Vol 11th: Aug 01, 2017-Aug 31, 2017 · Vol 11th: August 01, 2017-August 31, 2017 FEW FINAL ORDERS...

Vol 11th: August 01, 2017-August 31, 2017

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Vol 11th: Aug 01, 2017-Aug 31, 2017

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MONTHLY BENCH-WISE HOLIDAY LIST

INDEX GUIDE

INDEX GUIDE

Date Occasion/Festival Bench

August 14, 2017 Local Holiday Principal & New Delhi, Chennai, Kolkata Bench

August 15, 2017 Independence Day All Benches

August 16, 2017 to August 18, 2017 Local Holidays Hyderabad Bench

August 25, 2017 Local/Bench-wise Holiday

Kolkata, Ahmedabad, Bengaluru, Chennai, Guwahati, Hyderabad, Mumbai Bench August 28, 2017 to August 31, 2017 Local Holidays Mumbai Bench

TOPIC PAGE NO.

Final Orders 4

Most discussed cases 5

General Awareness 6-8

Our Contacts 9

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From the Editor’s Desk

Dear Insolvency Professionals,

Two issues I would like to highlight here for this edition of insolvency times.

First issue is about stance of Bankers towards Insolvency & Bankruptcy proceedings. Every one of us

is watching and observing that whatever proceedings that have been initiated by Bankers it is because

of the regulator RBI has directed them to do so on the directions of the Government itself. Given the

freedom, Banks specially public sector banks in particular, would like to adopt wait and watch policy.

It’s about who will take the lead. Some banks have yet to take even policy level decisions at their

corporate level for initiating Insolvency proceedings against different classes of defaulters. Zonal

offices of most of the Banks and other field staff are oblivious of insolvency laws. Or if at all there is

knowledge they are expecting guidance from their HO on which way to go. Bankers are also

extremely conscious of cost of professionals like fees of valuers, auditors, legal practitioners. And in

the latest scenario would like to pay minimum fees to the insolvency professionals. We gather that

some are thinking of fixing fees for insolvency professionals as a percentage of liquidation value or

recovery for them. If at all Insolvency & Bankruptcy Code should be made a success, Bankers must

come forward aggressively as Financial Creditors. Till now operational creditors have moved most of

the insolvency applications in NCLT, which is insufficient to take the code to its logical and intended

outcome.

Second issue is about aspirations of insolvency professionals to grab the assignments at handsome

remuneration. More and more persons are qualifying exams as insolvency professionals every week.

An analysis of these professionals would show that most of them are already practicing CA’s, CS’s or

advocates and command high fees in their existing professions. On the one hand very few cases are

being admitted by NCLT, and on the other fee structure and other incentives look to be very feeble or

weak for insolvency professionals, dashing hopes of such CA’s, CS’s and advocates who are hoping

that new career of insolvency & bankruptcy will be better paid of. There have been comparisons of

remuneration of IP’s in India with that of European Countries where fees is settled or counted on ‘per

hour’ basis. But, we must know that there is no short cut for a law of this magnitude to evolve &

stabilize in Indian conditions.

Let’s have perseverance, watch the progression of Insolvency & Bankruptcy Code and there will be

enough for every one of us going down the line.

Stay Alert!

Anju Agarwal

Partner

ASC Insolvency Services LLP


FEW FINAL ORDERS FOR THE MONTH OF JULY, 2017

Sr. No.

Date Name of Case Bench Amount of Default (Rs.)

Status of Application

Reason for rejection

1 04/07/2017 Mr. Penugonda Satish Babu V/s M/s Amarpali Biotech India Private Limited

New Delhi (Special Bench)

17,39,623/- Rejected The certificate issued by the bank was not in consonance with the way it required to be produced and disputes raised by the parties, it was not possible for the Tribunal in exercise of Summary jurisdiction to go into it.

2 06/07/2017 M/s Mehadia Sales Trade Corporation Pvt. Ltd.

Mumbai Bench

152.36 Cr. Admitted

3 06/07/2017 M/s Shivek Labs Limited

Chandigarh Bench

117.22 Cr. Admitted

4 10/07/2017 Mr. Rashid Ismail Tharadra V/s M/s Raj Oil Mills Ltd.

Mumbai Bench

125.45 Cr. Admitted

10/07/2017 Jerint Jacob.K V/s M/s Orien Kuries & Loans Pvt. Ltd

Chennai Bench

4,48,040/- Admitted

5 12/07/2017 Mr. Sanjeev Jain V/s M/s Eternity Infracon Pvt. Ltd.

New Delhi Bench

42,47,955/- Rejected The applicant does not fall within the ambit of ‘Financial Creditor’.

6 14/07/2017 M/s S2 Infotech International Limited V/s M/s Intarvo Technologies Pvt. Ltd.

New Delhi (Special Bench)

8,28,394/- Rejected The operational Creditor does not seem to have complied with the mandatory requirement of serving notice of default as well as notice of application on the Corporate Debtor at its registered office nor complied with the provisions of Section 9(3)

7 14/07/2017 M/s Sri Pitambara Enterprises V/s M/s Valeda Herbals Pvt. Ltd.

New Delhi Bench

17,03,797/- Rejected Dispute was raised by the Corporate Debtor

8 14/07/2017 M/s Su-Kam Power System Pvt. Ltd. V/s M/s Uniforce Energy Systems India Pvt. Ltd.

New Delhi Bench

3,21,54,784.81 Admitted

9 20/07/2017 M/s Maheshwar Textiles V/s M/s Zapp India Limited

New Delhi Bench

52,63,214/- Admitted

10 20/07/2017 Beeta Kone Tools V/s GEI Industrial Systems Ltd.

Ahmedabad Bench

4,38,071/- Admitted

11 21/07/2017 SREI Infrastructure Finance Ltd. V/s K.S. Oils Ltd

Ahmedabad Bench

99.73 Cr. Admitted

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Most discussed cases in July’ 2017

SBI vs. Essar Steel

To purge the banking system of big-ticket stressed assets, the Reserve Bank of India’s internal advisory committee

(IAC) has recommended for immediate reference under the Insolvency and Bankruptcy Code (IBC) 12 accounts

totaling about 25 per cent of the current gross non-performing assets (GNPAs) of the banking system. The IBC is a

single law that deals with insolvency and bankruptcy. It provides for a clear, coherent and speedy process for early

identification of financial distress and resolution of companies and limited liability entities if the underlying business

is found to be viable.

Essar steel is named by the RBI among said 12 accounts. As the matter was taken up for Insolvency Process, Essar

Steel challenged actions of SBI at Gujarat High Court stating that they are at a stage of loan restructuring and such

steps would not only hamper its operations but also delay its discussion with banks for a resolution. It is at an

advance stage for restructuring of its loan. They also challenged contents of RBI’s press release that “Such cases will

be accorded priority by the National Company Law Tribunal (NCLT)”. Later on RBI amended the said press release

and subsequently, Essar Steel took fresh pleas that petition is not signed by the authorized signatories of SBI.

Our Take: IBC has been in operation for more than a year now. Had Essar Steel been serious on ongoing

restructuring they would have got the process completed in this one year. But the fact is promoters want to cling on

to the control of Company affairs in spite of lingering insolvency. The SBI is going to come out as winner and what

Essar Steel can do is to cause delay only. So, there is a strong possibility that CIRP for Essar Steel would also be

initiated by NCLT.

____________________________________________________________________________________

In the news

SIG 24 under the aegis of INSOL India SIG24 is an exclusive group of leading firms engaged in restructuring, turnaround and insolvency activities.

SIG 24 is also the main resource bank for INSOL India and its projects and activities. We are happy to share

that ASC Consulting Private Limited has become a member of the SIG 24 group. We are active member of

the group and would contribute our 100% for the purpose.

_______________________________________________________________________________________

Editorial Board of E-Newsletter of INSOL India

INSOL India has set up different committees for proper functioning and accomplishment of tasks. One of

the committee established is the E-newsletter editorial board and Ms. Anju Agarwal has been appointed as

one of the members in said committee.

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Draft Best Practices

Society of Insolvency Practitioners of India (SIPI) has set up a Task Force on Insolvency Best Practices. Draft

Guidelines have been placed in public domain for comments till 15 July. These will then be finalized and

endorsed by the Board of SIPI, INSOL India and ASSOCHAM after wide consultation with stakeholders.

There are three drafts issued namely:

1. Payment of Fee and Reimbursement of Out-of-Pocket Expenses 2. First two weeks from the date of appointment of Interim Resolution Professional 3. IP Planning before one day

Members may go through following link for drafts and for giving their comments.

Link: http://www.insolindia.com/draft-best-practices

RBI taking lead for resolution of NPAs

In May, Central Government issued an ordinance amending the Banking Regulation Act, 1949, to

help banks quickly resolve NPAs in which any bank can initiate Insolvency Resolution process against

any defaulter.

An Internal Advisory Committee (IAC) of RBI was constituted and it held its first meeting on June 12,

2017.

The IAC noted that under the recommended criterion, 12 accounts totaling about 25 per cent of the

current gross NPAs of the banking system would qualify for immediate reference under IBC.

As Insolvency professional requires to prepare a resolution plan under CIRP, same is the criteria

introduced by RBI that banks should prepare a resolution plan within six months of any declared

NPA and if such plan is not viable then initiation of Insolvency Resolution Process is required (as of

now but should be made mandatory) under the IBC’2016 as in case of many developed countries.

So, when RBI took out a list of 12 accounts followed by further list of 488 accounts (though not

disclosed as yet) making it 500, there was a lot of hue and cry amongst the promoters of these

companies but orders of High court and Supreme court makes a conducive ecosystem for IBC to

bear better fruits.

_____________________________________________________________________________________

Govt. working on a simpler bankruptcy code for SMEs After dealing firmly with large corporate loan defaulters, the government has started drawing up a

simpler version of the insolvency and bankruptcy code for partnership and proprietorship firms, the

legal entity that most small and medium enterprises (SMEs) take.

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http://www.insolindia.com/draft-best-practices


One reason the government is keen to evolve an efficient and low cost insolvency procedure for the

SME sector is its ability to create jobs with low capital and the need for quick redeployment of capital in

the event of an enterprise’s failure. IBBI has started working on a blueprint for the SME bankruptcy

code, the framework of which is expected to be drawn up by the end of this month.

“SME’s need for restructuring is different from that of big companies. The issues they face are less

concerning business restructuring and are more about operational challenges and access to credit.”

Public Announcements

Sr.

No.

Announced under Announcements till July Announcements in the month

of July

1 Corporate Insolvency Resolution Process 163 39

2 Voluntary Liquidation Process 17 07

___________________________________________________

Workshops

1. A Session for Insolvency Professionals held on July 22, 2017 at India International Centre, New Delhi by

the members of SIPI and other active IP’s such as Mr. Navneet Gupta & Mr. Anil Katia, where key speakers

gave deep insight about the subject.

Mr. Sumant Bantra, our mentor on insolvency matters was at his usual best. A humble voice with

enormous effectiveness, he took us through nuances of insolvency law & new measures that we all will

have to take going forward.

Mr. Sanjeev Deora took us through the processes adopted in European Countries and status of

advancement of insolvency & bankruptcy laws. Such as in Germany a defaulter has to apply for insolvency

after 21 days of any default made by corporate debtor.

Mr. Anil Goel, Insolvency Professional shared his experiences of handling case of LML, a large corporate

debtor. He shared how he found it difficult to proceed in the COC as the members attending COC meetings

are not abreast with the happenings and absence of decision-making powers is a deterrent to reach any

conclusion. Also a practical problem is regarding the fees of professional hired by the IRP in discharge of his

duties such as Registered valuers, auditors and others.

Mr. Vijay K. Singh, an academician & scholar, elaborated law points & rationale in various cases admitted or

rejected by NLCT in the recent past. Such one case regarding, consideration of a consumer as a financial

creditor in the wake of assured returns promised by the debtor while selling a contingent property.

The knowledge base of about 50 participants was enriching and they were prepared for future challenges,

which this profession will thrust upon them. We compliment the organizers and hope that they will

organize more such sessions.

2. On 26th and 27th July, 2017 a workshop was held in Kolkata for the Insolvency Professionals who have

registered with the Board under Regulation 7 of Insolvency Professionals Regulations, 2016 after having

cleared the Limited Insolvency Examination. of 10


3. The IBBI in Association with Federation of Indian Chambers of Commerce and Industry (FICCI) organized

an event on July 29, 2017 on the topic ‘Decoding the Insolvency and Bankruptcy Code’. The speakers for

the event were: Mr. Siddharth Birla, Chairman Xpro India Ltd and Digjam Ltd; Mr. M. S. Sahoo, Chairperson

IBBI; Hon’ble Justice Mr. A. K. Sikri, Justice, Supreme Court; Mr. Virender Ganda, Senior Advocate and

President, NCLT and NCLAT Bar Association; Mr. Sumant Batra, President, SIPI; Mr. Amardeep Singh Bhatia,

Joint Secretary, Ministry of Corporate Affairs and Ms. Suman Saxena, Whole Time Member, IBBI. The spirit

of the event was to discuss the changes in the era of Indian Economy with the introduction of Insolvency

and Bankruptcy Code, 2016. It was discussed that the law has complimented the concept of ‘ease of doing

business’. Also it was well said that mere passing of Insolvency examination is not sufficient, one must

understand the law very well in order to be appointed as an Insolvency Professional. We need to think as a

professional, individual’s decision can affect credibility of the entire Profession.

_____________________________________________________________________________________

Conference

On 24th and 25th August, 2017 a conference is going to be held in Singapore at the initiative of INSOL India

where many latest cutting edge views would be exchanged and shared.

______________________________________________________________________________________

Registered Insolvency Professionals

Till date there are 581 IP’s registered under Regulation 7 read with regulation 5 of Insolvency and

Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016.

MCQ’s Section

This is to bring to your kind notice that the MCQ section provided earlier is now closed as we hope that

as of now there is good clarity about IBC.

Also for MCQ’s and Mock test paper you can visit following links:

http://www.icsi.edu/InsolvencyProfessionalsAgency.aspx

http://www.icsi.in/OnlineMockTest/RegistrationPage.aspx

http://elearning.iiipicai.in/

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Answers to previous Edition Queries:

1)B 2)D 3)A 4)B 5)D 6)A 7)A 8)B 9)B 10)B

http://www.icsi.edu/InsolvencyProfessionalsAgency.aspx

https://u2186533.ct.sendgrid.net/wf/click?upn=uREuIGUbUFAISt9JMqtrGkbH7xKg3ntZGXAVknyHot5SV8yGW-2FRxT9uF3PDUVaEPLs-2FmZt2r1BKFi9axlhY7gInafr8XHesiFYTixQqoibb5U70rglTZ6n784keyNtsOsC1cTuofcIeano4TgSJC-2BwWz03d8FCikWc3oiHTZF2-2Fkv608RDq4wX6lwAREJXsiw2swRun5KtVZTGM3Ot6y3g-3D-3D_bTktbvJYIDvTpIT-2B862jRf3QdZEvEu11cVf1Cn2e16S-2BoiqE1ytMvUsoVJ5yFxbPdMkxogSxqP2Qxs3GkuyWky1AGuZq77VHbAHmD8c-2FWLKhYPzVNXCr2O675oAUA5cBN8TaJXbES9KjnPtb-2FvLJYR5mb2S040WiryjgibndMpKVdKwyMUNGXwCCLVdPuoJ-2BY7ALmmiFE47Sc21w-2BEdUiQB20CYrb75plzpfnx14ChtCVB12MZN8HCEs4e2bJqG1IHagAxq1WELuFzq5hN3T8o1cZgHGFt5jd5buDKPhdPfw4120ZZ9zPzKcyAiYG8zQC3jSYP8LvkBh-2FuSH2STkn7kCiV65MIICpc1qmmhFDJSLnpQefWg5ilHQzA1f8eptd9phC4LzPv-2FDAyly4I2MZg-3D-3D

http://elearning.iiipicai.in/

We may be contacted at the following offices:

Vol 10th: July 03, 2017-July 09, 2017

CORPORATE OFFICE C-100, Sector-2, Noida- 201301 Uttar Pradesh M: +91- 120-4354696/4354697

REGISTERED OFFICE 73, National Park Lajpat Nagar IV, New Delhi - 110024 INDIA P: +91-11-41729056-57, 41729656/57

GURGAON 605, Suncity Business Tower Golf Course Road, Sector-54, Gurgaon, Haryana - 122002 P: +91-124-4245110/116/117 +91-124-4245111

MUMBAI Haware Infotech Park, 7th Floor, Office No. 704. Sector 30A, Vashi, Navi Mumbai – 400703 P: 022 – 65515507/08 M: +91- 9022131399

ASSAM House No. 76, Near Godrej Interio, Forest Gate, P.O. Narangi, Guwahati – 781026 P: +91-0361-2552302 M: +91-9864857565

SINGAPORE

1 North Bridge Road #10-09 High Street Centre Singapore-(179094)

For enquiries related to:

• Insolvency Process,

• Bankruptcy Process,

• Filing petition with NCLT/DRT,

• Appointment of Insolvency Professionals,

• Assets Management of the Company,

• Fresh Start Process,

• Hearing of Cases or any other enquiries

Please write us at: [email protected], [email protected]

Disclaimer: This e-bulletin is for private circulation only. Views expressed herein are of the editorial team. ASC or any of its employees do not accept any liability whatsoever direct or indirect that may arise from the use of the information contained herein. No matter contained herein may be reproduced without prior consent of ASC. While this e-bulletin has been prepared on the basis of published/other publicly available information considered reliable, we do not accept any liability for the accuracy of its contents.

© ASC Group 2015. All rights reserved.

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Vol 11th: Aug 01, 2017-Aug 31, 2017 · Vol 11th: August 01, 2017-August 31, 2017 FEW FINAL ORDERS...

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