . . . . . . . . . . . . . . . . . . . 546 State Bank of India v Shakti Bhog Foods Limited, Company Appeal (AT) (Insolvency) No. 83 of 2018, MANU/NL/0041/2018)[dated 23-11-2017 . . . . . . . . . . . . . . . . . . 546 Indiabulls Housing Finance Ltd. v Shree Ram Urban Infrastructure Ltd., Company Appeal (AT) (Insolvency) No. 252 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 546 –– Application under section 10 cannot be filed where winding up proceedings has already been initiated by the High Court or Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 546 clxvii

Case Digest on Insolvency and Bankruptcy Code,Â 2016

Unigreen Global Private Limited v Punjab National Bank & Ors., II(2018)BC132, [2018]142CLA131, MANU/ NL/0192/2017, [2018]145SCL272. . . . . . . . . . . . . . . . . . . . . . . . . . . . Followed in: Innoventive Industries Limited v Kumar Motors Private Limited, III(2018)BC1, MANU/NL/0019/2018. . Krishna Kraftex Pvt. Ltd. v HDFC Bank & Ors., [2018]146SCL72, MANU/NL/0005/2018 . . . . . . . . . . . . . . . . . . . Antrix Diamond Exports Pvt. Ltd. v Bank of India and Ors., MANU/NL/0007/2018, [2018]146SCL28. . . . . . . . . . . . . . . Ameya Laboratories Ltd. (ALL) v Kotak Mahindra Bank & Ors, [2018]210CompCas279, (2018)4CompLJ392, MANU/NL/0004/2018, [2018]145SCL676 . . . . . . . . . . . . . . . . . . Birender Kumar v Adel Landmarks Ltd., [2018]147SCL62, MANU/NL/0016/2018 . . . . . . . . . . . . . . . . . . . Neesa Leisure Limited, Ahmedabad v Asset Reconstruction Company Limited, Company Appeals (AT) (Insolvency) Nos. 62 & 63 of 2018, MANU/ NL/0115/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indiabulls Housing Finance Ltd. v Shree Ram Urban Infrastructure Ltd., Company Appeal (AT) (Insolvency) No. 252 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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548 548 548 548

548 548

548

Table of cases A D Electro Steel Co Pvt Ltd v Anil Steels, NCLAT, Company Appeal (AT) (Insolvency) No. 194 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . 122 Achenbach Buschhutten CmbH & Co. Appellant v Arcotech Ltd, NCLAT, Company Appeal (AT) (Insolvency) No. 97 of 2017. . . . . . . . . . . . 39 Aditya Enterprises v Rajratan Exim Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 335 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 30 Ajay Chaturvedi v JM Financial Asset Reconstruction Co. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 320 of 2018. . . . . . . . . . . . . . 51 Akshay Jhunjhunwala and Ors. v Union of India, AIR 2018 Cal 139, 2018 (1) CLJ (CAL) 418, [2018] 144 CLA 435 (Cal), MANU/WB/0075/2018, [2018] 147 SCL 163 (Cal). . . . . . . . . . . . . . . . . . . . 70 Alchemist Asset Reconstruction Co Pvt Ltd. v NIIL Infrastructure Pvt Ltd, IB 560(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . 67 Alchemist Asset Reconstruction Co. Ltd. v Moser Baer India Limited, CA No.7(PB) 2018, NCLT, Principal Bench . . . . . . . . . . 249, 259, 265 Alchemist Asset Reconstruction Co. Ltd. v Triupati Buildings & offices Pvt. Ltd., (IB) 110(PB)/2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Alchemist Asset Reconstruction Company Limited v Hotel Gaudavan Private Limited, AIR 2017 SC 5124 , [2018] 145 SCL 428 (SC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 Alchemist Asset Reconstruction Company Ltd v Hotel Gaudvan Pvt Ltd, Civil Appeal No 16929/2017, SC. . . . . . . . . . . . . . . . . . . . . . . . . . . 327 Alchemist Asset Reconstruction Company Ltd. v Hotel Gaudavan Pvt. Ltd., AIR2017SC5124, MANU/SC/1690/2017, [2018]145SCL428(SC), 2018 (7) SCJ 110 . . . . . . . . . . . . . . . . . . . . . . . . . . . 228 All Cargo Logistics Limited v HDO Technologies Limited, TCP No. 825/I&BP/NCLT/MB/MAH/2017, Mumbai Bench, NCLT. . . . . . . . . 165 Alloy Steels Emporium Pvt Ltd v Steelco India Pvt Ltd, (IB)383(ND)/2017, New Delhi Bench II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 Amandeep Singh Bhatia & Ors. v Vitol S.A. & Anr., IV(2018) BC74, MANU/NL/0288/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390, 392 Amar Remedies Ltd. (Through the Resolution Professional) v IDBI Bank Ltd. & Ors, Company Appeal (AT) (Insolvency) No. 59 of 2018, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 Amar Tours & Transport v M/s Go Airlines (India) Limited, CP No. (IB) 421 (PB)/2017, Principal Bench NCLT . . . . . . . . . . . . . . . . . . . . . . 155

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Case Digest on Insolvency and Bankruptcy Code,Â 2016

Ameya Laboratories Ltd. (ALL) v Kotak Mahindra Bank & Ors., [2018]210CompCas279, (2018)4CompLJ392, MANU/ NL/0004/2018, [2018]145SCL676;. . . . . 75, 193, 210, 211, 215, 217, 514, 548 Amit Basia & Anr. v Anant Overseas Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 41 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 Amit Spinning Industries Limited, Re, NCLT Principal Bench, New Delhi, IB-131 (PB)/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Andhra Bank dated v F.M. Hammerle Textile Ltd., IV(2018)BC88, MANU/NL/0160/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Anil Goel v M/s REI Agro Ltd, CA (IB) No 540/KB/2017, CP (IB) No 73/KB/2017, NCLT, Kolkata Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337 Anil Mahindroo v Earth Iconic Infrastructure (P) Ltd., (IV(2017) BC128, MANU/NL/0055/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 48 Anil Nanda v Hari Kishan Sharma & Ors., Company Appeal (AT) (Insolvency) No. 167 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Ankit Patni v State Bank of India & Anr., Company (AT) (Insolvency) No. 369 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Annapurna Infrastructure Private Limited v SORIL Infra Resources Limited, [2017] 139 CLA 150. . . . . . . . . . . . . . . . . . . . . . . . . . 36, 37 Anshuman Chaturvedi, RP v IDBI Bank Ltd, IA 45 of 2018, CP (IB) No 19/7/NCLT/AHM/2017, NCLT, Ahmedabad Bench. . . . . . . . . . . 325 Antrix Diamond Exports Pvt. Ltd. v Bank of India and Ors, MANU/NL/0007/2018, [2018]146SCL28. . . 74, 193, 209, 211, 215, 217, 514 Anu Elastics Pvt Ltd v Aggarwal Elastics, Company Appeal (AT) (Insolvency) No. 145 of 2017, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 Arcelor Mittal India Private Limited v Satish Kumar Gupta & Ors., AIR 2018 SC 5646, [2018] 146 CLA 293 (SC), MANU/ SC/1123/2018, 2018 (13) SCALE 381 . . . . . . . . . . . . . . . . . . . . . . 171, 224, 297 Aruna Hotels Limited v C. Ganapathy, Company Appeal (AT) (Insolvency) No. 88 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 Aruna Hotels Limited v D. Ramjee, Company Appeal (AT) (Insolvency) No. 87 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 Aruna Hotels Limited v Mr. N. Krishnan, Company Appeal (AT) (Insolvency) No. 59 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Ashapura Minechem Ltd. v Union of India and Ors., [2017] 205 CompCas 612 (Delhi), [2018] 142 CLA 463 (Delhi), 244 (2017) DLT 716, MANU/DE/3736/2017. . . . . . . . . . . . . 314, 531, 537, 538, 541, 542 Ashish Mohan Gupta v Hind Motors Ltd., Company (AT) (Insolvency) Nos. 239, 240 and 241 of 2017, III(2018)BC47, [2018]145CLA235, MANU/NL/0140/2018, [2018] 148 SCL 37. . . . . 307, 315

clxx

Table of cases

Ashok Magnetics Ltd, Re, CP (IB) No. 551/(IB)/2017, Chennai Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260 Ashutosh Singhania v Liquidator, Vindhiya Vasini Industries Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 439 of 2018 . . . . . . . . . . 370 Asset Reconstruction Company India Ltd. v Ramswarup Industries Ltd., CP(IB) No. 573/KB/2017, Kolkata Bench, NCLT. . . . . . . . 111 Atul Sharma v Gudearth Homes Infracon Pvt. Ltd. & Anr., [2018]146SCL716, MANU/NL/0071/2018. . . . . . . . . . . . . . . . . . . . . . . . . . 253 ATV Projects (India) Ltd. v Union of India and Ors., [2018] 143 CLA 56 (Delhi), 2018 (167) DR J44, [2017] 205 CompCas 643 (Delhi), MANU/DE/4728/2017, [2018] 145 SCL 527 (Delhi). . . . . . . 536, 539 Avance Logistics & Trading India Private Limited v Bell Finvest (India) Limited, Company Appeal (AT) (Insolvency) No. 07 of 2018 . . 14, 30 AVON Capital v Tattva & Mittal Lifespaces Pvt. Ltd, [2018]149SCL555, MANU/NL/0189/2018. . . . . . . . . . . . . . . . . . . . . . . . . . 189 Axis Bank Ltd. v Lotus Three Developments Ltd. & Ors., IV (2018) BC 92, (2018) 210 CompCas 110, (2018) 146 CLA 207, MANU/NL/0179/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 30, 84, 184 Axis Bank Ltd. v Ramswarup Industries Ltd., CP(IB) No. 580/ KB/2017, Kolkata Bench NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Axis Bank v JODPL Limited, NCLT, Allahabad Bench, CP No. (IB) 25/ALD/2017, CA 73/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 B.V.S. Lakshmi v Geometrix Laser Solutions Private Limited, MANU/NL/0221/2017, [2018]142CLA321, IV(2018)BC11 . . . . . . . . . . . . 142 Baddi Foils Pvt Ltd v Biotropics Pharma Pvt Ltd, (IB) 239(PB)/2017, Principal Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 Bajoria Holdings Pvt. Ltd. v Bard Roy Infotech Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 275 of 2017, MANU/ NL/0346/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 Bank of Baroda v Amrapali Silicon City Private Limited, [2017] 143 SCL 724, [2017] 204 CompCas 285, [2017] 140 CLA 226 . . . . . . . 88, 264 Bank of India v Tirupati Infraprojects Pvt Ltd, (NCLT, Principal Bench), C.P. No. IB-104(PB)/2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Bank of India v Tirupati Infraprojects Pvt Ltd, C.P. No. IB 104(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . 18, 123, 262 BCL Homes Ltd. v Canara Banks & Ors., Company Appeal (AT) (Insolvency) No. 02 of 2018, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 BCL Homes v Canara Bank & Ors., ([2018]208CompCas609, (2018)3CompLJ620, MANU/NL/0037/2018;. . . . . . . . 75, 210, 211, 217, 514 Bhagwati Corporation v Shrinidhi Laminates Limited, (NCLT, Ahmedabad Bench), C.P. IB No. 75/9/NCLT/AHM/2017. . . . . . . . . . . . . . . 38 clxxi

Case Digest on Insolvency and Bankruptcy Code,Â 2016

Bhash Software Labs Limited v Mobme Wireless Solutions Limited, (2018) 1 CompLJ 42, I (2018) BC 28. . . . . . . . . . . . . . . . . . . . . 66, 151 Bhaskara Agro Agencies v Super Agri Seeds Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 380 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . 309 Bhavik Bhimjyani v Uday Vinodchandra Shah, Resolution Professional of Neelkanth Township & Construction Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 182 of 2018 . . . . . . . . . . . . . . . . . 260 Bhushan Energy Ltd. v State Bank of India & Ors., Company Appeal (AT) (Insolvency) No. 267 of 2018 . . . . . . . . . . . . . . . . . . 298, 300, 301 Billets Elektro Werke Private Limited v Tryst Industries Private Limited, New Delhi Bench II, NCLT, IB No. (IB), 257(ND)/2017. . . . . . . . . 38 Birender Kumar v Adel Landmarks Ltd, [2018]147SCL62, MANU/NL/0016/2018 . . . . . . . . . . . . . . . . . . . . . . 76, 174, 193, 215, 548, 546 BK Educational Services Private Limited v Parag Gupta and Associates, IV (2018) BC 317 (SC), (2018) 4 CompLJ 209 (SC), [2018] 146 CLA 380 (SC), MANU/SC/1160/2018, 2018 (14) SCALE 482, AIR 2018 SC 5601. . . . . . . . . . . . . . . . . . 12, 72, 97, 139, 167, 516 Blue Stamping and Forgings Ltd. v BMM Ispat Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 160 of 2018 . . . . . . . . . . . . . . . . . 188 BMI Minerals Pvt Ltd v Fenace Auto Ltd, (IB)-294 (PB)/2017, Principal Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 Brij Bhushan Singal v Bhushan Steel Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 357 of 2018 . . . . . . . . . . . . . . . . . . 298, 300, 301 Brilliant Alloys Private Limited v Mr. S. Rajagopal & Ors., Special Leave to Appeal (C) No(s). 31557/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 BSR Diagnostics Ltd. v Chattisgarh State Power Distribution Company Ltd. (CSPDCL), MA 06/2018, NCLT, Mumbai Bench, CP 1283/I&BC/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236 Burn Standard Co Ltd v United Bank of India, GA No. 2287 of 2017 dated 24 July 2017, Calcutta High Court.. . . . . . . . . . . . . . . . . . . . . . . 229 CA Rajendra K Bhuta (Resolution Professional) Applicant in the matter of Best Deal TV Pvt Ltd, NCLT, Mumbai Bench, MA 551/2017, CP No 852/I&BP/2017, 2 February 2018.. . . . . . . . . . . . . . . . . . 324 Canara Bank v Deccan Chronicle Holdings Limited, Company Appeal (AT) (Insolvency) No. 147 of 2017, NCLAT. . . . . . . . . . . 230, 248, 327 Canara Bank v Deccan Chronicle Holdings Limited, CP No. IB/41/7/HDY/2017, Hyderabad Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . 230 Canara Bank Vs. Deccan Chronicle Holdings Limited, II (2018) BC 70, [2017] 141 CLA 93, MANU/NL/0104/2017, [2017] 144 SCL 90. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243, 327

clxxii

Table of cases

Central Bank of India v Ashok Magnetics, CP/551(IB)/CB/2017 , NCLT, Chennai Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68, 151 Central Bank of India v Resolution Professional of the Sirpur Paper Mills Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 526 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310, 528 Chandu Laxman Chavan v Union of India & Ors., Company Appeal (AT) (Insolvency) No. 15 of 2018 . . . . . . . . . . . . . . . . . . . . . . . 271, 308 Chharia Holdings Pvt. Ltd. v Brys International Pvt. Ltd. & Ors., Company Appeal (AT) (Insol.) No. 126 of 2017. . . . . . . . . . . . . . . . . . . . . . . 57 Chitra Sharma and Ors. v Union of India and Ors., 2018 5 AWC 4829 SC, III (2018) BC 478 (SC), 2018 (5) BomCR 712, [2018] 210 CompCas 609 (SC), (2018) 3 CompLJ 575 (SC), (2018) 3 CompLJ 575 (SC), MANU/SC/0834/2018, 2018 (4) RCR (Civil) 45, [2018] 148 SCL 833 (SC), 2018 (9) SCALE 490 . . . . . . . 44, 45, 295 Clutch Auto Ltd., Re, (IB) 15(PB)/2017, Principal Bench, NCLT, New Delhi. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 Co. Jegannathan v Spring Field Shelters Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 79 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Col Vinod Awasthi v AMR Infrastructure Ltd, [2017] 141 SCL 70.. . . . . . . . . 127 Col. Vinod Awasthi v AMR Infrastructure Ltd NCLT Principal Bench, C.P. No. (IB)-10(PB)/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Core Hotels Ventures Private Limited and Anr. v Bank of Baroda, Company Appeal (AT) (Insolvency) No. 84 of 2018 . . . . . . . . . . . . . . . . . . . 85 Crompton Greaves Consumer Electricals Limited v K. P. R. Industries (India) Limited Company, Appeal (AT) (Insolvency) No. 12 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 Daimler Financial Services Pvt Ltd v M/s Sharda Jems and Jewels Pvt Ltd, IB- 376/(ND)/2017, New Delhi Bench II, NCLT. . . . . . . . . . . . . . . . 98 Dakshin Gujarat VIJ Company Ltd. v ABG Shipyard Ltd. and Ors., (I(2018)BC172, MANU/NL/0020/2018. . . . . . . . . . . . . . . . . . . . . 55, 237 Darshak Enterprise Pvt. Ltd. v Chhaparia Industries Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 327 of 2017; Symphony Ltd. v Chhaparia Industries Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 328 of 2017 . . . . . . . . . . . . . . . . . 317 Dasaprakash Hotels & Resorts Pvt Ltd, Re, CP (IB) No. 118/ ALD/2017, Allahabad Bench, NCLT dated 5 October 2017. . . . . . . . . . . . 158 Davinder Ahluwalia v Sumit Aviation, New Delhi, NCLT, IB No. (IB) 229 (ND)/2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 DCB Bank Ltd. v Prag Distillery Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 193 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247

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Case Digest on Insolvency and Bankruptcy Code,Â 2016

Design Worx Infrastructure India Pvt. Ltd. v Premier Restaurants Private Ltd. (NCLAT), Company Appeal (AT) (Ins) No. 73 of 2017. . . . . . . 39 Devendra Padamchand Jain (Resolution Professional) v Sandhya Prakash & Ors., [2018]148SCL243, MANU/NL/0152/2018. . . . . . . . 261, 282 Devendra Padamchand Jain v State Bank of India & Ors., II(2018)BC164, MANU/NL/0011/2018. . . . . . . . . . . . . . . . . . . . . . . . . 307, 331 DF Deutsche Forfait AG and Ors. v Uttam Galva Steel Ltd., [2017] 141 SCL 392 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Diamond Engineering (Chennai) v Shah Brothers, Company Appeal (AT) (Insolvency) No. 65 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Diamond Polymers Pvt Ltd v Pushkar Impex Pvt Ltd, CP (IB) No 286/KB/2017, NCLT, Kolkata Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 DK Kapur v Reserve Bank of India, 2001 IIAD Delhi 259, (2001) ILR 1 Delhi 35, [2001] 105 CompCas 643 (Delhi).. . . . . . . . . . . . . . . . . . . . 232 Dunn Foods Pvt Ltd, CA No.141/2017, CP (IB) No. 16/Chd/ Pb/2017, Chandigarh Bench dated 26 September, 2017. . . . . . . . . . . . . . . 287 Edelweiss Asset Reconstruction Co Ltd v Net 4 India Ltd CP No. (IB) 409(PB)/2017, NCLT Principal Bench . . . . . . . . . . . . . . . . . . . . . . . . . . 251 Edelweiss Asset Reconstruction Company Limited v Kalpatru Alloys Private Limited, Ahmedabad, NCLT, C.P. (IB) No. 84/7/ NCLT/AHM/2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Edelweiss Asset Reconstruction Company Limited v Kalptaru Alloy Private Limited, [2017] 205 CompCas 186, [2017] 141 CLA 501. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71, 114 Edelweiss Asset Reconstruction Company Ltd. v Synergies Dooray Automotive Ltd. & Ors.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311 Edelweiss Asset Reconstruction Company v Tecpro Systems Ltd, (IB) 197(PB)/2017, Principal Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 Electrosteel Steels Ltd. v Imperia Structures Ltd., Company Appeal (AT) (Insolvency) No. 238 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . 175 Engenious Engineering Private Limited v Onex Natura Private Limited, CP(IB) No. 92/7/NCLT/AHM/2017, NCLT Ahmedabad Bench. . 72 Engenious Engineering Pvt Ltd v Onaex Natura Pvt Ltd, Company Appeal (AT) (Insolvency) No. 249 of 2017 . . . . . . . . . . . . . . . . . 111 Era Infra Engineering Ltd v Prideco Commercial Projects Pvt Ltd, Company Appeal (AT) (Ins) No.3 1 of 2017, NCLAT. . . . . . . . . . . . . . . . . . 187 Essar Steel India Limited v Reserve Bank of India, [2017] 143 SCL 580 (Guj), [2017] 141 CLA 45 (Guj) . . . . . . . . . . . . . . . . . . . . 65, 102, 149 Exotica Housing & Infrastructure Projects v KAD Housing Pvt Ltd, NCLT, Principal Bench, (IB) 396(PB)/2017. . . . . . . . . . . . . . . . . . . 65, 149

clxxiv

Table of cases

Explo Media Pvt. Ltd. v Ambience Pvt. Ltd., (Company Appeal (AT) (Insolvency) No. 20 of 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142, 176 Export Import Bank of India v CHL Limited, C.P. No. IB392(PB)/2017, Principal Bench NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 Export-Import Bank of India & Anr. v Astonfield Solar (Gujarat) Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 754 of 2018. . . 196 Forech India Pvt. Ltd. v Edelweiss Assets Reconstruction Company Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 202 of 2017, MANU/NL/0186/2017. . . . . . . . . . . . . . . . . . 76, 77, 174, 546 GAIL (India) Limited v Rajeev Manaadiar & Ors., Company Appeal (AT) (Insolvency) No. 319 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . 243 Gaja Trustee Company Private Limited & Ors. v Haldia Coke and Chemicals Private Limited, IV(2018)BC77, [2018]145CLA303, [2018]149SCL1, [2018]149SCL1. . . . . . . . . . . . . . 195, 197 Gammon India Ltd. v Neelkanth Mansions and Infrastrucure Pvt. Ltd., [2019]212CompCas579 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 Gaurav Manav v Rachel L. Chand & Anr., IV(2018)BC95, MANU/NL/0161/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Gemini Innovations Pvt. Ltd. v State Bank of India, Company Appeal (AT) (Insolvency) No. 199 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Global Coke Limited Kolkata Bench, C.P. (IB) No. 69/KB/2018, NCLT. . . . . 194 Global Coke Ltd, Re, Kolkata Bench, NCLT, CP(IB)No. 511/KB/2017. . . . . . 206 Global Supply Marine Co v Swiber Offshore India Pvt Ltd, MA 437/2017 in CP 51/I&BP/NCLT/MB/MAH/2017, Mumbai Bench. . . . . . 263 GMB Ceramics Ltd. v Spartek Ceramics India Ltd. & Ors., Company (AT) (Insolvency) No. 258 of 2017. . . . . . . . . . . . . . . . . . . . . . . . 376 Goel Roadways v Action Ispat Power Pvt Ltd, (IB)-422(PB)/2017, Principal Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 H.N. Nagaraj v Edelweiss Asset Reconstruction Company Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 210 of 2018. . . . . . . . . . . . . 101 Hada Textile Industries Limited v Sales Tax Officer & Ors. (Company Appeal (AT) (Insolvency) No. 325 of 2017. . . . . . . . . . . . . 317,544 Harmoni Alloys v Teksons Pvt Ltd, NCLT, Mumbai Bench (I), TCP No. 685/I&BP/NCLT/MB/MAH/2017. . . . . . . . . . . . . . . . . . . . . . . . . 157 Horseshoe Entertainment & Hospitality Private Limited v The Comedy Store Limited, Company Appeal (AT) (Insolvency) No. 214 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195, 197, 198 Hyosan Automative India Pvt Ltd v Metecno (India) Pvt Ltd, Company Appeal (AT) (Insolvency) No. 152 of 2017, NCLAT. . . . . . 159, 251 ICICI Bank Limited v Oceanic Tropical Fruits Private Limited & Ors., III(2018)BC109, MANU/NL/0135/2018. . . . . . . . . . . . . . . . 255, 275, 286 clxxv

Case Digest on Insolvency and Bankruptcy Code,Â 2016

ICICI Bank Ltd v ABG Shipyard Limited, CP No. 53/7/NCLT/ AHM/2017, NCLT, Ahmedabad. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 ICICI Bank Ltd v Innoventive Industries Limited, Mumbai, NCLT, MA 157, CP 01/I&BP/2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53, 234 ICICI Bank Ltd. v Interim Resolution Professional for Ruchi Soya Industries Ltd., Company Appeal (AT) (Insolvency) No. 390 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247, 277 ICICI Bank Ltd. v Vista Steel Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 13 of 2018, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 IDBI Bank Limited v Lanco Infratech Limited, CP (IB) No. 111/7/ HDB/2017, Hyderabad Bench NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 IDBI Bank v Jaypee Infratech Limited, CP No. (IB)/77/ALD/2017, Allahabad Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 IDBI v BCC Estates Private Limited, Ahmedabad Bench, NCLT, C.P. No. (IB) 81/7/NCLT/AHM/2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 IFCI Limited v ERA Housing & Developers (India) Limited, CP No. (IB) 489(PB)/2017, Principal Bench NCLT. . . . . . . . . . . . . . . . . . . . . . . . 18 Incredible Unique Buildcon Ltd v Clutch Auto Ltd, [2017] 142 SCL 684, [2017] 140 CLA 72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 Inderpreet Singh v Mariners Buildcon India Limited, CP No. (IB)185(PB)/2017, Special Bench New Delhi, NCLT . . . . . . . . . . . . . . . . . . 66, 150 Indiabulls Housing Finance Ltd. v Shree Ram Urban Infrastructure Ltd., Company Appeal (AT) (Insolvency) No. 252 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76, 174, 193, 216, 546, 548 Indian Bank & Ors. v Kadevi Industries Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 128 of 2018; Raghu Babu Gunturu v Kadevi Industries Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 129 of 2018; Kadevi Industries Ltd. v Indian Bank & Ors., Company Appeal (AT) (Insolvency) No. 135 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 Indian Bank v Athena Demwe Power Limited, Principal Bench NCLT, CP No. 55/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Indian Overseas Bank & Ors. v Kamineni Steel & Power India Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 335 of 2017, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271, 308 Indian Overseas Bank v Amtek Auto Limited (Represented by Resolution Professional), NCLAT, Company Appeal (AT) (Insolvency) No. 267 of 2017, dated 15 November 2017.. . . . . . . . . . . . . . 232 Indian Overseas Bank v Dinkar T. Venkatsubramaniam, MANU/ NL/0174/2017, [2018] 145 SCL 138. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

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Table of cases

Indian Overseas Bank v Sharda Gems & Jewels Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 195 of 2018 . . . . . . . . . . . . . . . . . 535 Innovative Build Estate Pvt Ltd, Re, Chandigarh Bench, NCLT . . . . . . . . . . . 152 Innovative House Industries Pvt Ltd v Jap Infratech Pvt Ltd, CP No. lB No. (IB) 212(ND)/2017, NCLT, New Delhi Bench . . . . . . . . . . . . . . 252 Innoventive Industries Limited v ICICI Bank, [2017] 139 CLA 335 , III (2017) BC 33 , [2017] 205 CompCas 23 , LNIND 2017 SC 440..27, 40 Innoventive Industries Limited v Kumar Motors Private Limited, III(2018)BC1, MANU/NL/0019/2018 . . . . . . . . . . 76, 174, 193, 215, 546, 548 Innoventive Industries Limited v Maharashtra State Electricity Distribution Company Ltd., Appellate Tribunal, Company Appeal (AT) (Insolvency) No. 156 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Innoventive Industries Ltd v Kumar Motors Pvt Ltd, Company Appeal (AT) (Insolvency) No. 181 of 2017, NCLAT. . . . . . . . . . . . . . . . . . . 120 Innoventive Industries Ltd. v ICICI Bank & Anr., AIR 2017 SC 4084, III (2017) BC 632 (SC), [2017] 205 CompCas 57 (SC), (2017) 4 CompLJ 193(SC), [2017] 140 CLA 39 (SC), 2017 (5) CTC 725, MANU/SC/1063/2017, [2017] 143 SCL 625 (SC), 2017(11)SCALE 4, (2018) 1 SCC 407, (2018) 1 WBLR (SC) 446. . . . . . . . . . . . . . . . . . . . . . . 11, 12, 14, 29, 69, 70, 97, 253, 512 Innoventive Industries Ltd. v Maharashtra State Electricity Distribution Company Ltd., Company Appeal (AT) (Insolvency) No. 156 of 2017 & I.A. No. 612 of 2017. . . . . . . . . . . . . . . . . . 248 Insolvency and Bankruptcy Board of India v Wig Associates Pvt. Ltd. & Ors., IV(2018)BC127, [2018]210CompCas103, [2018]145CLA532, MANU/NL/0180/2018. . . . . . . . . . . . . . . . . . . . . . 299, 378 Inspira Martifer Solar Limited v. Alex Green Energy Private Limited, CP IB No. 698/KB/2017 , Kolkata Bench, NCLT. . . . . . . . . . . . . . 136 International Road Dynamics South Asia Pvt. Ltd. v D.A. Toll Road Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 77 of 2017 . . . . . . 12 Invent Assets Securitisation & Reconstruction Pvt Ltd v SAL Steel Ltd, IA 364/2017, CP (IB) No. 94/9/NCLT/AHM/2017, NCLT, Ahmedabad Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273 Ishwar Khandelwal v Amrapali Infrastructure Private Limited, Company Application No. IB/21/(PB) 2017, Principal Bench, NCLT . . . . 164 J K Jute Mills Company Limited v Surendra Trading Company, [2017] 142 SCL 188, [2017] 204 CompCas 483, [2017] 138 CLA 258. . . . . 98 J P Engineers Pvt Ltd v Indo Alusys Industries Ltd, [2017] 143 SCL 696.. . . 158 J.P. Engineers Private Limited v Murti Udyog Limited, Company Appeal (AT) (Insolvency) No. 321 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . 14, 29

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Case Digest on Insolvency and Bankruptcy Code,Â 2016

Jagir Singh v Ranbir Singh, AIR 1979 SC 381, (1979) 1 SCC 560, [1979] 2 SCR 282.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Jagmohan Bajaj v Shivam Fragrances Private Limited & Anr., [2018]210CompCas84, [2018]146CLA240, MANU/ NL/0197/2018, 2018]149SCL598. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 30, 93 Jai Ambe Enterprise v SN Plumbing Pvt Ltd, CP No. 1268/IBC/ NCLT/MB/MAH/2017, Mumbai Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . 261 Jaipur Metals & Electricals Employees Organization Through General Secretary Mr. Tej Ram Meena v Jaipur Metals & Electricals Ltd. Through Its Managing Director & Ors., Civil Appeal No. 12023 Of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515 JAS Telecom Pvt. Ltd. v Eolane Electronics Bangalore Pvt. Ltd., [2018]144CLA89, MANU/NL/0098/2018. . . . . . . . . . . . . . . . . . . . . . . 246, 356 JBB Enterprises v YMS Mobitech Pvt Ltd, Allahabad Benchx, CP No. (IB) 127/ALD/2017, NCLAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 JK Jute Mill Majdoor Morcha v Juggilal Kamlapat Jute Mills Ltd, [2017] 143 SCL 761 , I (2018) BC 33 , [2017] 141 CLA 97. . . . . . . . . . . . . . 165 JK Jute Mill Mazdoor Morcha v Juggilal Kamlapat Jute Mills Co. Ltd., Company Appeal (AT) (Insolvency) No. 82 of 2017. . . . . . . . . . . . . . . 57 JK Jute Mills Company Limited v Surendra Trading Company, [2017] 142 SCL 188, [2017] 204 CompCas 483, [2017] 138 CLA 258. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95, 200, 383 JK Jute Mills Company Limited v Surendra Trading Company, NCLAT, Company Appeal (AT) No. 9 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . 55 JODPL Pvt Ltd, Re, CP No 25/ALD/2017, NCLT, Allahabad Bench . . . . . . . 322 Jotun India Private Limited and Ors. v PSL Limited, 2018 (2) ABR 350, 2018 (1) Bom CR 524, (2018) 2 CompLJ 222 (Bom), [2018] 142 CLA 290 (Bom), MANU/MH/0005/2018, [2018] 145 SCL 601 (Bom). . . . . . . . . . . . . . . . . . . . . 118, 233, 365, 380, 381, 536, 537 Jotun India Private Ltd. v PSL, CA (L) No. 572 and 333 & 417 of 2017, CP No. 434 of 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 JP Engineers Private Limited v Indo Alusys Industries Ltd, New Delhi Bench III, (IB) 203(ND)/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 K Raghavendra Rao v Lakshmi Vilas Bank, Company Appeal (AT)(Insolvency) No. 189 of 2017, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . . . 159 K. Kesava v Ajay Gopaldas Samat (HUF) & Ors,. (IV(2018) BC113, MANU/NL/0162/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 30 K. Kishan v Vijay Nirman Company Pvt. Ltd., 2018 (5) BomCR 705, (2018) 4 CompLJ 168 (SC), [2018] 146 CLA 1 (SC), (2018) 8 MLJ 177, MANU/SC/0872/2018, 2018 (4) RCR (Civil) 197, [2018] 150 SCL 110 (SC), 2018 (10) SCALE 256. . . . . . . . . . . . . . . 57, 59, 513 clxxviii

Table of cases

K. Raghavendra Rao v Lakshmi Vilas Bank , NCLAT, Company Appeal (AT) (Insolvency) No. 189 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 K.S. Oils Ltd. v The State Trade Corporation of India Ltd. & Anr, MANU/NL/0021/2018, [2018]146SCL588. . . . . . . . . . . . . . . . . . . . . . . . . . 229 Kamal Dutta v Anubhuti Aggarwal & Anr., Company Appeal (AT) (Insolvency) No. 329 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Kamineni Steel & Power India Pvt. Ltd. v Indian Bank & Ors., Company Appeal (AT) (Insolvency) No. 45 of 2018, . . . . . . . . . . . . . 271, 308 Kannan Tiruvengandam v M. K. Shah Exports Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 203 of 2018 . . . . . . . . . . . . . . . . . 369 Karismaa Foundations Pvt. Ltd. v Indust Cityscapes Constructions Pvt. Ltd., [2018]143CLA66 ,MANU/NL/0002/2018. . . 69, 172 Keltech Infrastructure Ltd. v Aaj Finance & Credit Ltd., Company Appeal (AT) (Insolvency) No. 580 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . 15, 30 Kirusa Software Private Ltd. v Mobilox Innovations Private Ltd., [2017] 203 Comp Cas 33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Krishna Enterprises v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 144 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 169 Krishna Kraftex Pvt. Ltd. v HDFC Bank & Ors, [2018]146SCL72, MANU/NL/0005/2018 . . . . . . . . . . . . . . . . . . . . . . 75, 193, 210, 215, 217, 548 Lakshmi Apparels and Wovens Limited, CA/122/IB/2017, TCP/262/(IB)/2017, NCLT, Chennai Bench. . . . . . . . . . . . . . . . . . . . . . . . . 273 Laqshya Media Pvt Ltd v Hover Automotive India Pvt Ltd, TCP No. 646/(MAH)/2017, Mumbai Bench (I). . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Larsen & Toubro Ltd. v Bhushan Steel Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 233 of 2018 . . . . . . . . . . . . . . . . . . 298, 300, 301 Leo Edibles and Fats Limited v Tax Recovery Officer (Central), Income Tax Department and Ors., [2018] 407 ITR 369 (AP), MANU/AP/0426/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339, 354, 355 Leo Edibles and Fats Limited v Tax Recovery Officer (Central), Income Tax Department and Ors., 2018 (4) ALT 700, MANU/ NULL/0023/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352 Levcon Valves (P) Ltd v Energo Engineering Projects Limited, [2017] 143 SCL7 35.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153, 166 Logvis AG v Quinn Logistics India Ltd., Company Appeal (AT) (Insolvency) No. 175 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 29, 253 Lokhandwala Kataria Construction Pvt Ltd v Nisus Finance & Investment Manager LLP, [2017] 140 CLA 215 : I (2018) BC 66 . . . . . . . . 108 Lokhandwala Kataria Construction Pvt Ltd v Nisus Finance & Investment Manager LLP, [2018] 142 CLA 37 (SC). . . . . . . . . . . . . . . . . . . 109

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Case Digest on Insolvency and Bankruptcy Code, 2016

Lokhandwala Kataria Construction Pvt. Ltd. v Nisus Finance & Investment Manager LLP, Company Appeal (AT) (Insolvency) No 95 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 M Y Agro Private Limited v Amira Pure Foods Private Limited (NCLT – New Delhi Bench II), IB No. (IB) – 211(ND)/2017. . . . . . . . . . . . . 39 Mack Soft Tech Pvt. Ltd. v Quinn Logistics India Ltd., Company Appeal (AT) (Insolvency) No. 143 of 2017 . . . . . . . . . . . . . . . . . . . . 14, 29, 253 Macquarie Bank Limited v Shilpi Cable Technologies Ltd, AIR 2018 SC 498 , (2018) 2 SCC 674 , 2017 (14) SCALE 509.. . . . . . . 128, 132, 155 Macquarie Bank Limited v Shilpi Cable Technologies Ltd., AIR 2018 SC 498, 2018 2 AWC 1277 SC, 2018 (3) ALD 87, I (2018) BC 219 (SC), 2018 (2) BomCR 212, (2018)1CompLJ 270 (SC), [2018] 142 CLA 1 (SC), (2018) 2 MLJ 552, MANU/ SC/1609/2017, 2018 (1) RCR (Civil) 472, [2018] 145 SCL 236 (SC), 2017 (14) SCALE 509, (2018) 2 SCC 674, 2018 (1) SCJ 646 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138, 148, 167, 168, 170, 181 Macquarie Bank Limited v Uttam Galva Metallics Limited, III (2017) BC 10, [2017] 140 CLA 27, MANU/NL/0048/2017, [2017] 143 SCL 214 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Macro Leafin Private Limited v Arrow Resources Limited, CA No. 259(PB) 2017, CP No. (IB)-152(PB) 2017, Principal Bench NCLT. . . . 252 Macro Leafin Pvt Ltd v Arrow Resources Ltd., (IB) 152 (PB)/2017, Principal Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273 Madhusudan Gordhandas & Co v Madhu Wollen Industries Pvt Ltd, AIR 2017 SC 4532 , (2018) 1 SCC 353 , 2017 (11) SCALE 754.. . . . . . 133 Madhya Gujrat Vij Company Ltd. v Kalptaru Alloys Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 211 of 2018. . . . . 310, 318, 515 Mahendra Trading Co. & Others v. Hindustan Controls & Equipment Private Limited, CP (IB) No. 646/KB/2017, Kolkata Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 Mahesh Kumar Panwar v Neelam Singh & Anr., ([2018] 148 SCL 135, MANU/NL/0056/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Mahesh Kumar Panwar v Neelam Singh & Anr., NCLAT Company Appeal (AT) (Insolvency) No. 185 of 2017 . . . . . . . . . . . . . . . . . . 45 Mahesh Kumar Sureka v SBER Bank & Ors., (2018)208CompCas21, (2018)3CompLJ205, (2018)144CLA339, MANU/NL/0063/2018. . . . . . . . . . . . . 14, 29, 81, 179, 387 Mamatha v AMB Infrabuild Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 155 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Marg Limited v Tata Capital Financial Services Ltd., (Company Appeal (AT) (Insolvency) No. 219 of 2018). . . . . . . . . . . . . . . . . 15, 30, 71, 101 clxxx

Table of cases

MCL Global Steel Pvt. Ltd. & Anr. v Essar Projects India Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 29 of 2017, NCLAT. . . . . . 150 Mecon FZE v Quinn Logistics India Ltd., Company Appeal (AT) (Insolvency) No. 176 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 29, 254 Meyer Apparel Ltd. & Anr. v Surbhi Body Products Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 33 of 2017. . . . . . . . . . . 87, 171 Mobilox Innovations Private Limited v Kirusa Software Private Limited, AIR 2017 SC 4532, 2017 6 AWC 5658 SC, IV (2017) BC 445 (SC), [2017] 205 CompCas 324 (SC), (2017) 4 CompLJ 255 (SC), [2017] 140 CLA 123 (SC), [2017] 140 CLA 123 (SC), MANU/SC/1196/2017, 2018 (1) RCR (Civil) 725, [2017] 144 SCL 37 (SC), 2017 (11) SCALE 754, (2018) 1 SCC 353, 2017(9) SCJ 300. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28, 31, 32, 34, 35, 127, 133, 134, 135, 138, 140, 141, 153, 164, 168, 177, 188 Mother Pride Dairy India Private Limited v Portrait Advertising & Marketing Private Limited, NCLAT, Company Appeal (AT) (Insolvency) No. 94 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Musaddi Lal Kishan Lal v Ram Dev Int Ltd, (IB) 178(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67, 122, 151 MY Agro Pvt Ltd NCLAT v Amira Pure Foods Pvt Ltd., CP No. 211/ND/2017, New Delhi Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 Nandhitha Vedam v Udhyaman Investments Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 166 of 2018 . . . . . . . . . . . . . . 82, 182 Naresh Hansrajmal Bulchandani v Deep Constructions Co. & Anr., (Company Appeal (AT) (Insolvency) No. 70 of 2018). . . . . . . . . . . . 143 Naresh Kumar & Co. Pvt. Ltd. v Kalyanpur Cements Ltd., CP(IB) No. 168/KB/2017, Kolkata Bench NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 Narindra & Narindra Steel Corporation v Isolux Corsan India Engineering & Construction Pvt Ltd, CP (IB) NO. 69/Chd/ Hry/2017, Chandigarh Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 National Engineering Industries Ltd. v Cimmco Birla Ltd, Company Appeal (AT) (Insolvency) No. 151 of 2018;. . . . . . . . . . . . . . . . . 376 Navbharat Castings LLP v Moser Baer India Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 323 of 2018 . . . . . . . . . . . . . 244, 378 Naveen Luthra & Ors. v Bell Finvest (India) Ltd. & Anr., [2019]148CLA70, MANU/NL/0298/2018. . . . . . . . . . . . . . . . . . . . . . . . 86, 185 Nayan Shah v Viral Rajarashi Mehta & Anr., Company Appeal (AT) (Insolvency) No. 307 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 30, 182 Neeraj Bhatia v Davinder Ahluwalia and Ors., MANU/ NL/0018/2018, [2018]146SCL305, [2018]146SCL305. . . . . . . . . . . . . . . . . 142

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Case Digest on Insolvency and Bankruptcy Code,Â 2016

Neeraj Singal v Bhushan Steel Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 221 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . 298, 300, 301 Neesa Leisure Limited, Ahmedabad v Asset Reconstruction Company Limited, Company Appeals (AT) (Insolvency) Nos. 62 & 63 of 2018, MANU/NL/0115/2018. . . . . . . . . . . . . . . . . . . . 193, 215, 548 Neeta Chemicals (I) Pvt. Ltd. v State Bank of India, (III(2018) BC120, MANU/NL/0051/2018); . . . . . . . . . . . . . . 75, 210, 211, 217, 385, 514 Neeta Chemicals (I) Pvt. Ltd. v State Bank of India, Company Appeal (AT) (Insolvency) No. 174 of 2017 , NCLAT . . . . . . . . . . . . . . . . . . 198 Neeta Chemicals, NCLT Hyderabad Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 Nicco Corporation Ltd, Re, CA(IB) No 29/KB/2018, CP (IB) No 03/KB/2017, NCLT, Kolkata Bench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336 Nicco Corporation Ltd, Re, CP No 03/KB/2017, NCLT, Kolkata Bench. . . . . 328 Nikhil Mehta & Sons v AMR Infrastructure Ltd., ([2017]143SCL278, MANU/NL/0041/2017, [2017]141CLA281, III(2017)BC61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 48 Nikhil Mehta and Sons v AMR Infrastructure Ltd, NCLAT, Company Appeal (AT) (Insolvency) No. 07 of 2017 . . . . . . . . . . 8, 41, 44, 123 Nityank Infrapower & Multiventures Pvt. Ltd. v Invex Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 499 of 2018. . . . . . . . . . 86, 387 Om Industrial Corporation v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 145 of 2018 . . . . . . . . . . . . . . . . . . . . . . . 10, 169 Om Shivay Real Estate Pvt Ltd v Advantage Projects & Consultants, CP No IB 112/(PB)/2017, NCLT, Principal Bench. . . . . . . . . 324 One Coat Plaster and Shivam Construction Company v Ambience Private Ltd, CP (1B) No. 07/PB/2017 and CP (1B) No. 08/PB/2017, Principal Bench NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 ONGC Employees Contributory Fund Trust, CP No. (IB)/89/ ALD/2017, Allahabad Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . 103, 205 Orissa Sales v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 147 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 P.K. Ores Private Limited v Tractors India Private Limited, Company Appeal (AT) (Insolvency) No. 56 of 2017, NCLAT. . . . . . . . . . . 150 Paharpur Cooling Towers Limited v Dalmia Cement (Bharat) Limited, Company Appeal (AT) (Insol.) No. 127 of 2017 . . . . . . . . . . . 69, 172 Palogix Infrastructure Private Limited v ICICI Bank Limited, (2018)3CompLJ97, II(2018)BC32, [2017]141CLA83, MANU/ NL/0095/2017, [2017]144SCL319. . 27, 67, 81, 90, 91,107, 122, 179, 205, 387 Pankaj Yadav & Anr. v State Bank of India Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 28 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

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Table of cases

Paramjeet Singh v Maxim Tubes Company Pvt. Ltd., NCLAT in Company Appeal (AT) (Insolvency) No. 150 of 2017 . . . . . . . . . . . . . . . . . . 41 Parmod Yadav v Divine Infracon Pvt Ltd, NCLT, New Delhi, No. IB-209/ND/2017, Bench III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58, 60, 181 Pawan Dubey v M/s JBK Developers Private Limited, Civil Appeal No. 11197 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 128 PCK Buderus (India) Special Steel Pvt. Ltd. v Sungil India Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 311 of 2017. . . . . . . . . 138, 168 PEC Ltd v M/s Sree Ramakrishna Alloys Ltd, Company Appeal (AT) (Insolvency) No. 225 of 2017, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . . . 111 Peerless Financial Services Ltd v Rasoya Proteins Ltd, MA 676/2017, CP 8561I&BP 2017, Mumbai Bench NCLT. . . . . . . . . . . . . . . . . 221 Philips India Limited v Goodwill Hospital & Research Centre Ltd., [2017] 139 CLA 208, [2017] 142 SCL 208. . . . . . . . . . . . . . . . . . . . . . . . 32 Phoenix Arc Private Limited v Sarbat Cotfab Private Limited, CP (IB) No.123/Chd/CHD/2017, Chandigarh Bench NCLT . . . . . . . . . . . . . . 114 Power Mech Projects Ltd. v Savan Godiawala, R.P./Liquidator for Lanco Infratech Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 620 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302 Pr. Commissioner of Income Tax v Monnet Ispat and Energy Ltd. . . . . . . . . 512 Pr. Commissioner of Income-tax-7 v Modern Terry Towels Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 192 of 2018. . . . . . . . . . . . . 376 Pr. Director General of Income Tax (Admn. & TPS) v Spartek Ceramics India Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 160 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376 Prajna Prakash Nayak v ASAP Info Systems Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 196 of 2018 . . . . . . . . . . . . . . . . . 144 Praveen Arjun Patel v JK Lakshmi Cement Ltd. And in the matter of Haryana Construction (I.A. No. 1140 of 2018 In Company Appeal (AT) (Insolvency) No. 264 of 2018). . . . . . . . . . . . . . . . . . . . . . . . . . 225 Praveen Arjun Patel v JK Lakshmi Cement Ltd. And in the matter of Ved Contracts Private Ltd. (I.A. No. 1141 of 2018 In Company Appeal (AT) (Insolvency) No. 264 of 2018). . . . . . . . . . . . . . . . . 225 Praveen Arjun Patel v JK Lakshmi Cement Ltd. And in the matter of Space Height Structures Pvt. Ltd. (I.A. No. 1142 of 2018 In Company Appeal (AT) (Insolvency) No. 264 of 2018). . . . . . . . . . . . . . . . . 225 Prime Cars Pvt Ltd v Reliance Capital finance Ltd, NCLAT, Company Appeal (AT) (Insolvency) No. 196 of 2017 . . . . . . . . . . . . . . . . . 121 Prime Cars Pvt Ltd v Reliance Commercial Finance Ltd, Supreme Court, Civil Appeal No. 15473 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

clxxxiii

Case Digest on Insolvency and Bankruptcy Code,Â 2016

Prowess International Private Limited v Action Ispat & Power Private Limited, Company Appeal (AT) (Insolvency) No. 223 of 2017, MANU/NL/0058/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 Punjab National Bank v Concord Hospitality Private Limited, CP(IB) No. 43/CHD/PB/2017, NCLT Chandigarh Bench. . . . . . . . . . . . . . . 64 Punjab National Bank v Divyajyoti Sponge Iron Pvt. Ltd., CA (IB) No. 570/KB/2017, NCLT, Kolkata Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . 266 Quantum Limited (Corporate Debtor) v Indus Finance Corporation Limited, Company Appeal (AT)(Insolvency) No. 35 of 2018, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 Quantum Limited v Indus Finance Corporation Limited, IV(2018)BC1, [2018]144CLA157, MANU/NL/0024/2018]. . . . . . . . . . . . . 222 Quinn Logistics India Pvt. Ltd. v Mack Soft Tech Pvt. Ltd., Mohd. Sabir Parvez, Mr. M.L. Jain, (Resolution Professional), Company Appeal (AT) (Insolvency) No. 185 of 2018, NCLAT. . . . . . . . . . 220 R G Shaw and Sons Pvt Ltd v Naviplast Traders Private Limited, Company Appeal (AT) (Insolvency) No. 63 of 2017, NCLAT. . . . . 98, 99, 115 R P Goel v Samtel Colors Ltd, CP No. (IB)-145(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147, 213 R. Sridharan v Assets Care & Reconstruction Enterprise Ltd., (ACRE) (IV(2018)BC157, MANU/NL/0169/2018). . . . . . . . . . . . . . . . . . . . 15 Radius Infratel Pvt. Ltd. v Union Bank of India, Company Appeal (AT) (Insolvency) No. 535 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 Rahul Gupta v Mahesh Madhavan & Anr., III(2018)BC66, MANU/NL/0101/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Raj Builders v Raj Oil Mills Limited & Anr., Company Appeal (AT) (Insolvency) No. 304 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 Raj Steels v Sanjay Strips Pvt Ltd, Re, CP (IB)No. 218/9/ HDB/2017, Hyderabad Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Rajeev K Aggarwal v Panipat Texo Fabs Pvt. Ltd., [2019]151SCL279, [2019]151SCL279, MANU/NL/0293/2018. . . . . . . . . 185 Rajendra K. Bhuta, Resolution Professional (For Guruashish Construction Private Limited) v Maharashtra Housing and Area Development Authority (Company Appeal (AT) (Insolvency) No. 119 of 2018). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 Rajendra Kumar Saxena v Earth Gracia Buildcon Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 187 of 2018 . . . . . . . . . . . . . . . . . . 48 Rajinder Kapoor v Anil Kumar (Interim Resolution Professional), Company Appeal (AT) (Insolvency) No. 198 of 2017; Ashwini Kumar Prabhakar v Anil Kumar, Interim Resolution Professional, Company Appeal (AT) (Insolvency) No. 200 of 2017. . . . . . 287 clxxxiv

Table of cases

Rajit Mehra v Punjab National Bank & Anr., Company Appeal (AT) (Insolvency) No. 102 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Rajnish Gupta v Small Industrial Development Bank of India, Company Appeal (AT) (Insolvency) No. 126 of 2018 . . . . . . . . . . 81, 179, 387 Raman Ispat Private Limited, Re, CA No. 191/2017 ,CP (IB) No. 23/ALD/2017, Allahabad Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 Ramchandra D Chaudhary RP v Radheshyam Fibres Pvt Ltd, NCLT, Ahmedabad Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325 Ramesh Chander Gupta v Punjab National Bank, Company Appeal (AT) (Insolvency) No. 179 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Ramubhai S Patel RP v Rajkot Nagrik Sahakari Bank Ltd, IA 376/2017, CP(IB) No 23/10/NCLT/AHM/2017, Ahmedabad Bench . . . . 326 Rave Scans Pvt. Ltd., Re, Principal Bench, IB 01(PB)/2017. . . . . . . . . . . . . . . 228 Recorders and Medicare Systems Private Limited, Re, CA No. 140/2107 in CP(IB) No. 7/Chd/Hry/2017, Chandigarh Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218, 232 REI Agro Limited, Re, I.T.A. No. 1919/KOL/2012, Kolkata Bench, NCLT. . . 223 Reliance Commercial Finance Limited v Prime Cars Private Limited, C.P. (IB) No. 87/7/NCLT/AHM/2017, NCLT, Ahmedabad Bench.71 Reliance Commercial Limited v Varaha Infra Ltd., (IB) 191(PB)/2017 . . . . . 121 Rely Paints Pvt. Ltd. v BSL Scaffolding Ltd., Company Appeal (AT) (Insolvency) No. 547 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144, 184 Renaissance Steel India Pvt. Ltd. v Electrosteel Steels Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 223 of 2018 . . . . . . . . . 298, 300, 301 Renaissance Steel India Pvt. Ltd. v Electrosteel Steels Ltd., Company Appeal (AT) (Insolvency) No. 175 of 2018 . . . . . . . . . 298, 300, 301 Roofit Industries Ltd, Re, MA 70, CP 1055/I&BP/2017, NCLT, Mumbai Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 Ruby Cables Ltd v Bank of Baroda, Ahmedabad Bench, NCLT . . . . . . . . . . . 206 Rural Electrification Corporation Ltd. v Ferro Alloys Corporation Ltd., CP(IB)No. 251/KB/2017 , Kolkata Bench, NCLT. . . . . . . . . . . . . . . . . 224 Rural Electrification Corporation Ltd. v Ferro Alloys Corporation Ltd., CP(IB) No. 251/KB/2017, NCLT Kolkata Bench . . . . . . . . . . . . . . . . . 303 S R Constructions v International Recreation & Amusement Ltd, (IB) 68(PB)/2017, NCLT, Principal Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . 253 S. Ravi. Srinivas v Super Agri Seeds Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 124 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . 308 Sacrato Capital Pvt. Ltd. v Anil Ltd., MANU/NC/0870/2017. . . . . . . . . . . . . . 97 Sandeep Kumar Gupta Resolution Professional v Stewarts & Lloyds of India Ltd, Company Appeal (AT) (Insolvency) No.

clxxxv

Case Digest on Insolvency and Bankruptcy Code,Â 2016

263 of 2017 , Company Appeal (AT) (Insolvency) No. 303 of 2017, NCLAT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333 Sandeep Kumar Gupta, Resolution Professional v Stewarts & Lloyds of India Ltd. & Anr., [2018]144CLA161, [2018]146SCL591, MANU/NL/0026/2018. . . . . . . . . . . . . . . . . . . . . . . . . . 332 Sanjay Kewalramani v Sunil Parmanand Kewalramani & Ors., [2018]209CompCas331, MANU/NL/0150/2018. . . . . . . . . . . . . . . . . . . . . . 46 Sanjeev Shriya and Ors. v State Bank of India and Ors., 2017(9) ADJ723: 2018(2) ALJ 769, 2017 (125) ALR 430, 2017 5 AWC4788All, III(2018)BC352(All.), [2017]141CLA305(All): MANU/UP/2243/2017, [2017]144SCL545(All). . . . . . . . . . . . . . 119, 315, 321 Sarthak Creations, Ahmedabad Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . 206 SBI (Stressed Assets Management Branch) v Shri Maharaja Oil Imports & Exports India Pvt Ltd & IOB, CA/26&27/IB/2017 In CP/531/(IB)/CB/2017, Chennai Bench, NCLT . . . . . . . . . . . . . . . . . . . . 263 SBI v Monnet Ispat & Energy Ltd, MA No.47012017, Mumbai Bench, NCLT, CP No. ll39 I&BP/NCLT/MB/MAH/2017 . . . . . . . . . . . 54, 235 Seema Gupta v Supreme Infrastructure India Ltd. & Ors., Company Appeals (AT) (Insolvency) No. 53 of 2017. . . . . . . . . . . . . . . . . 139 SEL Manufacturing Company Ltd. and Ors. v Union of India and Ors., MANU/PH/0442/2018, [2018] 147 SCL 426 (Punj&Har)). . . . 368, 373 Shah Brothers Ispat Pvt. Ltd. v P. Mohanraj & Ors., Company Appeal (AT) (Insolvency) No. 306 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . 246 Shaw Traders v Balaji Paper & Newsprint Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 314 of 2017). . . . . . . . . . . . . . . . . . . . . . 138, 168 Shivarad Polyfab v OLAM Agro Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 261 of 2017, MANU/NL/0014/2018. . . . . . . . . . . . . . . . . 175 Shree Bhawani Paper Mills Pvt Ltd, Re, C.P. (IB) No. 110/ ALD/2017, Allahabad Bench, NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 Shreyans Realtors Private Limited & Anr. v Saroj Realtors & Developers Private Limited, Company Appeal (AT) (Insolvency) No. 311 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Shri Ram Residency Private Limited v Kuldeep Verma, designated as Resolution Professional, Jalan Intercontinental Private Limited & Ors., Company Appeal (AT) (Insolvency) No. 202 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307 SICOM Limited v Alok Employees Benefits and Welfare Trust & Ors., Company Appeal (AT) (Insolvency) No. 344 of 2018. . . . . . . . . . . . . 311 Siddharth Nahata v Billets Elektro Werke Pvt Ltd, [2018] 145 SCL 146 . . . . 164 Siddhi Interiors Private Limited v Amarpali Zodiac Developers Private Limited, CP (IB) 238 (PB)/2017, Principal Bench NCLT. . . . . . . . . 155 clxxxvi

Table of cases

Siddhi Interiors Private Limited v Hi Tech City Developers Private Limited, CP (IB) 310 (ND)/2017 Principal Bench NCLT . . . . . . . . 155 Simplex Infrastructures Limited v Agrante Infra Limited, New Delhi Bench II, NCLT, IB No. (IB), 167(ND)/2017 . . . . . . . . . . . . . . . . . . . . . 38 Sky Blue Papers Private Limited, Re, CA No. 154/2017, CP No. IB No. 09/Chd/CHD/2017, Chandigarh Bench, NCLT . . . . . . . . . . . . . . . . . . 219 Software One India Private Limited v Emkor Solutions Limited, IB 253 (ND)/2017, New Delhi Bench II, NCLT. . . . . . . . . . . . . . . . . . . . . . . 153 Somesh Bagchi & Ors. v Nicco Corporation Ltd. through Liquidator, Company Appeal (AT) (Insolvency) No. 209 of 2018 . . . 356, 377 SR Constructions v International Recreation & Amusement Ltd, Principal Bench, (IB) 68(PB)/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 SR Polyfab Private Limited v Sadbhav Enterprises Private Limited, Ahmedabad, NCLT, CP(IB) No. 115/7/NCLT/AHM/2017 . . . 31, 45 Sree Metaliks Limited and Ors. v Union of India and Ors., [2017] 203 CompCas 442 (Cal) : [2017] 140 CLA 30 (Cal) : MANU/ WB/0236/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 SREI Equipment Finance Ltd v Wianxx Impex Pvt Ltd, (IB) 27(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 67, 122 SREI Infrastructure Finance Ltd. v Canara Bank & Ors., [2018]145CLA315, MANU/NL/0163/2018. . . . . . . . . . . . . . . . . . . . . . . . . . 280 Sri Vinayaka Paper & Boards Ltd v Union Bank of India, C.P. (IB) No. 173/10/HBD/2017 , Hyderabad Bench, NCLT . . . . . . . . . . . . . . . . . . . 194 Standard Chartered Bank v Essar Steel India Limited, [2017] 143 SCL 580 (Guj) , [2017] 141 CLA 45 (Guj). . . . . . . . . . . . . . . . . . . . . . . 103, 117 State Bank of India v Bhushan Steel Limited, C.P. No. IB201(PB)/2017, Principal Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 State Bank of India v Bhushan Steel Limited, Principal Bench, NCLT, C.P. No. IB-201(PB)/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 State Bank of India v Debashish Nanda, Company Appeal (at) (Insolvency) No. 49 0f 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 State Bank of India v Essar Steels Limited, CP (IB) No. 40/7/ NCLT/AHM/2017, NCLT Ahmedabad Bench . . . . . . . . . . . . . . . . . . . . . . . . 92 State Bank of India v Monnet Ispat and Energy Limited, MA 5252/2017, CP No. 1139/I&B/2017 Mumbai Bench, NCLT. . . . . . . . . . . . 228 State Bank of India v Orissa Manganese & Minerals Ltd., CA(IB) No. 134/KB/2018, CP(IB) No. 371/KB2017, NCLT Kolkata Bench. . . . . . . 267 State Bank of India v Radheyshyam Fibres Private Limited, CP (IB) No. 51/7/NCLT/AHM/2017, NCLT, Ahmedabad Bench. . . . . . . . . . . 114 State Bank of India v Ram Dev International Ltd., Company Appeal (AT) (Insolvency) No. 302 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . 275 clxxxvii

Case Digest on Insolvency and Bankruptcy Code,Â 2016

State Bank of India v Shakti Bhog Foods Limited (Company Appeal (AT) (Insolvency) No. 83 of 2018, MANU/ NL/0041/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76, 174, 546 State Bank of India v SKC Retails Ltd. through IRP & Anr., [2018]210CompCas69, [2018]144CLA324, MANU/ NL/0033/2018, [2018]147SCL422;. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78, 176 State Bank of India v Tech Megacorp International Pvt. Ltd. through IRP & Anr., Company Appeal (AT) (Insolvency) No. 09 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78, 176 State Bank of India v V. Ramakrishnan and Ors., AIR 2018 SC 3876, 2018 (6) ABR 42, 2018 (5) ALD 162, III (2018) BC 593 (SC), [2018] 210 CompCas 364 (SC), (2018) 4 Comp LJ 48 (SC), [2018] 145 CLA 447 (SC), 2018 (4) MPLJ 23, 2018 (5) MhLJ 692, MANU/SC/0849/2018, 2018 (4) RCR (Civil) 110, [2018] 149 SCL 107 (SC), 2018 (9) SCALE 597, 2018 (7) SCJ 632 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 236, 241, 244, 314, 366, 367, 418, 423 Steel Konnect (India) Private Limited v Hero Fincorp Limited, Company Appeal (AT) (Insolvency) No. 51 of 2017 . . . . . . . . . . . . . . . . . . 257 Subasri Realty Private Limited v N. Subramaniam & Anr., (Company Appeal (AT)(Insolvency) No. 290 of 2017) . . . . . . . . . . . . . . . . . 71 Subodh Bajrang Lal Kedia v Anil Nutrients Ltd, CP (I.B) No. 65/7/NCLT/AHM/2017, Ahmedabad Bench, NCLT. . . . . . . . . . . . . . . 52, 264 Subodh Kumar Agarwal v EIH Limited, Company Appeal (AT) (Insolvency) No. 483 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282 Subodha Entertainments Co Ltd v Jackonblock Facility Services Pvt Ltd, CP(IB)No. 6/BB/17, NCLT Bengaluru Bench. . . . . . . . . . . . . . . . . 278 Sudhi Sachdev v APPL Industries Ltd., Company Appeal (AT) (Insolvency) No. 623 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Sudhir Power Projects Ltd v Rites Ltd, (IB) 312(PB)/201 Principal Bench . . 158 Sunil Kumar Agarwal v Allahabad Bank & Ors., Company Appeal (AT) (Insolvency) No. 388 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . 276 Sunline Suppliers Private Limited v Infinity Fab Engineering Company Private Limited, Bengaluru Bench, NCLT, CP (IB) No. 03/BB/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33, 36, 37 Sunrise 14 A/S Denmark v Ravi Mahajan, [2018] 146 CLA 239 (SC), MANU/SC/1052/2018, [2018] 149 SCL 227 (SC) . . . . . . . 138, 167, 168 Sunrise 14 A/S, Denmark v Muskaan Power Infrastructure Ltd, CA No.150/2017 IN CP (IB) No. 39/Chd/Pb/2017, NCLT, Chandigarh Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264 Supreme Infrastructure India Ltd v Ramaprastha Promoters & Developers Pvt Ltd, CP (IB) No.137/Chd/Hry/2017, Chandigarh Bench.152 clxxxviii

Table of cases

Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd. and Ors., AIR 2018 SC 186, 2018 (2) ABR 324, 2018 (1) AKR 663, 2018 (4) ALLMR 462, [2017] 205 CompCas 119 (SC), (2018) 1 CompLJ 217(SC), [2017] 141 CLA 174 (SC), 2018-1-LW813, MANU/SC/1248/2017, [2017] 144 SCL 198 (SC), (2017) 16 SCC 143 . . . . . . . . . . . . . . . . . . . 73, 98, 99, 104, 106, 162, 163 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd., Company Appeal (AT) (Insolvency) No. 189 of 2018) . . . 169 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Ltd. and Ors., AIR 2018 SC 186, 2018 (2) ABR 324, 2018 (1) AKR 663, 2018 (4) ALLMR 462, [2017] 205 CompCas 119 (SC), (2018) 1 CompLJ 217(SC), [2017] 141 CLA 174 (SC), 2018 1 LW813, MANU/SC/1248/2017, [2017] 144 SCL 198 (SC), (2017) 16 SCC 143 . . . . . . . . . . . . . . . . . . . . 171, 200, 201, 203, 204, 208 Surendra Trading Company v Juggilal Kamlapat Jute Mills Company Limited, CA No 8400 of 2017 , CA Nos. 15091-15091 of 2017, , Supreme Court of India. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384 Suresh Chand Garg v Aditya Birla Finance Ltd., Company Appeal (AT) (Insolvency) No. 130 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . 247 Swastik Enterprises v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 146 of 2018; Orissa Sales v Gammon India Ltd., Company Appeal (AT) (Insolvency) No. 147 of 2018. . . . . 10, 169 Tarini Steel Company Pvt. Ltd. v Trinity Auto Components Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 75 of 2018, MANU/NL/0040/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 Tata Capital Financial Ltd. v Svogi Oil Gas and Energy Ltd., (IB) 109(PB)/2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Tayo Rolls Limited, CP(IB)No. 398/KB/2017, Kolkata Bench NCLT . . . . . . . 207 Tommorrows Sales Agency Pvt. Ltd. v Rajiv Khurana, R.P. for Power Himalayas Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 162 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302 Transparent Technologies Pvt Ltd v Multi Trade, NCLAT, Company Appeal (AT) (Insolvency) No. 207 of 2017 . . . . . . . . . . . . . . . . . 159 Tryst Industries Private Limited v Billets Elektro Werke Private Limited (NCLAT), Company Appeal (AT) (Insolvency) No. 199 of 2017. . 38 UCO Bank in the matter of Nicco Corporation Ltd, CA (IB) No 31/KB/2018, CP (IB) No. 03/KB/2017, NCLT, Kolkata Bench . . . . . . . . . . 343 Ultra Drytech Engineering Ltd, MA 677A/2O17, CP NO 29/I&AP/NCLT/MAH | 2O17, NCLT, Mumbai Bench. . . . . . . . . . . . . . . . 323 Unigreen Global Private Limited v Punjab National Bank & Anr., Company Appeal (AT) (Insolvency) No. 81 of 2017, NCLAT. . . . . . . . . . . 211 clxxxix

Case Digest on Insolvency and Bankruptcy Code,Â 2016

Unigreen Global Private Limited v Punjab National Bank & Ors., II(2018)BC132, [2018]142CLA131, MANU/NL/0192/2017, [2018]145SCL272. . . . . . . . 69, 74, 191, 193, 209, 210, 215, 217, 385, 513, 548 Unimark Remedies Ltd. v Ashok Alco Chem Ltd., (Company Appeal (AT) (Insolvency) No. 45 of 2017). . . . . . . . . . . . . . . . . . . . 88, 170, 195 Union Bank of India v Era Infra Engineering Ltd., (IB) 190(PB)/2017. . . . . . 121 United Motors Heavy Equipment Private Limited v Sundaram Industries Private Limited, NCLAT , Company Appeal (AT) (Insolvency) No. 118 of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40, 136 United Seamless Tabulaar Pvt. Ltd. v Kamineni Steel & Power India Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 23 of 2018, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271, 308 Uttam Galva Metallics Ltd. v State Bank of India, Company Appeal (AT) (Insolvency) No. 315 of 201;. . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Uttam Galva Steels Limited v DF Deutche Forfait AG and Ors., I (2018) BC 1, [2017] 204 CompCas 511, [2017] 140 CLA 36, MANU/NL/0050/2017, [2017] 143 SCL 318. . . . . . . . . . . . . . . . . . . . . 129, 167 Uttam Galva Steels Limited v DF Deutsche Forfait, Company Appeal (AT) (Insolvency) 39 of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Uttam Value Steels Ltd. v State Bank of India, Company Appeal (AT) (Insolvency) No. 316 of 2018.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Uttara Foods and Feeds Private Limited v Mona Pharmachem, [2017] 141 CLA 253 (SC), 2017 (13) SCALE 526. . . . . . . . . . . . . . . . . . . . . 110 Uttarakhand Power Corporation Ltd. v ANG Industries Ltd., Company Appeal (AT) (Insolvency) No. 298 of 2017 . . . . . . . . . . . . . . . . . 175 V Ramakrishnan v Vee Energy Systems Private Limited & State Bank of India, [2017] 144 SCL 94. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 V. Nagarajan Resolution Professional v Meenakshi Energy Ltd., MANU/NL/0069/2018, [2018]146SCL224. . . . . . . . . . . . . . . . . . . . . . . . . . 244 V. R. Hemantraj v Stanbic Bank Ghana Ltd. & Anr., IV (2018) BC 143, [2018] 210 CompCas 516, [2018] 147 CLA 35, MANU/ NL/0265/2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 30, 84 V. V. Nagarajan v Vishnusudha Textiles & Anr., III(2018)BC61, MANU/NL/0091/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 Vaman Fabrics Private Limited v Punjab National Bank and Anr., Company Appeal (AT) (Insolvency) No. 212 of 2018, NCLAT. . . . . . . . . . 199 Vertiv Energy Private Limited v Techpro Systems Limited, Principal Bench, CP No. (IB)-155(PB)/2017, NCLT. . . . . . . . . . . . . . . . . . . 213 Vesuvius India Ltd v Fenace Auto Ltd, IB 364/(ND)/2017, New Delhi II Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

cxc

Table of cases

Vidul Sharma v Technopak Advisors Pvt. Ltd., (NCLAT), Company Appeal (AT) (Insol.) No. 131 of 201. . . . . . . . . . . . . . . . . . . . . . . . 17 Vijay Kumar Jain v DBS Bank Limited, Company Appeal (AT) (Insolvency) No. 24 of 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Vijay Kumar Jain v Standard Chartered Bank Ltd., [2018]146CLA211, MANU/NL/0199/2018. . . . . . . . . . . . . . . . . . . . . . . . . . 316 Vijay Kumar Jain v Standard Chartered Bank Ltd., Company Appeal (AT) (Insolvency) No. 52 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Vijay Nirman Company Private Limited v Ksheeraabd Constructions Private Limited, Hyderabad Bench, NCLT, CP(IB) No. 100/9/HDB/2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Vivek Vijay Gupta v Steel Konnect (India) Pvt. Ltd. & Ors., IA 9/2018, C.P. (I.B) No. 5/7/NCLT/AHM/2017, NCLT, Ahmedabad Bench.319 VNR Infra Metal Pvt Ltd, Re, CP(IB) No. 13/10/HDB/2017, Hyderabad Bench, NCLT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261 VNR Infrastructures Ltd, Re, CP No 12/10/HDB/2017, NCLT, Hyderabad Bench. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337 Xionn v Aman Hospitality Pvt. Ltd., CP 1050/2016 , Principal Bench NCLT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Yogendra Yasupal v Jigsaw Solutions and another, NCLAT, Company Appeal (AT) (Insolvency) No. 222 of 2017 . . . . . . . . . . . . . . . . . . 40 Zapp India Ltd. v Maheshwar Textile, Company Appeal (AT) (Insolvency) No. 314 of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 Z-Tronics Infratel Private Limited v M/s Wipro Enterprises Private Limited, CP(IB) No. 18/BB/2017, Bengaluru Bench NCLT . . . . . . 186 LIST OF IBBI ORDERS IBBI Order dated 12 October 2017.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 492 IBBI Order dated 14 November 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491, 493 IBBI Order dated 26 February 2018.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490

cxci

PART I

Preliminary SECTION 1 1.

Short title, extent and commencement

(1)

This Code may be called the Insolvency and Bankruptcy Code, 2016.

(2)

It extends to the whole of India: Provided that Part III of this Code shall not extend to the State of Jammu and Kashmir.

(3)

It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint: Provided that different dates may be appointed for different provisions of this Code and any reference in any such provision to the commencement of this Code shall be construed as a reference to the commencement of that provision.

SECTION 2 2.

Application[*1,*2]

The provisions of this Code shall apply toâ&#x20AC;&#x201D; (a)

any company incorporated under the Companies Act, 2013 (18 of 2013) (or under any previous company law;

(b)

any other company governed by any special Act for the time being in force, except in so far as the said provisions are inconsistent with the provisions of such special Act;

(c)

any Limited Liability Partnership incorporated under the Limited Liability Partnership Act, 2008 (6 of 2009);

w.e.f. 1-12-2016, clause (a) to clause (d) of section 2 (except with regard to voluntary liquidation or Bankruptcy) vide SO 3594 (E), dt. 30-11-2016.

w.e.f. 1-04-2017, clauses (a)-(d) of section 2 relating to voluntary liquidation or bankruptcy notified vide SO 1570(E), dt. 15-05-2017.

Section 2

(d)

such other body incorporated under any law for the time being in force, as the Central Government may, by notification, specify in this behalf; [***]3

[(e) personal guarantors to corporate debtors;

(f)

partnership firms and proprietorship firms; and

(g)

individuals, other than persons referred to in clause (e),] in relation to their insolvency, liquidation, voluntary liquidation or bankruptcy, as the case may be.

Section 2(e) Section 2(e) would apply only for limited purpose contained in section 60(2) and (3) Held: Section 2(e), which was brought into force on 23.11.2017 would, when it refers to the application of the Code to a personal guarantor of a corporate debtor, apply only for the limited purpose contained in Section 60(2) and (3), as stated hereinabove. This is what is meant by strengthening the Corporate Insolvency Resolution Process in the Statement of Objects of the Amendment Act, 2018. State Bank of India v V. Ramakrishnan and Ors.5 dated 14 August 2018 ,AIR2018SC376

Omit. w.r.e.f. 23-11-2017, the word “and” by the Insolvency and Bankruptcy Code (Amendment) Act, 2018 (8 of 2018) dt. 18-01-2018, vide Gazette of India, Extraordinary, Part II–Section 1, No. 8, dtd. 19-01-2018, published by the Ministry of Law and Justice, Legislative Department.

Subs. w.r.e.f. 23-11-2017, for the words “(e) partnership firms and individuals,” by the Insolvency and Bankruptcy Code (Amendment) Act, 2018 (8 of 2018) dt. 18-01-2018, vide Gazette of India, Extraordinary, Part II–Section 1, No. 8, dtd. 19-01-2018, published by the Ministry of Law and Justice, Legislative Department.

AIR 2018 SC 3876

Section 3

SECTION 3 3.

Definitions[*6,*7]

In this Code, unless the context otherwise requires,— (1)

“Board” means the Insolvency and Bankruptcy Board of India established under sub-section (1) of section 188;

(2)

“bench” means a bench of the Adjudicating Authority;

(3)

“bye-laws” mean the bye-laws made by the insolvency professional agency under section 205;

(4)

“charge” means an interest or lien created on the property or assets of any person or any of its undertakings or both, as the case may be, as security and includes a mortgage;

(5)

“Chairperson” means the Chairperson of the Board;

(6)

“claim” means — (a)

a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured;

(b)

right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured;

(7)

“corporate person” means a company as defined in clause (20) of section 2 of the Companies Act, 2013 (18 of 2013), a limited liability partnership, as defined in clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), or any other person incorporated with limited liability under any law for the time being in force but shall not include any financial service provider;

(8)

“corporate debtor” means a corporate person who owes a debt to any person;

w.e.f. 19-08-2016 clauses (1); (5); (22); (26); (28); (37) notified vide SO 2746(E), dt. 19-082016.

w.e.f. 1-11-2016 clauses (2)–(4); (6)–(21); (23–25); (27); (29)-(36) notified vide SO 3355(E), dt. 1-11-2016.

Section 3

(9)

“core services” means services rendered by an information utility for— (a)

accepting electronic submission of financial information in such form and manner as may be specified;

(b)

safe and accurate recording of financial information;

(c)

authenticating and verifying the financial information submitted by a person; and

(d)

providing access to information stored with the information utility to persons as may be specified;

(10) “creditor” means any person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree- holder; (11) “debt” means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt; (12) “default” means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not [paid]8 by the debtor or the corporate debtor, as the case may be; (13) “financial information”, in relation to a person, means one or more of the following categories of information, namely:—

(a)

records of the debt of the person;

(b)

records of liabilities when the person is solvent;

(c)

records of assets of person over which security interest has been created;

(d)

records, if any, of instances of default by the person against any debt;

(e)

records of the balance sheet and cash-flow statements of the person; and

(f)

such other information as may be specified.

Subs. w.e.f. 6-06-2018, for the word “repaid” by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 as assented by the President of India, on 17-08-2018 and published in The Gazette of India, Extraordinary, Part II-Section 1, dt. 17-08-2018.

Section 3

(14) “financial institution” means— (a)

a scheduled bank;

(b)

financial institution as defined in section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934);

(c)

public financial institution as defined in clause (72) of section 2 of the Companies Act, 2013 (18 of 2013); and

(d)

such other institution as the Central Government may by notification specify as a financial institution;

(15) “financial product” means securities, contracts of insurance, deposits, credit arrangements including loans and advances by banks and financial institutions, retirement benefit plans, small savings instruments, foreign currency contracts other than contracts to exchange one currency (whether Indian or not) for another which are to be settled immediately, or any other instrument as may be prescribed; (16) “financial service” includes any of the following services, namely:— (a)

accepting of deposits;

(b)

safeguarding and administering assets consisting of financial products, belonging to another person, or agreeing to do so;

(c)

effecting contracts of insurance;

(d)

offering, managing or agreeing to manage assets consisting of financial products belonging to another person;

(e)

rendering or agreeing, for consideration, to render advice on or soliciting for the purposes of— (i)

buying, selling, or subscribing to, a financial product;

(ii)

availing a financial service; or

(iii)

exercising any right associated with a financial product or financial service;

(f)

establishing or operating an investment scheme;

(g)

maintaining or transferring records of ownership of a financial product;

(h)

underwriting the issuance or subscription of a financial product; or

(i)

selling, providing, or issuing stored value or payment instruments or providing payment services; 5

Section 3

(17) “financial service provider” means a person engaged in the business of providing financial services in terms of authorisation issued or registration granted by a financial sector regulator; (18) “financial sector regulator” means an authority or body constituted under any law for the time being in force to regulate services or transactions of financial sector and includes the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India, the Pension Fund Regulatory Authority and such other regulatory authorities as may be notified by the Central Government; (19) “insolvency professional” means a person enrolled under section 206 with an insolvency professional agency as its member and registered with the Board as an insolvency professional under section 207; (20) “insolvency professional agency” means any person registered with the Board under section 201 as an insolvency professional agency; (21) “information utility” means a person who is registered with the Board as an information utility under section 210; (22) “notification” means a notification published in the Official Gazette, and the terms “notified” and “notify” shall be construed accordingly; (23) “person” includes— (a)

an individual;

(b)

a Hindu Undivided Family;

(c)

a company;

(d)

a trust;

(e)

a partnership;

(f)

a limited liability partnership; and

(g)

any other entity established under a statute, and includes a person resident outside India;

(24) “person resident in India” shall have the meaning as assigned to such term in clause (v) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999); (25) “person resident outside India” means a person other than a person resident in India; (26) “prescribed” means prescribed by rules made by the Central Government; 6

Section 3

(27) “property” includes money, goods, actionable claims, land and every description of property situated in India or outside India and every description of interest including present or future or vested or contingent interest arising out of, or incidental to, property; (28) “regulations” means the regulations made by the Board under this Code; (29) “Schedule” means the Schedule annexed to this Code; (30) “secured creditor” means a creditor in favour of whom security interest is created; (31) “security interest” means right, title or interest or a claim to property, created in favour of, or provided for a secured creditor by a transaction which secures payment or performance of an obligation and includes mortgage, charge, hypothecation, assignment and encumbrance or any other agreement or arrangement securing payment or performance of any obligation of any person: Provided that security interest shall not include a performance guarantee; (32) “specified” means specified by regulations made by the Board under this Code and the term “specify” shall be construed accordingly; (33) “transaction” includes a agreement or arrangement in writing for the transfer of assets, or funds, goods or services, from or to the corporate debtor; (34) “transfer” includes sale, purchase, exchange, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien; (35) “transfer of property” means transfer of any property and includes a transfer of any interest in the property and creation of any charge upon such property; (36) “workman” shall have the same meaning as assigned to it in clause (s) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947); (37) words and expressions used but not defined in this Code but defined in the Indian Contract Act, 1872 (9 of 1872), the Indian Partnership Act, 1932 (9 of 1932), the Securities Contact (Regulation) Act, 1956 (42 of 1956), the Securities Exchange Board of India Act, 1992 (15 of 1992), the Recovery of Debts Due to Banks

Section 3

and Financial Institutions Act, 1993 (51 of 1993), the Limited Liability Partnership Act, 2008 (6 of 2009) and the Companies Act, 2013 (18 of 2013), shall have the meanings respectively assigned to them in those Acts.

Section 3(10) Treatment of Home Buyers under IBC Held: The Operational Creditors are those persons to whom the ‘Corporate Debt’ is owed and whose liability from the entity comes from a transaction on operations. The final report of the Committee in para 5.2.1 defines ‘Operational Creditor’ like the wholesale vendor of spare parts whose spark plugs are kept in inventory by Car Mechanic and who gets paid only after spark plugs are sold to acquire the status of ‘Operational Creditor’ so and so forth. The Petitioner in the present case has neither supplied any goods nor has rendered any service to acquire the status of an ‘Operational Creditor’. Col. Vinod Awasthi v AMR Infrastructure Ltd NCLT Principal Bench9 dated 20 February 2017. , C.P.No(IB)-10/27

Home buyers having agreement with assured return clause treated as financial creditors Held: the home buyers who have entered into agreement for purchase of a ‘flat’ or ‘shop’ or ‘any immovable property’ which contains a clause of assured or committed returns are financial creditors within the meaning of section 5(7) of the Code. Nikhil Mehta v A M R Infrastructure Ltd 10 dated 21 July 2017. , mpanyAeNCLT,o07ofT)(InsolvecyN.aA2017

Home buyers without assured returns clause Held: Homebuyers without any agreement of assured returns are neither financial creditors nor operational creditors under the Code and, therefore, they cannot file proceedings to initiate Corporate Insolvency Resolution Process (CIRP) under the Code. While the homebuyers may have a right to refund of their amounts in case the property was not transferred to them, such property did not fall into either category of ‘goods’ or ‘services’. Since the operational debt relates to provision of goods or services, the homebuyers’ debt did not qualify to

C.P. No. (IB)-10(PB)/2017

NCLAT, Company Appeal (AT) (Insolvency) No. 07 of 2017

Section 3 be an operational debt and, consequently, the homebuyers did not qualify to be operational creditors. Pawan Dubey v M/s JBK Developers Private Limited 11 dated 3 August 2017 , NCnyApeal(T)IL,Com2017solvency)N.4f

The aforesaid view of the NCLAT was upheld by the Supreme Court when the appeal of Pawan Dubey matter was taken in appeal to the Supreme Court. The Supreme Court noted as under – Held: We agree with the view taken by the National Company Law Appellate Tribunal that refund of money paid along with interest thereon arising out of cancellation of allotment of a flat will not be subsumed in the definition of “operational debt” under the Insolvency and Bankruptcy Code, 2016. Pawan Dubey v M/s JBK Developers Private Limited12 dated 15 September 2017 , CivNo.197f20lApea

Section 3(11) Committed return plan is in the nature of ‘debt’ Held: From the aforesaid agreement/Memorandum of Understanding it is clear that appellants are “investors” and has chosen “committed return plan”. The respondent in their turn agreed upon to pay monthly committed return to investors. Thus, the amount due to the appellants come within the meaning of ‘debt’ as defined in Section 3(11) of the I & B Code’ which reads as follows:“(11) “debt” means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt;” Nikhil Mehta & Sons v AMR Infrastructure Ltd. 13 dated 21 July 2017 , ([2017]43SCL28,MANU/0041/27,[]CLA82017)BC6,I(

Followed in: Anil Mahindroo v Earth Iconic Infrastructure (P) Ltd. 14 , N2017)BC8,MAU/(IVL/05217

An application under section 9 is not maintainable on the basis of claims for entitlement of interest Held: According to learned counsel for the Appellant in terms of Section 3(6) of Code ‘claim’ means a right of payment, whether such right is reduced to judgment, fixed disputed, undisputed, legal, equitable, etc. Reliance has been placed on definition of ‘debt’ as defined in Section 3(11) as per which ‘debt’

NCLAT, Company Appeal (AT) (Insolvency) No. 40 of 2017

Civil Appeal No. 11197 of 2017

([2017]143SCL278, MANU/NL/0041/2017, [2017]141CLA281, III(2017)BC61

(IV(2017)BC128, MANU/NL/0055/2017

Section 3 means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. It is submitted that the ‘debt’ includes the interest, but such submission cannot be accepted in deciding all claims. If in terms of any agreement interest is payable to the Operational or Financial Creditor then debt will include interest, otherwise, the principle amount is to be treated as the debt which is the liability in respect of the claim which can be made from the Corporate Debtor. In the present appeals, as we find that the principle amount has already been paid and as per agreement no interest was payable, the applications under Section 9 on the basis of claims for entitlement of interest, were not maintainable. If for delayed payment Appellant(s) claim any interest, it will be open to them to move before a court of competent jurisdiction, but initiation of Corporate Insolvency Resolution Process is not the answer. Krishna Enterprises v Gammon India Ltd. 15 , anyApel(T)IComy)No.14f208,slvenc

Om Industrial Corporation v Gammon India Ltd.16 ,ColvenyApa(T)Isom)No.145f208,ncy

Swastik Enterprises v Gammon India Ltd.17 , anyApel(T)IComy)No.146f208,slvenc

Orissa Sales v Gammon India Ltd.18 , lanyApe(T)IsoCmy)No.147f208venc

Part of the dues comes within the meaning of ‘debt’ once it becomes payable Held: Even part of the dues, once becomes payable comes within the meaning of ‘debt’ and if not paid it will amount to default. Anil Nanda v Hari Kishan Sharma & Ors. 19 dated 29.11.2018 ,ComlvenyApa(T)Iso)No.167f208cy

Section 3(12) Default triggers Insolvency Resolution Process Held: The Code gets triggered the moment default is of rupees one lakh or more (section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. Innoventive Industries Ltd v ICICI Bank 20 ,AIR2017SC48,()SCALE4,07I(218)SCBC632(S)017

Company Appeal (AT) (Insolvency) No. 144 of 2018,

Company Appeal (AT) (Insolvency) No. 145 of 2018,

Company Appeal (AT) (Insolvency) No. 146 of 2018,

Company Appeal (AT) (Insolvency) No. 147 of 2018

Company Appeal (AT) (Insolvency) No. 167 of 2018

Section 3 Held: Once default in terms of section 3(12) of the IBC is established and all other requirements are fulfilled the Insolvency Resolution Process must be triggered. Bank of India v Tirupati Infraprojects Pvt Ltd 21 dated 3 July 2017 , (NCLT,PrincpalBench),C.PNoIB-104(/217

Default takes place when debt becomes due and is not paid Held: The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Innoventive Industries Ltd v ICICI Bank 22 ,AIR2017SC48,()SCALE4,07I(218)SCBC632(S)017

Position of Debt kept in Abeyance or Suspended Debt Held: Given the fact that the time frame within which the company is either to be put back on its feet or is to go into liquidation is only 6 months, it is obvious that the period of one year or more of suspension of liability would completely unsettle the scheme of the Code and the object with which it was enacted, namely, to bring defaulter companies back to the commercial fold or otherwise face liquidation. If the moratorium imposed by the Maharashtra Act [Maharashtra Relief Undertaking (Special Provisions) Act, 1958 (MRU Act)] were to continue from one year upto 15 years, the whole scheme and object of the Code would be set at naught. It is precisely for this reason that the non-obstante clause, in the widest terms possible, is contained in section 238 of the Code, so that any right of the corporate debtor under any other law cannot come in the way of the Code. Innoventive Industries Ltd v ICICI Bank 23 ,AIR2017SC48,()SCALE4,07I(218)SCa56(2017)BC3S,pr

The Adjudicating Authority has to merely satisfy itself that a default has occurred, in case of a corporate debtor who commits a default of a financial debt Held: On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt Contâ&#x20AC;Ś 20

AIR 2017 SC 4084 , 2017 (11) SCALE 4 , (2018) 1 SCC 407 , III (2017) BC 632 (SC)

(NCLT, Principal Bench), C.P. No. IB-104(PB)/2017

AIR 2017 SC 4084 , 2017 (11) SCALE 4 , (2018) 1 SCC 407 , III (2017) BC 632 (SC)

AIR 2017 SC 4084 , 2017 (11) SCALE 4 , (2018) 1 SCC 407 , III (2017) BC 632 (SC), para 56

Section 3 is disputed so long as the debt is “due” i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise. Innoventive Industries Ltd. v ICICI Bank & Anr.24 dated 31 August 2017. ,AIR2017SC408

Section 3(12) is in the context of actual non-payment by the corporate debtor Held: The definition of “default” in Section 3(12) uses the expression “due and payable” followed by the expression “and is not paid by the debtor or the corporate debtor……”. “Due and payable” in Section 3(12), therefore, only refers to the whole or part of a debt, which when referring to the date on which it becomes “due and payable”, is not in fact paid by the corporate debtor. The context of this provision is therefore actual non-payment by the corporate debtor when a debt has become due and payable. BK Educational Services Private Limited v Parag Gupta and Associates25 dated 11 October 2018 ,AIR2018SC56

Different claim(s) cannot be clubbed together for alleged default of debt, the cause of action being separate Held: Different claim(s) arising out of different agreements or work order, having different amount and different dates of default, cannot be clubbed together for alleged default of debt, the cause of action is being separate. For the said reasons, we hold that the joint application preferred by appellant under Section 9 is defective, as distinct from incomplete, and, was not maintainable. [date of decision: 1-8-2017] International Road Dynamics South Asia Pvt. Ltd. v Reliance Infrastructure Ltd. 26 ,ColvenyApa(T)Isomfncy)No.7201,

International Road Dynamics South Asia Pvt. Ltd. v D.A. Toll Road Pvt. Ltd. 27 , anyApCompInsolvecy)N.(paAT7of201

Insolvency resolution process begins when a default takes place Held: The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning nonpayment of a debt once it becomes due and payable, which includes nonpayment of even part thereof or an instalment amount. For the meaning of “debt”, we have to go to Section 3(11), which in turn tells us that a debt means a 24

AIR 2017 SC 4084

AIR 2018 SC 5601

Company Appeal (AT) (Insolvency) No. 72 of 2017,

Company Appeal (AT) (Insolvency) No. 77 of 2017

Section 3 liability of obligation in respect of a “claim” and for the meaning of “claim”, we have to go back to Section 3(6) which defines “claim” to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. A distinction is made by the Code between debts owed to financial creditors and operational creditors. A financial creditor has been defined under Section 5(7) as a person to whom a financial debt is owed and a financial debt is defined in Section 5(8) to mean a debt which is disbursed against consideration for the time value of money. As opposed to this, an operational creditor means a person to whom an operational debt is owed and an operational debt under Section 5 (21) means a claim in respect of provision of goods or services. When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor – it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in part III, particulars of the financial debt in part IV and documents, records and evidence of default in part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the “debt”, which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be.

Section 3 Innoventive Industries Ltd. v ICICI Bank & Anr. 28 dated 31 August 2017 ,AIR2017SCBC632(S)408,I17Cas57(S,[201]omp),(20174CompLJ93S[2C)017]4LA39(S

Followed in: Mahesh Kumar Sureka v SBER Bank & Ors. 29 ,(201208Compas1,()3pLJ205,(18)4CA39om063/218,MANUL

date of decision: 03-04-2018 J.P. Engineers Private Limited v Murti Udyog Limited 30 , Comal(AT)Insovepycy)No.321f07

date of decision: 19-04-2018 Mack Soft Tech Pvt. Ltd. v Quinn Logistics India Ltd. 31 ,ColvenyApa(T)Isom)No.143f207ncy

date of decision: 21-05-2018 Logvis AG v Quinn Logistics India Ltd. 32 , eal(ATCompnylvency)No.175f20(Is

date of decision: 21-05-2018 Mecon FZE v Quinn Logistics India Ltd. 33 , anyApComy)No.17al(ATInsvecp6of2017

date of decision: 21-05-2018 K. Kesava v Ajay Gopaldas Samat (HUF) & Ors 34 ,. N2018)BC3,MAU/(IVL/01628

date of decision: 18-07-2018 Jagmohan Bajaj v Shivam Fragrances Private Limited & Anr. 35 ,[201210Compas84,[]6CLA240,MNU/1972018,]49SCL5

date of decision: 14-08-2018 Avance Logistics & Trading India Private Limited v Bell Finvest (India) Limited 36 , anyApeComInsolvecy)N.07of(aAT2018

date of decision: 29-11-2018 Nayan Shah v Viral Rajarashi Mehta & Anr.37 ,CompanyAlvency)No.30pa(ATIs7of2018

date of decision: 29-06-2018

AIR 2017 SC 4084, III (2017) BC 632 (SC), [2017] 205 CompCas 57 (SC), (2017) 4 CompLJ 193(SC), [2017] 140 CLA 39 (SC)

(2018)208CompCas21, (2018)3CompLJ205, (2018)144CLA339, MANU/NL/0063/2018

Company Appeal (AT) (Insolvency) No. 321 of 2017

Company Appeal (AT) (Insolvency) No. 143 of 2017

Company Appeal (AT) (Insolvency) No. 175 of 2017

Company Appeal (AT) (Insolvency) No. 176 of 2017

(IV(2018)BC113, MANU/NL/0162/2018

[2018]210CompCas84, [2018]146CLA240, MANU/NL/0197/2018, 2018]149SCL598

Company Appeal (AT) (Insolvency) No. 07 of 2018

Company Appeal (AT) (Insolvency) No. 307 of 2018

Section 3 Aditya Enterprises v Rajratan Exim Pvt. Ltd. 38 date of decision: 06-07-2018 ,ColvenyApa(T)Isom)No.35f2018ncy

Axis Bank Ltd. v Lotus Three Developments Ltd. & Ors. 39 , IV(2018)BC9,CompCas10,(28)46LANU/L01792,M18

V. R. Hemantraj v Stanbic Bank Ghana Ltd. & Anr. 40 date of decision: 29-08-2018 ,IV(2018)BC43,[]Cos516,[208]47CLAmpa35,MANU/L02618

Keltech Infrastructure Ltd. v Aaj Finance & Credit Ltd. 41 date of decision: 25-09-2018 , anyApel(T)(IComy)No.580f21nslvec

Marg Limited v Tata Capital Financial Services Ltd.42 date of decision: 25-09-2018 ,CompanyAel(T)Isovncy)No.219f08

Amount not released due to misunderstanding cannot be treated to be default Held: From the stand taken by the parties, we find that there was no fault on part of the Corporate Debtor, in fact due to misunderstanding between the members of the Consortium of Banks, the amount was not released in favour of ‘M/s Assets Care & Reconstruction Enterprise Ltd.’, which could not be treated to be default on the part of the Corporate Debtor. As the Adjudicating Authority failed to notice the aforesaid fact, we set aside the impugned order dated 17th May, 2018. R. Sridharan v Assets Care & Reconstruction Enterprise Ltd. 43 dated 25 July 2018 , (AC157,MANURE)(IV208BC/NL016928)

Company Appeal (AT) (Insolvency) No. 335 of 2018

IV (2018) BC 92, (2018) 210 CompCas 110, (2018) 146 CLA 207, MANU/NL/0179/2018

IV (2018) BC 143, [2018] 210 CompCas 516, [2018] 147 CLA 35, MANU/NL/0265/2018

Company Appeal (AT) (Insolvency) No. 580 of 2018

Company Appeal (AT) (Insolvency) No. 219 of 2018

(ACRE) (IV(2018)BC157, MANU/NL/0169/2018)

Section 3