Vol: May 08, May 14, 2017

Transcription

1 Vol: May 08, May 14, 2017 Page 1 of 10

2 WEEKLY BENCH-WISE HOLIDAY LIST Date Occasion/Festival Bench 1 st May 17 to 30 th May 17 1 st May 17 to 29 th May 17 1 st May 17 to 30 th May 17 4 th May 17 to 2 nd June 17 Summer Holidays Summer Holidays Summer Holidays Summer Holidays Bengaluru Chennai Hyderabad Mumbai WEEKL Y BENCH -WISE HOLID AY LIST INDEX GUIDE TOPIC PAGE NO. About IBBI 4 Final Orders 5-6 General Awareness 6-7 Interim Orders 8-9 MCQs and Answers to previous questions 9-10 Our Contacts 11 Page 2 of 10

3 From the Editor s Desk Dear insolvency professionals, As you all know that yesterday was the last day to provide any feedback on the draft regulations on Fast track Insolvency resolution for corporates. Hope you have sent all your concerns to the board. I think in today s ecosystem of startups it s very much required. According to the draft regulations Rs. 2 crore would be the debt limit for small companies/llp s to apply for the fast track insolvency resolution, which is to be completed in 90 days with a one-time extension of maximum 45 days. Small companies will be those fulfilling the criteria as laid down in the Companies Act, 2013, while startups are defined by the Department of Industrial Policy and Promotion(DIPP). As we all are concerned and apprehensive about the workload and risks involved in the profession, I think we all are looking for some sort of indemnity cover, to make us not so vulnerable from the problems arising out of any conflict from day-to-day activities. This can be achieved by an insurance cover. Globally under this cover, the product insures insolvency practitioners against claims for professional negligence. The level of cover is based on their annual fee income. Right now these products cover senior executives mostly directors and compliance officers under a professional indemnity cover. This policy provides cover in case of errors or omissions committed by the company executives for providing poor or negligent service or advice. Stay Alert! Anju Agarwal Partner ASC Insolvency Services LLP Page 3 of 10

4 ABOUT IBBI The Insolvency and Bankruptcy Board of India (IBBI) is a unique regulator. It combines the role of a regulator of a profession as well as that of transactions. Unlike other professions where the regulator only regulates the profession, the IBBI also writes regulations for transactions undertaken by the regulated professionals. As a regulator, it is a mini state and carries on quasi-legislative, executive and quasi-judicial functions simultaneously. Further, given that both the profession and transactions are evolving, the IBBI would have considerable developmental responsibilities in its initial years, in addition to regulation. Keeping this in view, and on consideration of the recommendations of the Working Group set up by the Ministry of Corporate Affairs on organizational structure and design, the IBBI has structured itself into three separate wings, namely, Research and Regulation Wing, Registration and Monitoring Wing and Administrative Law Wing to avoid intrainstitutional bargaining and each of these wings is headed by a separate Whole Time Member (WTM). Governing Board The IBBI consists of: (a) a Chairperson; (b) three ex-officio Members from amongst the officers of the Central Government, one each representing the Ministry of Finance, the Ministry of Corporate Affairs and the Ministry of Law, (c) one ex-officio Member nominated by the Reserve Bank of India, and (d) five other Members nominated by the Central Government, of whom at least three are Whole Time Members. Office Premises The IBBI was earlier operating from the premises of the Institute of Cost Accountants of India at CMA Bhawan, Lodhi Road, New Delhi. It moved to 7th Floor, Mayur Bhawan, Shankar Market, and Connaught Place, New Delhi that was made available by the Ministry of Corporate Affairs. Hon ble Minister of State for Finance and Corporate Affairs, Shri Arjun Ram Meghwal inaugurated this premises on March 29, Page 4 of 10

5 FINAL ORDERS Ex Employee of M/S Iyogi Technical Services (P) Ltd Vs Iyogi Technical Services (P) Ltd BRIEF: The delivery of Demand Notice is a sine quo non for putting in motion the corporate insolvency process under the Insolvency and Bankruptcy Code 2016 by the operational creditor and failure of the same disentitles the operational creditor from proceeding further. The application was filed by the ex-employee of M/S Iyogi Technical Services (P) Ltd U/s 9 of IBC, 2016 for initiation of Corporate Insolvency Resolution Process against M/s iyogi Technical Services (P) Ltd. The applicant submits that instead of repeated reminders, the company failed to pay the sum of Rs. 2,48,399/- outstanding towards the earlier salary and provident fund, which forced the petitioner to give notice of default as contemplated under the Insolvency and Bankruptcy Code However there was no response from the respondent company. The notice of default and the returned cover annexed therewith clearly showed that at the address given in the notice as well as on the postal cover the respondent is not having any office. Thus, it is clearly evident that the notice of demand as mandatorily required to be issued and delivered upon the corporate debtor has not been complied with. The delivery of Demand Notice is a sine quo non for putting in motion the corporate insolvency process under the Insolvency and Bankruptcy Code 2016 by the operational creditor and failure of the same disentitles the operational creditor from proceeding further. Hence in these circumstances the petition was dismissed by the tribunal without costs. JK Jute Mills Company Limited Vs. M/s. Surendra Trading Company BRIEF: The mandate sub section (5) of section 7 or sub section (5) of section 9 or sub section (4) of section 10, procedural in nature is a tool of aid in expeditious dispensation of justice, is discretional in nature and not mandatory. The petition was filed by JK Jute Mills Company Limited citing the question whether the time limit prescribed in Insolvency & Bankruptcy Code 2016 for admitting or rejecting a petition or initiation of insolvency resolution process is mandatory. The NCLAT, citing the reference to various case laws including the order passed by the hon ble Supreme Court in the case of P.T. Rajan Vs. T.P.M. Sahir & Ors.(2003), in the case of Kailash Vs. Nanhu and Ors (2005) and in the case of Smt. Rani Kusum Vs. Smt Kanchan Devi & ors (2005) ascertained that the time period of 14days prescribed under section 7,9 and 10 is directory in nature and not mandatory. The court said that the objective behind the time period prescribed under the respective sections is to prevent the delay in hearing the disposal of cases. But in appropriate cases, for the reasons to be recorded in writing, it can admit of reject the petition after the period prescribed under section 7, 9 or 10. Page 5 of 10

6 Raipur Power & Steel Ltd & Ors Vs. Tomorrow Sales Agency BRIEF: NCLAT disposed off the application of Tomorrow Sales Agency pvt. Ltd filed in the capacity of a Financial creditor, vide its order dated 6th March, Raipur Power & Steel Ltd. & Ors Vs. Tomorrow Sales Agency Pvt. Ltd. (Company Appeals (AT) (Insolvency) No.4 of 2017 Vide order dated 23rd February, 2017, the NCLT admitted an application filed by a FC, namely, Tomorrow Sales Agency Pvt. Ltd. under section 7 of the Code and appointed the insolvency resolution professional (IRP). The Appellant filed an appeal before the NCLAT, which disposed it of, vide its order dated 6th March, 2017, with the observation: as the Appellant has paid the full and final amount in favour of the respondent-financial creditor (M/s. Tomorrow Sales Agency Pvt. Ltd.), this court is not inclined to decide any issue at this stage nor inclined to pass any further order in view of the assurance given by the appellant that it will clear all dues, if any, payable to any financial creditor or operational creditor. It further observed: If the Tribunal, on the basis of records and the report as may be submitted by the interim Resolution Professional, comes to a conclusion that the Appellant has paid all the dues to financial creditor(s) and operational creditor(s), will close the proceeding and release the appellant company from the rigors of law and allow the appellant company to function independently through its Board of Directors. General Awareness About Limited insolvency Exam The Regulations allow chartered accountants, company secretaries, cost accountants and advocates with 10 years of post-membership experience (practice or employment) or graduates with 15 years of postqualification managerial experience to be registered as IPs on passing the Limited Insolvency Examination. The IBBI has been conducting the Limited Insolvency Examination since 31st December, 2016 through the National Institute of Securities Markets (NISM). The examination is available from locations in the country daily. The Board is revising the syllabus and question bank for the examination to be conducted from 1st July, The revised syllabus will be available on its website from 31st May, Initiatives for enhancement in Insolvency career Launch of LMS for the IBBI Limited Insolvency Examinations Indian Institute of Insolvency Professionals of ICAI has launched the Learning Management System to enable the professionals to prepare and complete the Limited Insolvency Examinations of the Insolvency and Bankruptcy Board of India. This Platform which is available to all on a no cost basis comprises of the entire syllabus in the form of presentations and supplemented by mock tests in each component of the syllabus. A unique feature is that it enables the professionals to do practice at a modular level and prepare for the examination. The link is available on the IIIPI website Professional members can click on the Knowledge Gateway, register and proceed. Page 6 of 10

7 Registered Insolvency Professional Till date there are 977 IP s registered under Regulation 7 read with Regulation 9 of Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 i.e. on provisional basis and 165 IP s registered under Regulation 7 read with regulation 5 of Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, Insolvency and Bankruptcy Board of India constitutes Technical Committee The Insolvency and Bankruptcy Board of India (IBBI) has constituted a Technical Committee in accordance with Regulation 14 of the IBBI (Information Utilities) Regulations, The Technical Committee (Committee) shall consist of the following: 1. Dr. R. B. Barman (Chairman, National Statistical Commission) Chairperson 2. Dr. Nand Lal Sarda (Emeritus Fellow, Indian Institute of Technology, Bombay) Member 3. Dr. Pulak Ghosh (Professor, Indian Institute of Management, Bangalore) Member 4. Sh. V. G. Kannan (Chief Executive, Indian Banks Association) Member The Committee shall give its recommendation for laying down Technical Standards for the performance of core services and other services under Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 and specifically on the following matters, namely: (a) the Application Programming Interface; (b) standard terms of service; (c) registration of users; (d) unique identifier for each record and each user; (e) submission of information; (f) identification and verification of persons; (g) authentication of information; (h) verification of information; (i) data integrity; (j) consent framework for providing access to information to third parties; (k) security of the system; (l) security of information; (m) risk management framework; (n) porting of information; (o) exchange or transfer of information between information utilities; (p) inter-operability among information utilities; (q) preservation of information; and (r) purging of information. Page 7 of 10

8 List of cases for which Interim Order is passed Sr. Date of Name of Parties Bench Section No. passing order 1 01/05/2017 M/s Devesh Singh Vs M/s Mega Soft Infrastructure Pvt Ltd New Delhi Bench U/s 7 of IBC, /05/2017 Ms. Daya Gupta Vs. M/s Eldorado New Delhi Bench U/s 9 of IBC, 2016 Events Pvt. Ltd. 3 01/05/2017 M/s Hythro Power Corporation Ltd Principal Bench U/s 10 of IBC, /05/2017 M/s Thyssenkrupp Industries Solution Ahmedabad Bench U/s 9 of IBC, 2016 (India) Pvt Ltd 5 01/05/2017 M/s Vasanti Petro Chem Ltd V/s M/s Ahmedabad Bench U/s 7 of IBC, 2016 Anil Ltd 6 01/05/2017 M/s All Arch India Pvt Ltd V/s M/s SS Mumbai Bench U/s 9 of IBC, 2016 Facades Pvt Ltd 7 02/05/2017 Shiv Narain Sarin Vs. M/s Eminent Principal Bench U/s 9 of IBC, 2016 Infradevelopers Pvt Ltd 8 02/05/2017 M/s Chharia Holdings (P) Ltd V/s M/s Principal Bench U/s 9 of IBC, 2016 Brys International Pvt Ltd 9 02/05/2017 M/s Somani Creamics Ltd Vs M/s Era Principal Bench U/s 9 of IBC, 2016 Infra Engineering Ltd 10 02/05/2017 M/s Vedika Nut Craft Pvt Ltd Principal Bench U/s 10 of IBC, /05/2017 Ahluwalia Construction Group Vs M/s Principal Bench U/s 9 of IBC, 2016 OSL Health Holdings care Ltd 12 02/05/2017 Vidul Sharma Vs. M/s Technopak Principal Bench U/s 9 of IBC, 2016 Advisors Pvt Ltd 13 02/05/2017 M/s. Krishna Kraftex Pvt. Ltd. And Ms. New Delhi Bench U/s 10 of IBC, 2016 Krishna Kraftex Pvt. Ltd /05/2017 M/s Design Worx Infrastructure India New Delhi Bench U/s 9 of IBC, 2016 Pvt Ltd Vs. M/S Premier Restaurant Pvt Ltd 15 03/05/2017 M/s. Krishna Kraftex Pvt. Ltd. And Ms. New Delhi Bench U/s 10 of IBC, 2016 Krishna Kraftex Pvt. Ltd /05/2017 M/s GroupM Media India Pvt Ltd Vs New Delhi Bench U/s 9 of IBC, 2016 Getit Grocery Pvt Ltd 17 03/05/2017 M/s BMM Ispat Ltd Vs. A.J. Casting Pvt New Delhi Bench U/s 9 of IBC, 2016 Ltd 18 03/05/2017 M/s Ashlay Infrastructure Pvt Ltd Vs. New Delhi Bench U/s 9 of IBC, 2016 LDS Engineers Pvt Ltd /05/2017 Chharia Holdings (P) Ltd Vs. M/S Brys Principal Bench U/s 7 of IBC, 2016 International Pvt Ltd 20 03/05/2017 Ingram Micro India Pvt Ltd Vs Dr. Jain Principal Bench U/s 9 of IBC, 2016 Video on Wheels Ltd 21 03/05/2017 N Johnson Engineers Pvt Ltd Vs Great Principal Bench U/s 9 of IBC, 2016 India Nautanki Co. Pvt Ltd 22 03/05/2017 Hotel Gaudavan Pvt Ltd (HGPL) Principal Bench U/s 7 of IBC, /05/2017 Ingram Micro India Pvt Ltd Vs. Noida Principal Bench U/s 9 of IBC, 2016 Software technology Park Ltd 24 03/05/2017 Dimensions Corporate Finance Services Principal Bench U/s 9 of IBC, 2016 (P) Ltd Vs. Pureearth Infrastructure ltd 25 03/05/2017 Dart Global Logistics Pvt Ltd Vs. Radikal Principal Bench U/s 9 of IBC, 2016 Page 8 of 10

9 Foods Ltd & Anr /05/2017 M/s Express Equipment Rental and Ahmedabad Bench U/s 9 of IBC, 2016 Logistic Pvt Ltd V/s M/s Wind World (India) Ltd 27 03/05/2017 M/s Vasanti Petro Chem Ltd V/s Anil Ahmedabad Bench U/s 7 of IBC, 2016 Ltd 28 04/05/2017 M/s Macquarie Bank Ltd. V/s M/s Principal Bench U/s 9 of IBC, 2016 Shilpi Cable Technologies Ltd /05/2017 Vidul Sharma V/s M/s Technopark Principal Bench U/s 9 of IBC, 2016 Advisors Pvt. Ltd /05/2017 M/s Vedika Nut Crafts Pvt. Ltd. Principal Bench U/s 10 of IBC, /05/2017 M/s Srei Equipment Finance Ltd. V/s Principal Bench U/s 7 of IBC, 2016 M/s Winaxx Impex Pvt Ltd 32 04/05/2017 M/s Ashlay Infrastructure Pvt. Ltd. V/s New Delhi Bench U/s 9 of IBC, 2016 M/s LDS Engineers Pvt. Ltd /05/2017 M/s Somany Ceramics Ltd V/s M/s Registrar NCLT U/s 9 of IBC, 2016 Odeon Builders Pvt Ltd 34 04/05/2017 M/s Thyssenkrupp Industries Solution (India) Pvt Ltd V/s M/s DCW Ltd. Ahmedabad Bench U/s 9 of IBC, 2016 Multiple Choice Questions: We wish all the luck for all those appearing for the limited insolvency examination. Listed below are few questions to help and interpret the code. 1. The moratorium shall not cease to have effect if? a) CIRP have been completed b) Resolution plan is approved by the Adjudicating Authority c) Orders for liquidation of corporate debtor have been passed d) Committee of creditors with 75 % voting agrees that the moratorium shall cease to have effect 2. Corporate Insolvency Resolution Process shall be deemed to be commenceda) As soon as application is filed with the NCLT b) As soon as Interim Resolution Professional is appointed c) As soon as application is accepted by the NCLT d) Within 14 days of filing an application with the NCLT 3. Two registered Valuers shall be appointed to determine the liquidation value of the corporate debtor within seven days from a) The date of appointment of Interim Resolution Professional b) The date of submission of proof of claims c) The date of acceptance of application d) The date of public announcement Page 9 of 10

10 4. Who shall fix the expenses to be incurred on or by the interim resolution professional? a) The committee of Creditors b) The Adjudicating Authority c) The Board d) The applicant 5. Which of the following statements regarding security enforcement is not true: a) Any security interest can be enforced by secured creditor without intervention of the Court or Tribunal except the provisions contained in Section 69 or 69A of Transfer of Property Act b) If funds are raised through debt securities, then action can be initiated even if secured debt was not classified as NPA c) No action can be taken if the debt is time barred or it involves agricultural land d) No action can be taken when amount of due is more than Rs. 5 lakhs or when amount due is less than 40% of the principal amount and interest thereon Answers to previous Edition Queries: 1)B 2)C 3)A 4)d 5)A Page 10 of 10

11 We may be contacted at the following offices: CORPORATE OFFICE GURGAON NOIDA 73, National Park 605, Suncity Business Tower C-100,Sector-2, Lajpat Nagar IV, Golf Course Road, Sector-54, Noida New Delhi Gurgaon, Uttar Pradesh INDIA Haryana P: /697 P: P: /111 MUMBAI Haware Infotech Park, ASSAM House No. 76, INTERNATIONAL BRANCH 303,5th Avenue Suite 1007, 704, 7 th Floor, Near Godrej Interio, New York, NY 10016, U.S.A Sector 30A, Forest Gate, P.O. Narangi, Navi Mumbai Guwahati P: /08 P: For enquiries related to: Insolvency Process, Bankruptcy Process, Filing petition with NCLT/DRT, Appointment of Insolvency Professionals, Assets Management of the Company, Fresh Start Process, Hearing of Cases or any other enquiries Please write us at: anju@insolvencyservices.in, mahima@insolvencyservices.in Disclaimer: This e-bulletin is for private circulation only. Views expressed herein are of the editorial team. ASC or any of its employees do not accept any liability whatsoever direct or indirect that may arise from the use of the information contained herein. No matter contained herein may be reproduced without prior consent of ASC. While this e-bulletin has been prepared on the basis of published/other publicly available information considered reliable, we do not accept any liability for the accuracy of its contents. ASC Group All rights reserved. Page 10 of 10