The Insolvency Appellate Tribunal (NCLAT) on Wednesday said its jurisdiction with the NCLT under the framework of the Insolvency and Bankruptcy Code (IBC) should be examined as per the observation passed by the Supreme Court in a case in 2021. “At this juncture, the jurisdiction of NCLT and NCLAT in the framework of IBC should be examined on the criterion of Arun Kumar Jagatramka v. Supreme Court. Jindal Steel and Power Ltd…” the two-member NCLAT bench said.
The Supreme Court in 2021 in the case of Arun Kumar Jagatramka v Jindal Steel & Power had offered caution to the NCLT and NCLAT, which were acting as judicial authority and appellate authority respectively under the IBC, adjudicating its By interfering with the framework envisaged under. IBC. The top court had said that the IBC was introduced to reform the insolvency and insolvency system in India.
Thus, it is a carefully thought out and well thought out legislation that seeks to do away with the practices of the past and the government is also working to ensure that the effectiveness of this law remains strong by continuously amending it based on . Experience. “Consequently, the need for judicial intervention or innovation from the NCLT and the NCLAT should be kept to a minimum and should not violate the fundamental principles of the IBC,” the Supreme Court had said.
The observations of the National Company Law Appellate Tribunal (NCLAT) came partly while allowing a petition by John Cockerill India, an operational creditor of Asian Color Coated Ispat, to JSW Steel Coated, a wholly owned subsidiary of JSW Steel, in October 2020. Products have been transferred. In a deal worth Rs 1,550 crore. The NCLAT had said that more than two years have elapsed since the resolution plan was approved and there is a contrast between the parties John Cockerill and JSW Steel regarding the possession and ownership of the land owned by the promoter of Asian Color Coated Ispat.
“We find it a fit case to grant liberty to the appellant to proceed in accordance with law at the appropriate forum,” the appellate tribunal said. Here John Cockerill had claimed that the personal property of the promoter, mortgaged to him, could not be made part of the resolution plan as it was not the property of the corporate debtor. The NCLAT also said that it is a peculiar case where Pradeep Agarwal, promoter of Asian Color Coated Ispat, had mortgaged land before bankruptcy to John Cockerill, who was an operational creditor for the debt.
This was mentioned in the claim against Asian Color Coated Ispat after the insolvency commenced and when it went to implement the mortgage deed, the resolution professional stated that the plan was approved by a majority of the CoC. The RP stated that the land is in possession of Asian Color Coated Ispat and is part of the land where the factory is located, whereas the petitioner submitted that it is owned by Pradeep Agarwal and is a vacant vacant land, sharing only a common access path. Khapoli plant.
However, by way of settlement the personal property of the promoter was included in the terms of the settlement. Further, the NCLT through an order dated February 2, 2021 approved the settlement between the promoter and the RP/corporate debtor. The then RP submitted that as per the plan approval order, the recovery percentage due to operational creditors was 2.21 per cent and accordingly an amount of Rs 17.40 lakh was disbursed to John Cockerill. The creditors have been distributed and JSW has taken over the management and custody of the company with effect from October 27, 2020.
John Cockerill, however, argued that the resolution plan could not deal or liquidate his mortgage claims on the individual property without his express consent and that it would be entitled to recover the balance amount of Rs 7.96 crore.
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