Stamp Duty On NCLT-Liquidated Property Can Be Based On Auction Price, Not ASR Rates: Bombay High Court

The Bombay High Court has held that stamp duty on property sold through a liquidation auction conducted by an NCLT-appointed liquidator can be calculated on the auction value rather than the Annual Statement of Rates (ASR) value when the auction process is transparent and there is no basis to suspect deliberate undervaluation.The Court rejected the Maharashtra Advocate General's argument that the National Company Law Tribunal (NCLT) could not be treated as a civil court for this purpose. It held...

Can Companies In Liquidation Seek Exemption From GST Pre-Deposit To File Appeals? Delhi High Court To Examine

The Delhi High Court will examine whether companies undergoing liquidation can seek exemption from the mandatory pre-deposit requirement under Section 107(6) of the Central Goods and Services Tax (CGST) Act. The issue is whether the requirement can be relaxed in view of the statutory distribution mechanism under the Insolvency and Bankruptcy Code (IBC).A Division Bench of Justices Anil Kshetarpal and Bharat Parashar requested Additional Solicitor General of India Raghavendra Shankar to assist...

Attempt To Transfer Property To Defeat Creditors Not 'Act Of Insolvency' Under Provincial Insolvency Act: Madras HC

The Madras High Court at Madurai recently held that an attempt by a debtor to transfer property to defeat creditors may justify attachment before judgment under Order 38 of the Code of Civil Procedure (CPC). However, such an attempt by itself does not amount to an “act of insolvency” under Section 6 of the Provincial Insolvency Act, 1920.“Attempting to transfer one's property to defeat the interest of the creditors can be a good ground for attaching the property before judgment under Order 38 of...

DEL Status Cannot Continue For Pre-CIRP Defaults After IBC Resolution Plan: Delhi High Court

The Delhi High Court has held that continuing a company's Denied Entry List (DEL) status to enforce export obligations arising before the commencement of its insolvency proceedings would violate the “clean slate” principle under the Insolvency and Bankruptcy Code (IBC). This would apply where the monetary liabilities arising from those defaults have been settled under an approved resolution planJustice Amit Mahajan made the observation while allowing a petition filed by Waaree Transpower...

Pending Suit Against Company Under Liquidation Requires NCLT Leave To Proceed: Patna High Court

The Patna High Court has held that a pending commercial suit involving a company under liquidation cannot proceed without leave of the National Company Law Tribunal (NCLT)."once a winding up order is passed, no suit or other legal proceedings shall be commenced or if pending at the date of the winding up order, shall be proceeded with, by or against the company except with the leave of the Tribunal and subject to such terms that the Tribunal may impose,” a Bench of Justices Rajeev Ranjan Prasad...

Orissa High Court Quashes Air Pollution Case Against Tata Steel Over Bhushan Steel's Pre-CIRP Offences

The Orissa High Court has quashed criminal proceedings against Tata Steel Limited (TSL) arising from alleged violations of the Air (Prevention and Control of Pollution) Act, 1981 by erstwhile Bhushan Steel Limited (BSL).A coram of Justice Sibo Sankar Mishra was dealing with a petition filed by TSL under Section 482 of the Criminal Procedure Code seeking quashing of proceedings pending before the SDJM, Dhenkanal, as well as the order taking cognizance against the company. The State Pollution...

Kerala High Court Keeps Coercive Proceedings Against KHFL RP In Company-Related Criminal Cases In Abeyance

The Kerala High Court on Tuesday directed authorities to keep coercive proceedings against the Resolution Professional of Kerala Housing Finance Limited (KHFL) in abeyance in cases concerning the company. It, however, clarified that proceedings against the other accused can continue.Justice G. Girish passed the interim order on a petition filed by P.D. Vincent, the Resolution Professional of KHFL, which was admitted into the Corporate Insolvency Resolution Process (CIRP) by the NCLT Kochi in...

Tax Authorities Cannot Recover Pre-CIRP Dues Extinguished Under Resolution Plan: Bombay High Court

The Bombay High Court on 7 September held that tax authorities cannot continue recovery proceedings for pre-CIRP dues extinguished under an NCLT-approved Resolution Plan. A Division Bench of Justices M.S. Karnik and Sandesh D. Patil allowed a writ petition filed by Aarem Insights Pvt. Ltd., formerly known as Shop CJ Network Pvt. Ltd., and directed the State tax authorities to refund the statutory pre-deposit of Rs. 31,99,174 made by the company for pursuing its MVAT appeal, along with...

Welfare-Oriented Rehabilitation Policy Cannot Preserve Claims Extinguished Under IBC: Madhya Pradesh High Court

The Madhya Pradesh High Court has held that a rehabilitation policy or agreement with a project-affected person cannot preserve a claim merely because it is welfare-oriented, as the Insolvency and Bankruptcy Code overrides inconsistent laws and policies.Justice Sanjeev S. Kalgaonkar observed, “Thus, Rehabilitation policy or any agreement with project affected (displaced) person cannot facilitate claim as an exception for the reason that it is welfare oriented. Section 238 of IBC gives Insolvency...

Delhi High Court Restores Super Bazar Writ Petition Withdrawn On Former Liquidator's Instructions

On 15 September, the Delhi High Court recalled the 18 May 2018 order dismissing The Cooperative Store Limited (Super Bazar)'s writ petition as withdrawn, after finding that its former Official Liquidator, Dr. A.K. Mishra, lacked authority to instruct the withdrawal after his tenure ended. Justice Amit Mahajan held that an Official Liquidator cannot instruct withdrawal of a writ petition after his tenure has expired, particularly where the proceedings concern substantial public money. The Bench...

Calcutta High Court Quashes Income-Tax Reassessment Against McNally Bharat After IBC Resolution Plan

The Calcutta High Court has quashed income-tax reassessment proceedings against McNally Bharat Engineering Company Limited, holding that the authorities failed to satisfy the statutory conditions for reopening the assessment and acted contrary to the company's NCLT-approved resolution plan. Justice Smita Das De allowed the company's writ petition and set aside the notice and order issued by the tax authorities along with all consequential proceedings. The authorities were also...

Bombay High Court Rejects Patanjali Foods' Reliance On NCLT Plan To Oppose Impleadment In Labour Case

On 7 September, the Nagpur Bench of the Bombay High Court rejected Patanjali Foods Ltd.'s challenge to its impleadment in a pending labour dispute concerning an employee of Ruchi Soya Industries Ltd. Justice Nandesh S. Deshpande dismissed Patanjali Foods's writ petition and upheld the orders of the Labour Court and Industrial Court, while leaving it free to raise its defences based on the resolution plan before the Labour Court. The Bench held:“Two factors are against the petitioner; firstly,...