Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 2016 Insolvency and Bankruptcy Code |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case(s) Referred | Referred Case 0 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Insolvency and Bankruptcy Code, 2016 – The appellant submitted a resolution plan for a company which was undergoing the Corporate Insolvency Resolution Process (CIRP) under the 2016 Code – The Resolution Plan was approved by the Committee of Creditors (CoC) and National Company Law Tribunal (NCLT) – Accordingly, the appellant deposited an amount of Rs.5 crores in an escrow account of the corporate debtor – However, further obligations were not fulfilled by the appellant under the Resolution Plan despite numerous opportunities – As a result on 11.11.2019, the CoC voted for the liquidation of the corporate debtor – The same was allowed by the NCLT – In appeal, the NCLAT permitted appellant to deposit Rs.15 crores in the escrow account and appellant agreed to the stipulation that the amount of Rs.15 crores would be forfeited if it failed to deposit the payment of Rs. 50 crores – On 08.09.2020, the appeal was dismissed and NCLAT upheld the order of liquidation – Before the Supreme Court on 09.10.2020, the appellant stated that an amount of Rs.50 crores would be deposited on or before 10.01.2021 – The appellant was specifically informed that if it failed to do so in whole or in part, the entire amount of Rs.20 crores deposited earlier would be forfeited – Thereafter, the time for making the deposit was extended until 25.02.2021 – However, several months elapsed after extension of time and no payments were made – Appellant submitted that it has moved to term lenders for finance – However, before finance can be made available to the appellant, the term lenders insisted that the status of the company must be altered from that of a company under liquidation, to an active company – Held : The appellant was unable to raise the funds – The fact of the matter emerges that the appellant will be unable to raise funds from the term lenders, who were insisting on changing the status of company from under liquidation to an active status – The order of liquidation was not set aside – What the request of the appellant reduces itself to, is that it would raise funds on a mortgage of assets of the company and unless the company is bought out of liquidation, it would not be in a position to raise the funds – This cannot be accepted – The order of liquidation was stayed and a final view is yet to be taken – Sufficient opportunities were granted to the appellant and it was not able to deposit Rs.50 crores – The appellant has failed to abide by its obligations – The consequence envisaged under the order of the Supreme Court accordingly ensue the forfeiture of the amount of Rs.20 crores – As a consequence, the management directed to revert to the liquidator for taking steps in accordance with law. |
Judge | Hon'ble Dr. Justice D.Y. Chandrachud |
Neutral Citation | 2021 INSC 127 |
Petitioner | Kridhan Infrastructure Pvt. Ltd. (now Known As Krish Steel And Trading Pvt Ltd) |
Respondent | Venkatesan Sankaranarayan & Ors. |
SCR | [2021] 2 S.C.R. 520 |
Judgement Date | 2021-03-01 |
Case Number | 3299 |
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