Cases related to IBC by NCLAT

1. B. Govinda Ramesh Vs. Vinyasa Engineering Pvt. Ltd. & Ors.

Company Appeal (AT) No. 02 of 2019

Ratio of the decision:

There may be many issues pleaded before the Tribunal but the Tribunal is not required to
suo-moto go through all the issues if during the hearing the parties do not address rest of
the issues.
As learned counsel for the Appellant/Petitioner submits that all those issues were raised
before the Tribunal, we are of the view that the Appellant/Petitioner may bring the same to
the notice of the Tribunal by filing a petition for review along with certificate of the arguing
counsel that he has argued on other issues. In such case, the Tribunal may decide the same
in accordance with law. The appeal stands disposed of with aforesaid observation.

2. Lalit Mishra & Ors. Vs. Sharon Bio Medicine Ltd. & Ors
Company Appeal (AT) (Insolvency) No. 164 of 2018

Ratio of the decision:

The present appeal has been preferred by the promoters, who are responsible for having
contributed to the insolvency of the ‘Corporate Debtor’. The ‘I&B Code’ prohibits the
promoters from gaining, directly or indirectly, control of the ‘Corporate Debtor’, or
benefiting from the ‘Corporate Insolvency Resolution Process’ or its outcome. The ‘I&B
Code’ seeks to protect creditors of the ‘Corporate Debtor’ by preventing promoters from
rewarding themselves at the expense of creditors and undermining the insolvency
processes.
For the aforesaid reasons, it will be evident from the ‘I&B Code’ that the powers of the
promoters as the members of the Board of Directors of the ‘Corporate Debtor’ are
suspended. The voting right of the shareholders, including promoter shareholders, are
suspended and shareholders’ approval is deemed to have been granted for implementation
of the ‘Resolution Plan’ as apparent from explanation to Section 30(2)(f) of the ‘I&B Code’.
The promoters, being ‘related parties’ of the ‘Corporate Debtor’, have no right of
representation, participation or voting in a meeting of the ‘Committee of Creditors’.
Admittedly, the shareholders and promoters are not the creditors and thereby the
‘Resolution Plan’ cannot balance the maximization of the value of the assets of the
‘Corporate Debtor’ at par with the ‘Financial Creditors’ or ‘Operational Creditors’ or ‘Secured
Creditors’ or ‘Unsecured Creditors’. They are also ineligible to submit the ‘Resolution Plan’ to
again control or takeover the management of the ‘Corporate Debtor’.
In the aforesaid background, if no amount is given to the promoters/ shareholders and the
other equity shareholders who are not the promoters have been separately treated by
providing certain amount in their favour, the Appellant cannot claim to have been
discriminated.
3. Kamineni Steel & Power India Pvt. Ltd. Vs. Indian Bank & Ors.
Company Appeal (AT) (Insolvency) No. 45 of 2018
Ration of the decision:
Section 21 relates to ‘Committee of Creditors’ which normally is comprising of ‘Financial
Creditors’ of the ‘Corporate Debtor’ but does not allow the related party who owes financial
debt.
As per sub-section (8) of Section 21 (as it then was), all decisions of the ‘Committee of
Creditors’ required to be taken by a vote of not less than seventy-five percent of the voting
share of the ‘Financial Creditors.
Requirement of minimum seventy-five percent of the voting shares of the ‘Financial
Creditors’ has been reduced subsequent to the passing of impugned orders dated 23rd
November, 2017 and 27th November, 2017.
From plain reading of Section 21 (8) (as it then was) it is clear that all the decisions of the
‘Committee of Creditors’ is required to be taken by a vote of not less than seventy-five
percent of the voting shares of the ‘Financial Creditors’, including the approval of the
‘Resolution Plan’. Sub-section (8) of Section 21 being mandatory in nature, any plan which
has not been approved by the ‘Committee of Creditors’ with voting shares of seventy-
five percent, cannot be approved by the Adjudicating Authority as it will be against the
provisions of Section 30(2)(e) of the ‘I&B Code’ which stipulates that the ‘Resolution Plan’
does not contravene any of the provisions of the law for the time being in force. Less than
seventy-five percent of the voting shares of the ‘Committee of Creditors’ in the matter of
approval of the ‘Resolution Plan’ being against the provisions of clause (e) of sub-section (2)
of Section 30, it cannot be approved.

4. Amandeep Singh Bhatia & Ors Vs. Vitol S.A. & Anr
Company Appeal (At)(Insolvency) No.502 Of 2018
Brief of the descision:
As per the section 66 provision, after the investigation if any report is filed against the Ex-
Director it will always open to the Adjudicating Authority to pass appropriate order under
Section 66 read with Section 67 of the I&B Code.
In view of provisions aforesaid, it cannot be stated that the Adjudicating Authority is not
empowered to direct the ex-Directors not to leave the country without prior permission of
the Adjudicating Authority.
The Adjudicating Authority has not stayed the movement of the appellants, but has only
observed that if they intend to leave the country should take the permission of
the Adjudicating Authority.

5. Jagmohan Bajaj Vs. Shivam Fragrances Private Limited

Company Appeal (AT) (Insolvency) No. 428 of 2018
Ratio of the decision:
Internal dispute of Directors of Corporate Debtor and pendency of application under Section
241 and 242 of Companies Act, 2013 before NCLT, New Delhi Bench for adjudication
does not construed a valid defense to triggering of Insolvency Resolution Process.
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.
 The statutory right of a Financial Creditor satisfying the requirements of Section 7 of the I&B
Code to trigger Insolvency Resolution Process cannot be made subservient to adjudication of
an application under Section 241 and 242 of the Companies Act, 2013.

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