Tag: insolvency law

Fabricated Documents Can’t Validate a Sale, Rules Supreme Court in Insolvency Case
19Nov By The Legal ChamberNo Comments
Supreme Court

Fabricated Documents Can’t Validate a Sale, Rules Supreme Court in Insolvency Case

The Supreme Court held that for a sale by an Official Receiver to be protected under Section 37 of the Provincial Insolvency Act, 1920 upon annulment, the underlying transaction must be valid and attain finality. A transfer based on a fundamentally flawed and fabricated agreement is not a "duly made" disposition and does not survive the annulment of insolvency, requiring the property to revert to the debtor. Facts Of The Case: The case originated from a partnership firm, M/s Gavisiddheshwara & Co. Following the death of partner Singamasetty Subbarayudu, his son (the appellant) was inducted. Due to family indebtedness, the appellant was alleged to have offered his inherited one-anna share for sale via a letter. Respondent Allam Karibasappa claimed to have accepted this offer, assertin...
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Homebuyer Alert: Supreme Court Clarifies When a Real Estate Investment Becomes “Speculative”
2Nov By The Legal ChamberNo Comments
Supreme Court

Homebuyer Alert: Supreme Court Clarifies When a Real Estate Investment Becomes “Speculative”

This Supreme Court judgment clarifies the distinction between genuine homebuyers and speculative investors under the Insolvency and Bankruptcy Code, 2016. It holds that allottees with agreements structured for assured returns or buy-back clauses, without a genuine intent to possess the property, are speculative investors. Such investors are barred from initiating Corporate Insolvency Resolution Process under Section 7 of the IBC, as the Code is not a recovery mechanism for speculative investments. Facts Of The Case: This case consolidates four civil appeals concerning the initiation of Corporate Insolvency Resolution Process (CIRP) against real estate developers by individual allottees. The primary appellant, Mansi Brar Fernandes, entered into a Memorandum of Understanding (MoU) with Gay...
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Verified Claim is Key: Supreme Court Distinguishes Between Timely and Belated Homebuyers in Insolvency
16Oct By The Legal ChamberNo Comments
Supreme Court

Verified Claim is Key: Supreme Court Distinguishes Between Timely and Belated Homebuyers in Insolvency

The Supreme Court held that a homebuyer's claim, once verified and admitted by the Resolution Professional and reflected in the list of creditors, must be honoured as per the plan's provisions for verified claims. It cannot be relegated to a residuary clause meant for belated or unverified claims, as this would misapply the approved resolution plan. Facts Of The Case: The appellants, residents of Bengaluru, booked an apartment in 2010 in the 'IREO Rise (Gardenia)' project developed by M/s Puma Realtors Private Limited. They executed an Apartment Buyer’s Agreement in 2011 and paid Rs. 57,56,684 out of the total consideration of Rs. 60,06,368. The Corporate Debtor failed to deliver possession by the agreed date of November 2013. The appellants initially filed a consumer complaint, which wa...
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Supreme Court Ruling: No Certified Copy, No Appeal – NCLAT’s Order Set Aside on Technical Ground
15Sep By The Legal ChamberNo Comments
Supreme Court

Supreme Court Ruling: No Certified Copy, No Appeal – NCLAT’s Order Set Aside on Technical Ground

The Supreme Court held that an appeal against an NCLT order under the IBC must be filed within 30 days from the date of its pronouncement. It reiterated that mandatory filing of a certified copy of the impugned order is integral to a valid appeal, and non-compliance renders the appeal barred by limitation. Facts Of The Case: The case originated from an order dated June 23, 2023, passed by the National Company Law Tribunal (NCLT), Mumbai Bench, which approved a resolution plan submitted by Ashdan Properties Pvt. Ltd. in the corporate insolvency resolution process of the corporate debtor. The respondent, DSK Global Education and Research Pvt. Ltd., being aggrieved by this order, filed an appeal before the National Company Law Appellate Tribunal (NCLAT) challenging the NCLT's decision. The ...
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Supreme Court Rules Property Can Be Returned During Insolvency If Not Needed
6Sep By The Legal ChamberNo Comments
Supreme Court

Supreme Court Rules Property Can Be Returned During Insolvency If Not Needed

This Supreme Court judgment affirms the paramountcy of the commercial wisdom of the Committee of Creditors (CoC) under the Insolvency and Bankruptcy Code, 2016. It clarifies that the moratorium under Section 14(1)(d) does not bar the return of possession of a corporate debtor's leased asset when such a decision is a conscious business choice made by the CoC and the Resolution Professional to alleviate a financial burden on the estate. Facts Of The Case: The case originated from a dispute over the possession of a property leased by Nandini Impex Private Limited, the corporate debtor. The appellants had provided loans to the company, secured by the title deeds of the property's front and rear portions. Following a default, the property was conveyed to the appellants through separate deeds ...
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