What is the role of the Resolution Professional?
It is the responsibility of the resolution professional (RP) to (a) manage the affairs of the corporate debtor (CD) as a going concern during corporate insolvency resolution process (CIRP), (b) appoint and convene meetings of the CoC, so that they may decide upon resolution plans, and (c) collect, collate and finally admit claims of all creditors, which must be examined for payment, in full or in part or not at all, by the resolution applicant and be finally negotiated by the Committee of Creditors (CoC). The role of the RP is not adjudicatory but administrative.
Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and Ors. (15.11.2019 - SC) : MANU/SC/1577/2019
What is the role of the Prospective Resolution Applicant?
The prospective resolution applicant has a right to receive complete information as to the CD, debts owed by it, and its activities as a going concern, prior to the commencement of CIRP. It has a right to receive information contained in the information memorandum as well as the evaluation matrix mentioned in Regulation 36B of the CIRP Regulations.
The resolution plan submitted by the prospective resolution applicant must provide for measures as may be necessary for the insolvency resolution of the CD for maximisation of the value of its assets, which may include transfer or sale of assets or part thereof, whether subject to security interests or not. The plan may provide for either satisfaction or modification of any security interest of a secured creditor and may also provide for reduction in the amount payable to different classes of creditors.
Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and Ors. (15.11.2019 - SC) : MANU/SC/1577/2019
What is the intention of the legislature/Parliament to allow the '(suspended) Board of Directors' or the 'Partners of the Corporate Debtor' and the 'Operational Creditors or their representatives' or the 'Resolution Applicant(s)' to attend the meeting of the Committee of Creditors, if they have not right to vote?
The intention of the legislature is clear that the Committee of Creditors while approving or rejecting one or other resolution plan should follow such procedure which is transparent. Those who will watching the proceeding such as (suspended) Board of Directors or its Partners; Operational Creditors or its representatives and Resolution Applicant(s) are not mere spectator but may express their views to the Committee of Creditors for coming to conclusion in one or other way. For the reason aforesaid we are of the view that the Committee of Creditors should record reasons (in short) while approving or rejecting one or other resolution plan. Further, the views, if any, are expressed by the (suspended) Board of Directors or it's Partners; Operational Creditors or its representatives and Resolution Applicant(s), are also required to be taken into consideration by the Committee of Creditors before approving or rejecting one or other resolution plan. The views so expressed by any of those who are watching the proceeding should also be recorded (in short). As the resolution plans are opened and placed before the Committee of Creditors, as per Section 30(5), the Resolution Applicant(s) are entitled to be present. At this stage they may point out whether one or other person (Resolution Applicant) is ineligible in terms of Section 29A or not. If one or other objection is overruled, reasons should be recorded by the Committee of Creditors. After decision of the Committee of Creditors, the Resolution Professional is required to place the decision before the Adjudicating Authority under Section 31. The Adjudicating Authority who is required to take decision as per Section 31 of the I&B Code, can go through the reasoning to accept or reject one or other objection or suggestion and may express its own opinion/decision."
ANG Industries Ltd. vs. Shah Brothers Ispat Pvt. Ltd. and Ors. (24.05.2018 - NCLAT) : MANU/NL/0103/2018
Whether the Committee of Creditors are liable to bear the expenses incurred by the Insolvency Resolution Professional or not.
As per Regulation 33, the applicant means the person who files the application under Section 7 or 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the "I & B Code") who generally proposes the name of the 'interim resolution professional'. Such applicant negotiates the fee to be charged and paid to the interim resolution professional. As per the provision aforesaid, the Adjudicating Authority is required to fix the expenses where the applicant has not fixed expenses under sub-regulation (1) of Regulation 33. In such case, the applicant, who has filed the application under Section 7 or 9 of the I & B Code, is required to bear the expenses which is to be reimbursed by the committee of creditors to the extent the Committee of Creditors ratifies the same.
State Bank of India vs. SKC Retails Ltd. and Ors. (06.03.2018 - NCLAT) : MANU/NL/0033/2018
WHETHER IN TERMS OF SEC.24(3)(C) OF IBC, THE RP IS REQUIRED TO GIVE NOTICE TO OC'S OR THEIR REPRESENTATIVES TO ATTEND THE MEETING OF COC?
The NCLAT directed the RP to act in accordance with decision of the Appellate Tribunal in Rajputana Properties Pvt. Ltd V/s Ultra Tech cement Ltd. &Ors. The Appellate Tribunal did not to interfere with the NCLT Order.
ANG Industries Ltd. vs. Shah Brothers Ispat Pvt. Ltd. and Ors. (24.05.2018 - NCLAT) : MANU/NL/0103/2018
WHETHER IN ABSENCE OF GROUND MENTIONED IN SECTION 34, CAN THE ADJUDICATING AUTHORITY REPLACE THE APPELLANT (RESOLUTION PROFESSIONAL) BY ANOTHER LIQUIDATOR?
The NCLAT held that the AA has jurisdiction to remove the RP if it is not satisfied to remove the functioning of the RP, which amounts to non-compliance of Section 30(2) of IBC.
Devendra Padamchand Jain vs. State Bank of India and Ors. (31.01.2018 - NCLAT) : MANU/NL/0011/2018
What can be the grounds for rejection of Petitions filed for Insolvency Resolution?
a) Tribunal has the power to reject the Application of the Operational Creditor under Section 9(5)(d) in case of notice of dispute has been received by the operational creditors from the corporate debtor or there is record of dispute with the information utility.
In Re: One Coat Plaster and Ors. (01.03.2017 - NCLT - Principal Bench) : MANU/NC/0107/2017
b) Petitioner has neither supplied any goods nor has rendered any service to acquire the status of an 'Operational Creditor'.
Vinod Awasthy vs. AMR Infrastructures Ltd. (20.02.2017 - NCLT - Principal Bench) : MANU/NC/0443/2017
Pawan Dubey and Ors. vs. J.B.K. Developers Pvt. Ltd. (31.03.2017 - NCLT - Principal Bench) : MANU/NC/0444/2017.
c) Petitioners cannot be treated as 'Operational Creditor' within the meaning of Section 9 as the debt incurred by the respondents has not arisen out of provisions of goods, services or employment. It can also not be considered 'Financial Debt' within the meaning of Section 5(8) to mean a debt which is disbursed against the consideration of the time value or money.
Mukesh Kumar and Ors. Vs. AMR Infrastructures Ltd. (31.03.2017 - NCLT - Principal Bench) : MANU/NC/0205/2017.
d) If an ex parte decree is obtained from the civil court in relation to the amounts claimed, the petitioner is well within its rights to have it executed before the appropriate civil courts meant for execution and the National Company Law Tribunal cannot be converted into an executing court of the ex parte decree obtained.
Deem Roll-Tech Limited vs. R.L. Steel and Energy Ltd. (31.03.2017 - NCLT - Principal Bench): MANU/NC/0326/2017.
e) If there is variation between "the amount of default occurred" and "the amount claimed to be in default". While dismissing the financial creditor's application, this Bench gave liberty to it to file fresh application restricting its claim to the amount for which record is available showing the corporate debtor defaulted in redeeming the debentures as agreed.
Urban Infrastructure Trustee Ltd. vs. Neelkanth Township and Construction Pvt. Ltd. (21.04.2017 - NCLT - Mumbai): MANU/NC/0322/2017.
Whether Resolution Professional can serve more than one company at one time?
a) As per Regulation 22 of Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulation, 2016 "an Insolvency Professional must refrain from accepting too many assignments, if he is unlikely to be able to devote adequate time to each of his assignments". Thus, there is no bar in accepting more than one assignment either under the 'Code' or the Rules and Regulations framed thereunder.
In Re: Dunn Foods Private Limited (02.05.2017 - NCLT - Chandigarh) : MANU/NC/0301/2017.
Whether Tribunal can refuse to appoint an Interim Resolution Professional on the ground of large number of assignments held by such Interim Resolution Professional?
Clause 22 of the Code of Conduct for Insolvency Professionals as provided in the First Schedule of the Insolvency and Bankruptcy Board of India Regulations 2016 provides that an insolvency Professional must refrain from accepting too many assignments, if he is unlikely to be able to devote adequate time to each of his assignment. Keeping this in view the Adjudicating Authority cannot approve appointment of Interim Resolution Professional considering his previous three assignments to large companies.
IDBI Bank Limited vs. Lanco Infratech Limited, NCLT Hyderabad Bench MANU/NL/5487/2017
