Corporate Law Daily
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In the instant case, the CIRP was initiated against the corporate debtor and the appellant was appointed as Resolution Professional (RP). Thereafter, the appellant filed an application u/s 66 of the IBC before the Adjudicating Authority (NCLT) on the ground that the director of the corporate debtor remitted a sum of Rs. 70.82 crores from the bank account of the corporate debtor into the bank account of the respondent – R1.
This was a fraudulent transaction carried out to defraud creditors of the corporate debtor. The appellant submitted that the respondents were liable to contribute a sum of Rs. 75.63 crores together with 18% interest to the assets of the corporate debtor.
However, the National Company Law Tribunal (NCLT) vide impugned order dismissed the said application on the ground that the appellant failed to prove the dishonest intention of respondents to defraud creditors. Further, no documentary proof had been filed in support of the same.
Thereafter, an appeal was made to the National Company Law Appellate Tribunal (NCLAT) against the order passed by the National Company Law Tribunal (NCLT).
The appellant contended that the Adjudicating Authority had committed an error in not appreciating the conduct of the respondents in diverting the receivables of the corporate debtor which were specifically charged to the creditors of the corporate debtor.
The NCLAT held that since there were no convincing tangible/documentary materials to fortify the plea of the appellant that the business of the corporate debtor was carried out by the respondents with a dishonest intention and to defraud creditors, the order passed by NCLT was free from any legal infirmity.
Consequently, the appeal was to be dismissed.
Reg 31A of the IBBI (Liquidation Process) Regulations, 2016 provides that where the liquidator takes a decision different from the advice given by the Stakeholder’s Consultation Committee (SCC), he shall record the reasons for the same in writing and submit the records, to the Adjudicating Authority and to the Board. Now, the IBBI has specified the proforma for reporting.
The Board has made available an electronic platform at www.ibbi.gov.in, for reporting the liquidator’s decisions different from the advice given by the SCC. The proforma for the reporting has been given as an annexure to the circular.
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Further, the insolvency professionals are directed to make use of the notified proforma for reporting to the Board and Adjudicating Authority, under proviso to sub-regulation (10) of regulation 31A.
Presently, in case an investor has a grievance, she may lodge a complaint with the concerned intermediary, Market Infrastructure Institution (MII) or SCORES, for resolution. Now, SEBI has released a consultation paper on strengthening the Investors’ Grievance Redressal Mechanisms by harnessing Online Dispute Resolution Mechanisms.
The SEBI proposes strengthening the existing Market Infrastructure Institutions (MIIs) administered mediation and arbitration mechanism by the following –
(a) By suggesting that these processes are conducted online on an end-to-end basis using the capacity, technology, and other assistance of online dispute resolution institutions;
(b) By modifying these processes for the benefit of the investor.
SEBI further proposes to make the grievance redressal process more simplified, streamlined and efficient for investors. Also, extending the MIIs administered mediation and arbitration mechanism for resolution of investor/client grievances in respect of all specified securities market intermediaries. The last date for submission of public comments is 09-01-2023.
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
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