Category Archives: IBC

19-08-2020 Disqualification of an IP due to Bias, being Ex-employee/Pensioner of applicant SBI Case SC Concluded (NCLAT) Delhi is not correct

NCLT New Delhi(PB) on 04.01.2020 in State Bank of India vs M/s. Metenere Limited [CP No. IB-639(PB)/2018]

Mr. Sailesh Verma. It is submitted that Mr. Sailesh Verma is an ex-employee of SBI; joined the services of SBI in the year 1977 and since then he had been working with SBI till his retirement in 2016. He has been in the services of SBI for a period of over 39 years. Thus there is an apprehension of bias against the appointment of the proposed IRP.

NCLAT : disqualified or ineligible to act as an ‘Interim Resolution Professional’.

NOW

Finally the Hon’ble SCI on 19.08.2020 in State Bank of India vs M/s. Metenere Ltd (Civil Appeal No. 2570 of 2020) disposed the matter, observing as under;

  • “We are prima facie satisfied that the approach adopted by the National Company Law Appellate Tribunal, New Delhi (NCLAT) is not correct that merely Resolution Professional who remained in the Service of SBI and is getting pension, was disentitled to be Resolution Professional.”

 

IBBI INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 2016 07-08-2020 4A. CHOICE OF AUTHORISED REPRESENTATIVE 16A. AUTHORISED REPRESENTATIVE   39. APPROVAL OF RESOLUTION PLAN.

buchasia.com/ip

IBBI INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 2016 07-08-2020

4A. CHOICE OF AUTHORISED REPRESENTATIVE. 

Inserted 4A (2) (aa) having their addresses, as registered with the Board, in the State or Union Territory, as the case may be, which has the highest number of creditors in the class as per their addresses in the records of the corporate debtor: Provided that where such State or Union Territory does not have adequate number of insolvency professionals, the insolvency professionals having addresses in a nearby State or Union Territory, as the case may be, shall be considered;”.
IBBI INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 2016 07-08-2020

16A. AUTHORISED REPRESENTATIVE.

substituted, “(9) The authorised representative shall circulate the agenda to creditors in a class, and may seek their preliminary views on any item in the agenda to enable him to effectively participate in the meeting of the committee: Provided that creditors shall have a time window of at least twelve hours to submit their preliminary views, and the said window opens at least twenty-four hours after the authorised representative seeks preliminary views: Provided further that such preliminary views shall not be considered as voting
instructions by the creditors.”.
IBBI INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 2016 07-08-2020

39. APPROVAL OF RESOLUTION PLAN.

substituted, “(3) The committee shall- (a) evaluate the resolution plans received under sub-regulation (2) as per evaluation matrix;
(b) record its deliberations on the feasibility and viability of each resolution plan; and (c) vote on all such resolution plans simultaneously. (3A) Where only one resolution plan is put to vote, it shall be considered approved if it receives requisite votes. (3B) Where two or more resolution plans are put to vote simultaneously, the resolution plan, which receives the highest votes, but not less than requisite votes, shall be considered as approved: Provided that where two or more resolution plans receive equal votes, but not less than requisite votes, the committee shall approve any one of them, as per the tie-breaker formula announced before voting: Provided further that where none of the resolution plans receives requisite votes, the committee shall again vote on the resolution plan that received the highest votes, subject to the timelines under the Code.

05-08-2020 (1) Replacement of IP IN Voluntary Liquidation Process (2) Fees Table Clarification Liquidation Process

THE GAZETTE OF INDIA
EXTRAORDINARY
PART III, SECTION 4
PUBLISHED BY AUTHORITY
NEW DELHI, WEDNESDAY, AUGUST 5, 2020
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
NOTIFICATION
New Delhi, August 5, 2020
Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Second
Amendment) Regulations, 2020
No. IBBI/2020-21/GN/REG.063.- In exercise of the powers conferred by clause (t) of subsection
(1) of section 196 read with section 240 of the Insolvency and Bankruptcy Code, 2016
(31 of 2016), the Insolvency and Bankruptcy Board of India hereby makes the following
regulations further to amend the Insolvency and Bankruptcy Board of India (Voluntary
Liquidation Process) Regulations, 2017, namely: –
1. (1) These Regulations may be called the Insolvency and Bankruptcy Board of India
(Voluntary Liquidation Process) (Second Amendment) Regulations, 2020.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process)
Regulations, 2017, for regulation 5, the following regulation shall be substituted, namely: –
“5. Appointment of liquidator.
(1) Subject to regulation 6, the corporate person shall appoint an insolvency professional as
liquidator, and, wherever required, may replace him by appointing another insolvency
professional as liquidator, by a resolution passed under clause (c) of sub-section (3) of section
59 or clause (c) of sub-regulation (1) of regulation 3, as the case may be:
Provided that such resolution shall contain the terms and conditions of appointment of
the liquidator, including the remuneration payable to him.
(2) The insolvency professional shall, within three days of his appointment as liquidator,
intimate the Board about such appointment.”.
Dr. M. S. Sahoo
Chairperson
Insolvency and Bankruptcy Board of India
[ADVT ………………………]
Note: The Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process)
Regulations, 2017 were published vide notification No. IBBI/2016-17/GN/REG010 on 31st
March, 2017 in the Gazette of India, Extraordinary, Part III, Section 4, No. 130 dated 31st
March, 2017 and were last amended by the Insolvency and Bankruptcy Board of India
(Voluntary Liquidation Process) (Amendment) Regulations, 2020 published vide notification
No. IBBI/2019-20/GN/REG054 dated 15th January, 2020 in the Gazette of India,
Extraordinary, Part III, Section 4, No. 26 on 15th January, 2020.

 

===================================================

THE GAZETTE OF INDIA

EXTRAORDINARY

PART III, SECTION 4

PUBLISHED BY AUTHORITY

NEW DELHI, WEDNESADAY, AUGUST 5, 2020

INSOLVENCY AND BANKRUPTCY BOARD OF INDIA

NOTIFICATION

New Delhi, August 5, 2020

Insolvency and Bankruptcy Board of India (Liquidation Process) (Third Amendment)

Regulations, 2020

No. IBBI/2020-21/GN/REG062.- In exercise of the powers conferred by clause (t) of subsection

(1) of section 196 read with section 240 of the Insolvency and Bankruptcy Code, 2016

(31 of 2016), the Insolvency and Bankruptcy Board of India hereby makes the following

regulations, further to amend the Insolvency and Bankruptcy Board of India (Liquidation

Process) Regulations, 2016, namely: –

  1. (1) These Regulations may be called the Insolvency and Bankruptcy Board of India

(Liquidation Process) (Third Amendment) Regulations, 2020.

(2) They shall come into force on the date of their publication in the Official Gazette.

  1. In the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016

(hereinafter referred to as the principal regulations), in regulation 4, in sub-regulation (2), in

clause (b), after the Table, the following Clarification shall be inserted, namely:-

“Clarification: For the purposes of clause (b), it is hereby clarified that where a liquidator

realises any amount, but does not distribute the same, he shall be entitled to a fee corresponding

to the amount realised by him. Where a liquidator distributes any amount, which is not realised

by him, he shall be entitled to a fee corresponding to the amount distributed by him.”.

  1. 3. In the principal regulations, in regulation 37, in sub-regulation (6), the word “of” shall be

omitted.

  1. 4. In the principal regulations, in regulation 47, in the Table, –

(a) in serial number 4, in column 2, for “Section 38 (1) and (5), Reg. 17, 18 and 21A”, the

following shall be substituted, namely: –

“Section 38 (1), Reg. 17, 18, 19, 20 and 21A”;

(b) in serial number 18, in column 4, for the word “disclosure”, the word “disclaimer” shall be

substituted.

Dr. M. S. Sahoo

Chairperson

[ADVT ………………………]

Note: The Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016

were published vide notification No. IBBI/2016-17/GN/REG005 dated 15th December, 2016 in

the Gazette of India, Extraordinary, Part III, Section 4, vide No. 460 on 15th December, 2016

and were last amended by the Insolvency and Bankruptcy Board of India (Liquidation Process)

(Second Amendment) Regulations, 2020 vide notification No. IBBI/2020-21/GN/REG060,

dated the 20th April, 2020 in the Gazette of India, Extraordinary, Part III, Section 4, No. 157 on

24th April, 2020.

 

The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 05-06-2020 No Case be Filed Due to Covid Pandemic

The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 05-06-2020 No Case be Filed Due to COVID Pandemic

MINISTRY OF LAW AND JUSTICE

(Legislative Department)

New Delhi, the 5th June, 2020/Jyaishtha 15,  1942  ( Saka)

THE INSOLVENCY AND BANKRUPTCY CODE (AMENDMENT) ORDINANCE,  2020

No. 9 OF 2020

Promulg ated by  the  President  in the  Seventy -first Year of the Republic of India.

An Ordinance further to amend the Insolvency and Bankruptcy  Code, 2016.

WHEREAS the entire ecosystem for implementation of the Insolvency and Bankruptcy Code, 2016 is in place;

AND WHEREAS the prov1s10ns relating to corporate insolvency resolution process and liquidation process for corporate persons under the Code are in operation;

AND WHEREAS COVID-19 pandemic has impacted business, financial markets and economy all over the world, including India, and created uncertainty and stress for business for reasons beyond their control;

AND WHEREAS   a nationwide lockdown is in force since

25th March, 2020 to combat the spread of COVID-19 which has ailedtodisruption of normal business operations;

AND WHEREAS it is difficult to find adequate number of resolution applicants to rescue the corporate person who may default in discharge of their debt obligation;

AND WHEREAS it is considered expedient to  suspend under sections 7, 9 and 10 of the Insolvency and Bankruptcy Code, 2016 to prevent corporate persons which are experiencing distress on account of unprecedented situation, being pushed into insolvency proceedings under the said Code for some time;

AND WHEREAS it is considered expedient to exclude the defaults arising on account of unprecedented situation for the purposes  of insolvency proceeding under this code;

AND WHEREAS Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action;

Now, THEREFORE, in exercise of the powers conferred by clause (1) of article 123 of the Constitution, the President is pleased to promulgate the following Ordinance:-

Short title and commencement.

Insertion of new section 1OA.

Suspension of initiation of corporate insolvency resolution process.

  1. (1) This  Ordinance   may  be   called  the  Insolvency and Bankruptcy  Code (Amendment)  Ordinance,

(2) It shall come into force at once.

  1. After section I0 of the principle Act, the following section shall be inserted, namely:-

“lOA. Notwithstanding anything contained in sections 7, 9 and 10, no application for initiation of corporate insolvency resolution process of a corporate debtor shall be filed, for any default arising on or after 25th March, 2020 for a period of six months or such further period, not exceeding one year from such date, as may be notified in this behalf:

Provided that no application shall ever be  filed  for initiation of corporate insolvency resolution process of a corporate debtor for the said default occurring during the said period.

Explanation-For the removal of doubts, it is hereby clarified that the provisions of this section shall not apply to any default committed under the said sections before 25th March, 2020.”

Amendment of section 66.

_ 3.  In  section  66  of  the  principal  Act,  after  sub-section (2), the following subsection shall be inserted, namely:-

“(3) Nothwithstanding anything contained in this section, no application shall be filed by a resolution professional under sub-section (2), in respect of such default against which initiation of corporate insolvency resolution process is suspended as per section 1OA.”

RAM NATH KOVIND ,

President.

  1. G. NARAYANA RAJU,

Secretary  to the  Govt. of  India.

DOWNLOAD

NCLAT directs SBI to substitute IRP Shailesh Verma who was an Ex-employee of Bank for 39 years before he retired in 2016

NCLAT directs SBI to substitute IRP Shailesh Verma who was an Ex-employee of Bank for 39 years before he retired in 2016

The National Company Law Appellate Tribunal ( NCLAT ) has upheld the order directing State Bank of India ( SBI ) to the substitution of a financial creditor’s ex-employee as the proposed interim resolution professional in a CIRP initiated by the financial creditor, on the ground of apprehension of bias. The appellant, State Bank of India has initiated insolvency proceedings against the Corporate debtor, M/s. Metenere Limited, by moving an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the Principal Bench of the National Company Law Tribunal (NCLT).

The National Company Law Appellate Tribunal ( NCLAT ) has upheld the order directing State Bank of India ( SBI ) to the substitution of a financial creditor’s ex-employee as the proposed interim resolution professional in a CIRP initiated by the financial creditor, on the ground of apprehension of bias. The appellant, State Bank of India has initiated insolvency proceedings against the Corporate debtor, M/s. Metenere Limited, by moving an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the Principal Bench of the National Company Law Tribunal (NCLT). Before the NCLT, the Corporate debtor objected to the SBI’s proposal to appoint one Shailesh Verma as an Interim Resolution Professional. It added that Verma had worked with the SBI for 39 years before he retired in 2016 and there was thus an apprehension of bias. In view of this submission, NCLT ordered SBI to substitute Verma’s name. Aggrieved by the order, SBI moved an appeal before the NCLAT. SBI contended that Mr. Verma fulfilled the requirements for appointment as Interim Resolution Professional under Insolvency and Bankruptcy Code, 2016 (IBC). It was further contended that IBC and its regulations bore no disqualification to an ex-employee of a Financial Creditor from being appointed as Interim Resolution Professional. SBI further asserted that a Resolution Professional had no adjudicatory power and only acted as a facilitator in the Corporate Insolvency Resolution Process. The three-member bench headed by Acting Chairperson, Justice Bansi Lal Bhat, while referring to the Regulation 3(1) under Insolvency and Bankruptcy Board of India Regulations, 2016 and upholding the order of NCLT observed that the sole question arising for determination in this appeal is whether an ex-employee of the ‘Financial Creditor’ having rendered services in the past, should not be permitted to act as ‘Interim Resolution Professional’ at the instance of such ‘Financial Creditor’, regard being had to the nature of duties to be performed by the ‘Interim Resolution Professional’ and the ‘Resolution Professional’. However, the bench noted the fact that Verma was neither disqualified or ineligible, the Adjudicating Authority was perfectly justified in seeking his substitution to ensure that the corporate insolvency resolution process was conducted in a fair and unbiased manner. “In the given set of circumstances, we are of the considered opinion that the apprehension of bias expressed by the ‘Corporate Debtor’ qua the appointment of Mr. Shailesh Verma as proposed Interim Resolution Professional’ at the instance of the Appellant- ‘Financial Creditor’ cannot be dismissed offhand and the Adjudicating Authority was perfectly justified in seeking substitution of Mr. Shailesh Verma to ensure that the ‘Corporate Insolvency Resolution Process’ was conducted in a fair and unbiased manner,” the bench said while confirming the order of the NCLT. “It goes without saying that the Appellant- ‘Financial Creditor’ should not have been aggrieved of the impugned order as the same did not cause any prejudice to it.”, the NCLAT remarked as it dismissed the appeal.

 

Source taxscan.in