Corporate LawBeat: Your Daily 'Corp Law' Newsletter

CORPORATE LAW CASES:

SECUNDERABAD CANTONMENT BOARD Vs M/s B RAMACHANDRAIAH AND SONS [Civil Appeal Nos. 900-902 of 2021 and SLP (Civil) Nos. 27960-62 of 2019] – March 15, 2021

Supreme Court while allowing the appeal held that once time has started running, any final rejection letter does not give any fresh start to a limitation period which has already begun running. Further, the Apex Court held that applications u/s 11 of the Arbitration Act filed on Nov 06, 2013, are within the limitation period of three years starting from Nov 10, 2020.

ALLIANCE BROADBAND SERVICES PVT LTD Vs MANTHAN BROADBAND SERVICE PVT LTD & KULDEEP VERMA, THE RESOLUTION PROFESSIONAL OF MANTHAN BROADBAND SERVICES PVT LTD Vs CANARA BANK, KOLKATA [I.A. No. 853/KB/2020 In CP (IB) No. 1634/KB/2018] – December 10, 2021

NCLT Kolkata held that Bank could not have debited any amount from the Corporate Debtor's account after the order of moratorium had been passed. The Bank cannot be allowed even to contend that the information regarding the CIRP of the Corporate Debtor reached the Bank at a later stage.

NCLAT further held that once the moratorium is declared, it is not open to any person including the Financial Creditor i.e. the Bank herein to recover any amount from the account of the Corporate Debtor nor can it appropriate any amount towards its own dues. Since the action of the Bank in debiting the accounts of the Corporate Debtor was in violation of Section 14 of the Code, the Bank is liable to reverse the entry into the account of the Corporate Debtor, along with the interest having accrued thereon as per the nature of deposit.

 

MAZDA AGENCIES Vs HEMANT PLASTICS AND CHEMICALS LTD, VADODARA [Company Appeal (AT) (Insolvency) No. 763 of 2020 – March 05, 2021

NCLAT New Delhi held that an operational Creditor not part of reference before the Sick Industrial Companies (Special Provision) Act, 1985, cannot claim exclusion of time u/s 22 of SICA.

The Appellant was not part of the scheme and they have already approached Civil Court. In such circumstances, it cannot be said that the legal right of remedy of the Appellant against the Respondent was suspended as per section 22(1) of the SICA. Appellant was not part of the scheme and he has obtained the consent of BIFR for initiating its legal right of remedy against the Respondent Company before the Civil Court. Thus the remedy against the Respondent was not suspended.

Therefore, the Appellant is not entitled to claim extension of period of limitation by virtue of exclusion of period of suspension. Adjudicating Authority has rightly held that the Appellant is not entitled for exclusion of the period which spent during the pendency of proceedings under SICA. Thus, the Application under Section 9 of the I&B Code is barred by Limitation.

 

Mr VIJAYKUMAR V IYER (ORDER NO. IBBI/DC/67/2021) – February 02, 2021

Disciplinary Committee held that circulars issued by INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (IBBI) have no retrospective effect. The DC stated it was highly crucial for IRP/RP to monitor expenses incurred by RP to ensure that a CD, who was already entangled in a web of unsustainable liabilities was not further over-burdened with exorbitantly high IRPC. Besides, under IBC provisions, RP was vested with the power to engage professionals during conduct of CIRP process whose fee was ratified by CoC that usually comprised financial creditors. Circulars issued by IBBI were clarificatory in nature and aimed to clarify IRPC and achieve objectives of IBC.

In instant case, DC noted that in CIRP of CD 1, CD 2 and CD 3, alleged contraventions in SCN pertained to period before issue of clarifications by IBBI vide its Circulars. Further, after issuance of Circulars, Mr. Iyer had acted in their compliance in all aforesaid CIRPs in which there were resolutions. DC further noted that in 2017, implementation of IBC was in nascent stage and legal jurisprudence of the new insolvency regime was evolving. Every matter was a learning curve for IRPs/RPs. Thus, DC held that Mr. Iyer was not liable for alleged contraventions in matter of CIRP of CD 1, CD 2 and CD 3.

 

 

NEWS BULLETIN:

CBDT clarifies that faceless scheme not applicable to wealth tax assessments - [F. No. 317/11/2021-WT] Dated March 18, 2021

CBDT issues clarification on manner of conducting pending assessments under the Wealth Tax Act, 1957; Clarifies that pending assessment are to be completed by jurisdictional AOs through e-proceedings module and that notification introducing faceless assessments is applicable only for proceedings under Income Tax Act; States that step-by-step instruction for e-proceedings in wealth tax cases will be issued separately.  

 

CBIC notifies EXIM exchange rates w.e.f. March 19 (Annual Report) Rules, 2021 – [Notification No. 31/2021- Customs (N.T.)] Dated: March 18, 2021

CBIC notifies EXIM exchange rates w.e.f. March 19, 2021; USD valued at Rs. 73.35 for imports whereas Rs. 71.60 for exports; Supersedes Notification No. 26/2021-Customs(N.T.), dated March 04, 2021.

 

CBIC issues instructions for Manual Processing of SVLDRS declaration to comply with HC directions – [Instruction No. 01/2021-CX] Dated: March 17, 2021

CBIC issues instructions for manual processing of declaration filed under SVLDRS, 2019; Pursuant to HC rulings in favour the declarants where matters were remanded back to the Designated Committees (DC), O/o DG (Systems) have expressed inability in providing electronic processing facility of the subject declaration

CBIC also clarifies that all references for grant of approval of manual processing of the declarations need not be made to the Board and such cases can be processed manually by the concerned DCs upon fulfillment of the conditions; Enumerates such conditions viz:- (i) DC has accepted the HC order, and (ii) the counsel (ASG or Sd. Counsel) who had represented the case before the HC has opined to accept such order; Provides reporting of all those declarations that were processed manually may be reported to the O/o DG (Systems) by July 15th day of the succeeding month for record purpose: (Central Excise Wing).

 

SCNs issued by DRI to be kept pending; SC Canon ruling being examined by CBIC – [Instruction No. 04/2021- Customs] Dated: March 17, 2021

CBIC issues instructions w.r.t. SCNs issued by the Addl. Director-General, DRI (ADG) pursuant to Hon’ble SC judgment in Canon India Pvt. Ltd. vide order dated March 09, 2021; Directs that presently and until further directions, all SCNs issued by DRI may be kept pending; Reasons that such instruction is issued since SC in Canon has ruled that ADG is not the proper officer to issue SCN u/s 28(4) of the Customs Act, 1962 and as such, the entire proceedings initiated in such cases, is invalid and without any authority of law; Draws attention specifically to reference made for Board’s direction w.r.t SCN issued against Sh. Anil Aggarwal & 11 others where adjudication of the SCN would get time-barred on March 18, 2021 u/s 28(9), on account of inability to proceed further due to Canon judgment; In this context, explains that “the matter has been examined and implication of judgment are under active examination in the Board”; Further, directs that all fresh SCNs u/s 28, in respect of cases presently being investigated by DRI are required to be issued by jurisdictional Commissionerates from where imports have taken place.