- Case
- PIRAMAL CAPITAL AND HOUSING FINANCE LIMITED (FORMERLY KNOWN AS DEWAN HOUSING FINANCE CORPORATION LIM v. 63 MOONS TECHNOLOGIES LIMITED) (Supreme Court of India, 01-04-2025)
- Law
- Insolvency and Bankruptcy Code, Reserve Bank of India Act, Banking Regulation Act, National Housing Bank Act, Companies Act, Indian Evidence Act.
Insolvency and Bankruptcy Code, 2016 (IBC): The judgment extensively discusses several sections of the IBC. Section 7 pertains to the initiation of the Corporate Insolvency Resolution Process (CIRP) by a Financial Creditor. Section 8 pertains to the Insolvency Resolution by Operational Creditor. Section 12 discusses the time period for completion of the CIRP. Section 14 discusses the moratorium. Section 16 provides for the appointment and tenure of the Interim Resolution Professional. Section 17(1)(b) discusses the powers of the Board of Directors of the CD being suspended. Section 18 enumerates the duties of the Interim Resolution Professional. Section 21 empowers the Interim Resolution Professional to constitute a Committee of Creditors (CoC). Section 22 pertains to the Appointment of Resolution Professional. Section 25 enumerates the duties of the Resolution Professional, including filing applications for avoidance of transactions under Chapter III, as per Section 25(2)(j). Section 26 states that filing an avoidance application under Section 25(2)(j) shall not affect the CIRP proceedings. Section 29 requires the Resolution Professional to prepare an information memorandum. Section 29A(c) discusses the disqualification of promoters from being a Resolution Applicant. Section 30 discusses the submission of the Resolution Plan, including requirements for payment of insolvency resolution process costs and debts of operational creditors, and the examination of the resolution plan by the resolution professional. Section 30(2) is discussed in the context of mandatory requirements for the resolution plan. Section 30(4) discusses the approval of a resolution plan by the committee of creditors. Section 31 discusses the approval of the Resolution Plan by the Adjudicating Authority and its binding effect on the corporate debtor and its stakeholders. Section 31(1) discusses the Adjudicating Authority's satisfaction with the resolution plan. Section 32 pertains to the Appeal to be filed from an order approving the RP. Sections 43, 44, 45, 46, 47, 48, 49, 50, and 51 pertain to Avoidance applications under Chapter-III. Section 60(5) discusses the jurisdiction of the Adjudicating Authority (NCLT) for corporate persons. Section 61 provides for Appeals and Appellate Authority. Section 61(3) discusses the grounds for appeal against an order approving a resolution plan. Section 66 pertains to Fraudulent trading or Wrongful trading. Section 67 deals with the proceedings under Section 66. Section 227 read with Section 239 (2) (zk) discusses the filing of a Company Petition before the NCLT for initiating CIRP proceedings. Section 238 states that the provisions of IBC shall have effect, notwithstanding anything inconsistent therewith contained in any other law.
The Reserve Bank of India Act, 1934 (RBI Act): The judgment discusses several sections of the RBI Act. Section 45-IE discusses the supersession of the Board of Directors of a non-banking financial company by the RBI. Section 45-IE (1) empowers the RBI to supersede the Board of Directors of the company in the public interest. Section 45-IE (4)(a) states that upon supersession of Board of Directors, the chairman, managing director and other directors shall vacate their offices. Section 45 (QA) discusses the Power of Company Law Board to order repayment of deposit.
Banking Regulation Act, 1949: No specific sections of the Banking Regulation Act, 1949 are discussed in detail.
The National Housing Bank Act, 1987 (NHB Act): The judgment discusses Section 36(A) of the NHB Act, which relates to the power to order repayment of deposit.
Companies Act, 2013: No specific sections of the Companies Act, 2013 are discussed in detail.
Indian Evidence Act, 1872: Section 74 is mentioned in the context of a Resolution Plan becoming a "Public Document" after approval by the NCLT.
Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016: Regulation 16(A) is mentioned in the context of providing a mechanism for appointment of an Authorized Representative. Regulation 37 of the Regulations requires the RP to provide for the measures, as may be necessary, for Insolvency Resolution of the CD for maximization of value of its assets. Regulation 37A of IBBI (Liquidation Process) Regulations, 2016 is discussed in the context of assignment of not readily realizable assets. Regulation 38 states about the mandatory contents of the RP. Regulation 39 states about the procedure to be followed while approving the Plan.
Financial Service Provider Rules, 2019 (FSP Rules): Rule 5 (d)(i) of FSP Rules is discussed in the context of the RP being compliant with the rule. Rule 10 of the FSP Rules provides that Rule 5(b)(Moratorium) of the FSP Rules and Section 14 of the Code do not apply to any third-party assets.
General Principles of Law: The judgment discusses the principle of commercial wisdom of the Committee of Creditors (CoC) and the limited scope of judicial review over such decisions. It emphasizes that the commercial wisdom of the CoC is paramount and that courts should not interfere with it unless there is a clear violation of law. The judgment also touches upon the principle of unjust enrichment, stating that the key aim of providing certain transactions is to avoid unjust enrichment of some parties in the insolvency at the cost of all creditors.
