Newsletter INSOLVENCY AND BANKRUPTCY CODE, 2016 APRIL, 2021 Action under Section 7 IBC will lie against guarantor which is a corporate person though principal borrower is not a corporate person. Recently, the Hon’ble Apex Court in the matter of Laxmi Pat Surana v. Union Bank of India, has held that an application under section 7 of the Insolvency and Bankruptcy code, 2016 will also lie against the Corporate Guarantor by virtue of the Deed of Guarantee given by the Corporate Guarantor for securing the loan availed by a proprietorship firm, upon default committed by the proprietorship Read More... Whether a person who is ineligible to file a Resolution Plan under section 29A of the Insolvency and Bankruptcy Code, 2016 can file a scheme under section 230 of the Companies Act? Recently, the Hon’ble Apex Court in the matter of Arun Kumar Jagatramka Versus Jindal Steel and Power Ltd. & Anr., while deciding the validity of the Scheme filed under section 230 of the Companies Act, has held that the purpose of the ineligibility under Section 29A is sustainable revival and to ensure that a person who is the cause of the problem cannot be a part of the process of the solution, Accordingly, a person who is ineligible under Section 29A of the Insolvency and Bankruptcy Code (IBC) to submit a resolution plan is barred from proposing a scheme of compromise and arrangement under Section 230 of the Companies Act, 2013. Read More... Moratorium Under Section 14 IBC Covers Section 138 NI Act Proceedings Against Corporate Debtor For Cheque Dishonour : Supreme Court Recently, the Hon’ble Apex court in the matter of P Mohanraj and others v M/s Shah Brothers Ispat Ltd. wherein it has been held that Moratorium was applicable only to the corporate debtor and that the cheque case proceedings can continue against natural person in-charge of the corporate debtor, such as directors of the company. The issue considered by the Court was "whether the institution or continuation of aproceeding under Section 138/141 of the Negotiable Instruments Act can be said to be covered by the moratorium provision, namely, Section 14 of the IBC". Read More... Provisions of Limitation Act is applicable to the proceeding under Indolvency and Bankruptcy code, 2016 : Recently, the Hon’ble Apex Court in the matter of Sesh Nath Singh Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd, wherein the Hon’ble Apex Court held that an application under Section 7 of the Insolvency and Bankruptcy Code, the applicant can claim the benefit of Section 14 of the Limitation Act, in respect of proceedings under SARFAESI Act. As  the proceedings under SAFAESI proceedings are 'civil proceedings' for the purposes of Section 14 of the Limitation Act. Further, held that Section 18 of the Limitation Act is applicable to proceedings under IBC and that if there is acknowledgment of debt in the balance-sheets or the OTS Proposal, the period of limitation would get extended if the acknowledgment is made before the period of limitation expires. Reference may be made to the Judgment in the matter of “Mahabir Cold Storage Vs. Commissioner of Income Tax, (1991) 188 ITR 91" and Judgment in the matter of “A.V. Murthy Vs. B.S. Nagabasavanna” (2002) 2 SCC 642 wherein Hon’ble Supreme Court considered entries in Books of Accounts/Balance Sheets and observed that entries in such records may amount to Acknowledgment of debt. Read More... Decision of the CoC is paramount and as such neithet the NCLT nor NCLAT Can't Interfere With Commercial Wisdom Of CoC Except Within Limited Scope Under Sections 30 & 31 IBC : Recently, the Hon’ble Apex Court again in the matter of Kalpraj Dharamshi & Anr. Versus Kotak Investment Advisors Ltd. & Anr. wherein a 3-judge bench comprising Justices AM Khanwilkar, BR Gavai and Krishna Murari has set aside the order passed by the Hon’ble  NCLAT, which had annulled the decision of Committee of Creditors to accept a resolution plan. The Hon’ble Apex court has  held that Decision of the CoC is paramount and as such neithet the NCLT nor NCLAT Can't Interfere With Commercial Wisdom Of CoC Except Within Limited Scope Under Sections 30 & 31 IBC Read More... ARBITRATION AND CONCILIATION ACT Sole Proprietorship Will Fall Under International Commercial Arbitration If Proprietor Is Foreign Resident : Supreme Court Recently, the Hon’ble apex Court while setting aside the order passed by the Hon’ble Delhi high Court, has held that a sole proprietorship will fall under international commercial arbitrationif the proprietor is a habitual resident of a foreign country, notwithstanding the fact that the proprietary concern is carrying out business in India. Further, held that Delhi High Court had no jurisdiction as the dispute was an international commercial arbitration within the meaning of Section2(1)(f) of the Arbitration and Conciliation Act. Read More... INDIAN PENAL CODE Section 195(1)(b)(i) CrPC Does Not Bar Prosecution By Investigating Agency For Offence U/s193 IPC Committed During Investigation Stage Recently, the Hon’ble apex Court in the matter of  Bhima Razu Prasad vs. State [S.L.P. (Criminal) No. 5102 of 2020]has held that the prosecution by the investigating agency for offence punishable under Section 193 IPC [for fabricating false evidence]committed during the stage of investigation will not be barred under Section 195(1)(b)(i) CrPC if the investigating agency has lodged complaint or registered the case prior to commencement of proceedings and production of suchevidence before the Trial Court. Further, the Bench also held that the said offences would not be considered an offence committed in, or in relation to, any proceeding in any Court for the purpose of Section 195(1)(b) (i), CrPC. Read More... DOMESTIC VIOLENCE ACT Divorced Wife Not Entitled To Right Of Residence Under Section 17 Domestic Violence Act Recently, the Hon’ble Kerela High Court in the matter of Mr.Ramachandra Warrior vs Jayasreethe has held that the right of residence under section 17 the Domestic Violence Act is available only to a woman in a domestic relationship and none other. However, the court observed that a divorced wife occupying a shared household can be evicted only in accordance with law. Read More... OTHER RELEVANT JUDGMENTS Can’t charge interest on interest during loan moratorium. Recently, the Hon’ble Apex Court in the matter of Small Scale Industrial Manufactures Association (Regd) v Union of India and connected cases, has held that during moratorium imposed on imposing interest over the loan availed by various parties/ people, the Banking institutions cannot charge interest on interest during loan moratorium. Read More...   NEW DELHI X -3, Green Park Main, New Delhi, 110016, Telephones: +91 11 2652 0041-42 For further / specific information, please contact us at: info@tandonandco.com Disclaimer: The contents of this newsletter are intended for information purposes only, and parts of this newsletter are based on news reports and have not been independently verified. The newsletter is not in the nature of a legal opinion or advice. 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