Skip to main content

Supreme Court allows case settlement after insolvency proceedings begin

Just seven months after the operationalization of the Insolvency and Bankruptcy Code (IBC), it has been tested by the apex court.

The Supreme Court on Monday ruled that a settlement can be considered and a case can be withdrawn after insolvency proceedings have started against a company.

It was hearing a case concerning corporate debtor Lokhandwala Kataria Construction Pvt. Ltd on an application filed by financial creditor Nisus Finance and Investment Manager LLP.

The Mumbai bench of the National Company Law Tribunal (NCLT) on 15 June initiated a corporate insolvency resolution process against the debtor.

Later, the company and the creditor approached the National Company Law Appellate Tribunal (NCLAT) saying that the two had settled the dispute and that some of the dues had already been paid.

NCLAT said on 13 July that under the IBC 2016, a case can be withdrawn before the admission of an insolvency case, and not after that.

The parties then filed a plea with the Supreme Court, which allowed a settlement to be considered under article 142 of the Indian constitution.

Article 142 provides that “the Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it”.

 Article referred: http://www.livemint.com/Industry/w0sBSJatwbM1wXv2vaIX1I/Supreme-Court-allows-case-settlement-after-insolvency-procee.html

Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

Winding-Up Petition Can’t Be Used If Bona Fide Payment Disputes Pending

The Karnataka High Court, in the case of M/s Uttam Industrial Engineering Ltd vs  M/s Shree Basaveshwar Sugars Ltd, has held that a winding-up petition has serious  ramifications on the financial standing of a company and cannot be used in cases  where there is a bona fide dispute regarding the amount owed by one party to the  other and in such cases the company court should relegate the matter either to the  civil court or arbitral tribunal. In this case, Uttam Industrial Ltd entered into a contract with Basaveshwar Sugars Ltd  to provide machinery and equipment for a sugar plant. Article referred:  http://www.livelaw.in/remedy-winding-petition-cant-relied-upon-bona-fide-payment-disputes-karnataka-hc/
Post a Comment
Read more

A liquidator must pay GST on sale of assets of a defunct company

The West Bengal Authority of Advance Ruling has ruled that a National Company Law Tribunal appointed liquidator must have the GST registration till all liabilities cease to exist and that the liquidator must pay goods and services tax (GST) on sale of assets of a defunct company under liquidation, as the sale is effectively supply of goods. 
Post a Comment
Read more