One of our raw material supplier (MEPL) filed a case on 8th January 2019 in NCLT, but they couldn't serve notice on us upto 27th August 2019. After receiving their reminder we could only ascertain that the party has filed a case against us in NCLT. We approached NCLT through our advocate and there was no proper hearing done till date and the last date was on 2nd January 2020. REMARK: ORDER on date 02.01.2020 The Learned Representatives for both sides are present and mentioned that settlement talk is going on, and therefore, sought time. Matter is adjourned till 30.01.2020 The matter could not be heard even on 30.01.2020 and after that there was no date received by us. The remarks were as below: Now the Party has filed an interlocutory application on 8th September 2020, for an immediate hearing with the following REMARK: “The above named applicant is seeking circulation of the Company Petition No. 121 of 2019 (Diary No. 217), which was filed on 08.01.2019. Be pleased to circulate the papers and proceedings of Company Petition No. 121 of 2019 for urgent hearing on ________, 2020 at 10:30 am or anytime soon thereafter before the Hon’ble Bench in the National Company Law Tribunal, Mumbai Bench.” The gist of the case is: Party supplied the Raw Material without proper Purchase Orders and quality issues were there so we wanted a settlement for the same. Also part payment was paid to them but cheques were bounced because they deposited the cheques under security without properly settling the issue. At this juncture, such disputed matters can be taken on online hearing or not? Also our Advocate and their Advocate with both of our persons to sit together to settle the issue amicably which may not be possible now as per corona situation. At present, our advocate is representing us and the final date of online hearing has not yet been received so we want to understand the implication of such hearing, possibly stoppage of such hearing or seeking more time. We hope you will comment with your answers. Thanks
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Even if goods have been supplied without PO you have acknowledged receipt of goods
2) if there was defect in quality of goods you ought to have returned the goods
3) if your cheque’s have been dishonoured on presentation it would go against you
4) it can be taken up in online hearing
5) you can seek adjournment and make part payment of amount due and payable
1. It appears you owe the applicant certain sums of money
2. If that is so then you better make the payment as if you don't have any proper defense of the claim of money you can be adjudged insolvent in this summary proceeding.
3. So decide accordingly. Consult with an advocate who knows IBC. All advocates are not conversant with the new IBC.
if it is your case that the material supplied to you was without a proper purchase order or was defective, then did you ever try to return those materials back to the supplier?
in a NCLT petition filed by an operational creditor, upon the petition being admitted, the company or corporate debtor [that is you] does not automatically become adjudged as insolvent
the petition seeks to revive the company from its insolvency because the company could not make its payment and thereby to enable the company to make the payments to its creditors
once the petition is admitted the management of the company is given to a resolution professional appointed by NCLT
If you had issues with the stock supplied to you and despite that you have still retained that stock and have also defaulted in the payment [you could always pay on a without prejudice note or under protest], then there is no escape from your company being taken over by the RP
the applicant has to show some urgency in his application for the petition to be heard for admission
if there is no such urgency then the NCLT will not allow that application and the petition will come up for hearing in normal course or when normal court operations resume
it seems the petitioner has only filed the precipe for urgent hearing but no date has been assigned as yet because the petitioner has not intimated you about the next hearing date so far
if the application is allowed and the petition is heard and the petitioner satisfies the court that the ingredients for corporate insolvency resolution process are met, then you cannot seek any time or adjournment
however you can always take advantage of the stay promulgated by the government against admission of such petitions due to COVID for a certain time. Request your advocate to find that amendment act
Dear Sir/Madam,
You are suggested to approach the concerned bench of the NCLT to confirm whether online hearing is going on or not. Even the advocates and party may not sit for the physical hearing but the talks may be arranged by way of video calls, conference call etc. so that the matter of settlement is kept alive. You are suggested to be in touch and close liaison with your advocate so that everything can be planned and done in advance.
No defective hearing due to corona. Both parties presence is necessary in court.
This is default committed by purchaser - operational creditor filed insolvency proceeding.
Online hearings depends in the availability of facility in the court and also the matter. This is serious matter but not URGENT, so online hearings MAY not be carried out
Hearing before NCLT is through VC. No physical hearing are being insisted upon. No hars orders are being passed by the Tribunal due to COVID-19 pandemic situations.
No ADVERSE order would be passed if both or anyone of both the parties before Tribunal are Absent, adjournment would be granted.
Lockdown is till 3oth September 2020.
Therefore at till 30the September 2020 No ADVERSE orders by Tribunal.
Precepie may have been moved by your opponent therefore you have observed the remark for hearing of the matter in September 2020.
1) How to ask settlement time and stress the process so to gain time for payments. 2) How much time does it takes for RP deputation and its effectiveness after NCLT Final Order (Basically timeframe is to be ascertained) 3) Resolution Professional takes over the board, so directors are asked to leave the premises or may continue at the premises? Also, the residence of directors under the company to be vacated by directors or not?
No effective*
Don`t appear in court. No adverse order may pass.
RP proceeding take 180 days extendible to a maximum of 270 day
Once RP initiated, cahrge will taken by RP.
the residence of directors under the company to be vacated by directors or not? - NO, only RP will charge of administration.
1- By an additional affidavit seek settlement.
2- No time bounds it commence as per situation and merits of the case.
3- You may continue No hard rules until prejudice appears.
You should seek 8 weeks time there is no urgency in the case
2) RP should take charge within a month or so after order
3) residence of directors is not to be vacated
1. just an oral request will do. The court will grant you some reasonable time
2. everything is time bound once the RP is appointed. However if the matter is settled then there is no need for any RP
3. The management of the company is taken over by the RP. The directors are not asked to leave the company premises. It is just that the erstwhile management must not interfere with the RP
4. Dont worry the directors wont be asked to vacate their residence. Its not that harsh
You need to mutually seek it before tribunal.
Process (CIRP)
Section 16: Appointment and tenure of interim resolution professional:
*16. (1) The Adjudicating Authority shall appoint an interim resolution professional 1[on the insolvency commencement date].
(2) Where the application for corporate insolvency resolution process is made by a financial creditor or the corporate debtor, as the case may be, the resolution professional, as proposed respectively in the application under section 7 or section 10, shall be appointed as the interim resolution professional, if no disciplinary proceedings are pending against him.
(3) Where the application for corporate insolvency resolution process is made by an
operational creditor and—
(a) no proposal for an interim resolution professional is made,the Adjudicating Authority shall make a reference to the Board for the recommendation of an insolvency professional who may act as an interim resolution professional;
(b) a proposal for an interim resolution professional is made under sub-section (4) of section 9, the resolution professional as proposed, shall be appointed as the interim resolution professional, if no disciplinary proceedings are pending against him.
(4) The Board shall, within ten days of the receipt of a reference from the Adjudicating Authority under sub-section (3), recommend the name of an insolvency professional to the Adjudicating Authority against whom no disciplinary proceedings are pending.
(5) The term of the interim resolution professional 2[shall continue till the date of appointment of the resolution professional under section 22].
Since the courts are not functioning normally due to the current situation, NCLT is also not an exemption.
He has filed for an advance hearing petition as an urgent petition.
Your advocate will be informed by the court about the developments hence you simply follow it up through your advocate because nothing can be predicted due to the current situation.
Sine the matter is before court it is your advocate who has to discuss with the opposite advocate on such issues.
In the current situation there is no guidelines for such cases with timeline.
Once the RP is into the action he will proceed as per law.
Section 12 (2) of the Code provides that RP shall file an application to the Adjudicating Authority to extend the period of the corporate insolvency resolution process beyond one hundred and eighty days, if instructed to do so by a resolution passed at a meeting of the committee of creditors by a vote of sixty-six percent of the voting shares.
RP should ensure that the resolution approving the extension by Committee of Creditors should have been passed before the expiry of 180 days, although the application for extension may be filed after 180 days.
1. Just don't reply to anything.
2. Cannot be confirmed.
3. Nothing have to be vacated
Dear Sir/Madam,
You are suggested that your advocate may talk to his counterpart of opponent and you may also approach by way of SMS, WhatsApp, letters so that you may produce the same in the court (NCLT) as proof as and when needed. The RP deputation will take place, if no compromise possible. On appointment of IRP, the directors become ineffective and the company is taken over by the IRP and then by RP.
Talk to ur advocate n say file case urgently
Your advocate can ask court to give orders for mediation between parties on next date of hearing so that matter can be solved amicably.
The matter can be settled through video conferencing. If not settled then online hearing can be done by the NCLT.
All this can be settled. The RP takes over and settles all the issues.