{"id":566,"date":"2020-04-23T10:30:01","date_gmt":"2020-04-23T10:30:01","guid":{"rendered":"http:\/\/lexforti.com\/legal-news\/?p=566"},"modified":"2021-01-17T04:34:40","modified_gmt":"2021-01-17T04:34:40","slug":"the-committee-of-creditors-are-responsible-to-solve-the-matter-when-the-said-committee-is-formed-as-per-the-regulations-of-the-insolvency-and-bankruptcy-board-of-india-regulations-2016","status":"publish","type":"post","link":"https:\/\/lexforti.com\/legal-news\/the-committee-of-creditors-are-responsible-to-solve-the-matter-when-the-said-committee-is-formed-as-per-the-regulations-of-the-insolvency-and-bankruptcy-board-of-india-regulations-2016\/","title":{"rendered":"The Committee of Creditors are responsible to solve the matter when the said committee is formed as per the regulations of the Insolvency and Bankruptcy Board of India Regulations, 2016"},"content":{"rendered":"\n<p>Lahari Gurrala | Symbiosis Law School, Hyderabad | 4th February 2020<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_47_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"ez-toc-toggle-icon-1\"><label for=\"item-6a226208155d2\" aria-label=\"Table of Content\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-6a226208155d2\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/lexforti.com\/legal-news\/the-committee-of-creditors-are-responsible-to-solve-the-matter-when-the-said-committee-is-formed-as-per-the-regulations-of-the-insolvency-and-bankruptcy-board-of-india-regulations-2016\/#Vinay_Kumar_Mittal_Ors_vs_Dewan_Housing_Finance_Corporation_Ltd_Ors_Civil_Appeal_No654_-660_of_2020\" title=\"Vinay Kumar Mittal &#038; Ors.\u00a0vs Dewan Housing Finance Corporation Ltd. &#038; Ors. Civil Appeal No.654 -660 of 2020\">Vinay Kumar Mittal &#038; Ors.\u00a0vs Dewan Housing Finance Corporation Ltd. &#038; Ors. Civil Appeal No.654 -660 of 2020<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/lexforti.com\/legal-news\/the-committee-of-creditors-are-responsible-to-solve-the-matter-when-the-said-committee-is-formed-as-per-the-regulations-of-the-insolvency-and-bankruptcy-board-of-india-regulations-2016\/#Facts_of_the_Case\" title=\"Facts of the Case:\">Facts of the Case:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/lexforti.com\/legal-news\/the-committee-of-creditors-are-responsible-to-solve-the-matter-when-the-said-committee-is-formed-as-per-the-regulations-of-the-insolvency-and-bankruptcy-board-of-india-regulations-2016\/#Issue\" title=\"Issue:\">Issue:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/lexforti.com\/legal-news\/the-committee-of-creditors-are-responsible-to-solve-the-matter-when-the-said-committee-is-formed-as-per-the-regulations-of-the-insolvency-and-bankruptcy-board-of-india-regulations-2016\/#Held\" title=\"Held:\">Held:<\/a><\/li><\/ul><\/nav><\/div>\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Vinay_Kumar_Mittal_Ors_vs_Dewan_Housing_Finance_Corporation_Ltd_Ors_Civil_Appeal_No654_-660_of_2020\"><\/span><strong>Vinay Kumar Mittal &#038; Ors.\u00a0vs Dewan Housing Finance Corporation Ltd. &#038; Ors.<\/strong> <strong>Civil Appeal No.654 -660 of 2020<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Facts_of_the_Case\"><\/span><strong>Facts of the Case:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Reliance Nippon Life Asset Management Ltd. (hereinafter referred to as, \u2018Respondent No.4\u2019) filed Commercial Suit for recovery of a sum of Rs.479,31,29,113\/- along with interest at the rate of 18 percent. In a nutshell, the case of Respondent No.4 is that it subscribed to Non-Convertible Debentures (NCDs) of Dewan Housing Finance Corporation Limited (DHFL, hereinafter referred to as, \u2018Respondent No.1\u2019) to the tune of Rs.63,41,72,000\/, that were issued through a public offer.\u00a0<\/p>\n\n\n\n<p>In 2017-2018, Respondent No.4 further subscribed to NCDs of Respondent No.1, aggregating to Rs.365 crores, issued on a private placement basis. Respondent No.4 became entitled to early redemption of private placement NCDs in March, 2019 due to the down grading in ratings of the NCDs issued by Respondent No.1. Respondent No.1 failed to pay the entire amount towards the early redemption.\u00a0<\/p>\n\n\n\n<p>By an order dated 30.09.2019, the High Court of Judicature at Bombay restrained Respondent No.1 from making further payments disbursements to any unsecured creditors and secured creditors except in cases where payments are to be made on a pro-rata basis to all secured creditors out of its current and future receivables in preference to the payments owed to Respondent No.4.By an order dated 10.10.2019, the High Court directed the continuance of the order passed on 30.09.2019 till the disposal of the motion.\u00a0<\/p>\n\n\n\n<p>Similar orders were passed in the interim applications filed in the other commercial suits by orders dated 17.10.2019, 08.11.2019 and 13.11.2019. It was clarified by the High Court on 13.11.2019 that Respondent No.1 shall not be prevented from making any payments overdue or payable under the assignment agreements in favour of any or all such banks or assignees of loans.\u00a0<\/p>\n\n\n\n<p>The Appellants are depositors who invested in fixed deposits with the Respondent No.1-DHFL. Having been aggrieved by the interim orders passed by the High Court and the Debts Recovery Tribunal-I, Mumbai restraining Respondent No.1 from making any payments towards their fixed deposits, the Appellants challenged the orders of the High Court with the leave of this Court.\u00a0<\/p>\n\n\n\n<p>The learned counsel appearing for the\u00a0Reserve Bank of India submitted that the Reserve Bank of India has filed an application before the National Company Law Tribunal Mumbai to initiate the Corporate Insolvency Resolution Process (CIRP) against Respondent No.1. The learned counsel has\u00a0\u00a0also informed this Court that an order was passed by the NCLT on 03.12.2019, imposing moratorium under Section 14 of the IBC prohibiting the institution of any suit or continuation of proceedings or execution of any decree against the Financial Service provider i.e. DHFL and transferring, alienating or disposing of any asset of DHFL and any action to foreclose, recover or enforce any security interest created by DHFL in respect of its property with effect from the date of filing the application i.e. 29.11.2019 till the completion of the Corporate Insolvency Resolution Process.<\/p>\n\n\n\n<p>The Reserve Bank of India appointed Mr.R. Subramaniakumar as the Administrator of Respondent No.1. On 29.11.2019, the RBI filed a petition to initiate the corporate insolvency resolution process against Respondent No.1 under Rule 5 of the FSP Rules. The NCLT confirmed the name of Mr. R. Subramaniakumar, Administrator and directed him to perform all the functions of Resolution Professional and to complete the insolvency resolution process.\u00a0<\/p>\n\n\n\n<p>The High Court took note of the fact that the moratorium shall operate from the date of the filing of the application i.e. 29.11.2019. The High Court granted liberty to the parties before the Court to approach the NCLT for redressal of their grievances.\u00a0<\/p>\n\n\n\n<p>The Administrator was permitted to cause a public announcement intimating the initiation of corporate insolvency resolution process and calling for admission of claims as prescribed in Section 15 of the IBC. The NCLT referred to the Appellants in its order dated 03.12.2019 and directed the Administrator to update the list of depositors along with the outstanding amounts payable to each one along with their address and communication information so that in future their interests can be taken care of, along with other stake-holders.\u00a0<\/p>\n\n\n\n<p>Consequently, the Administrator made a public announcement. On 04.12.2019, public depositors were included as a class of creditors. Three names of insolvency professionals were proposed by the Administrator and the public depositors were required to select one of three persons to act as their authorized representative.<\/p>\n\n\n\n<p>The first meeting of the committee of Creditors was held during which it was decided that Respondent No.1-Corporate Debtor can commence disbursement of loans to the tune of Rs.500 crores per month. It was also resolved in the said meeting of the Committee of Creditors that the interests of the depositors shall be taken into account, in accordance with the provisions of the IBC.\u00a0<\/p>\n\n\n\n<p>The Appellants filed an Interlocutory Application seeking a direction to restrain Respondent No.1 from commencing its lending operations till the matured deposits of the depositors are duly paid.\u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Issue\"><\/span><strong>Issue:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul><li>Whether the claims made by the depositors should be considered or not ?<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Held\"><\/span><strong>Held:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The court observed that the claims that are made by the depositors shall be considered by the Committee of Creditors and the Administrator without being influenced by the orders passed by the High Court on 10.10.2019 as modified by order dated 13.11.2019, as well as the order passed by the Debts Recovery Tribunal-I, Mumbai on 08.11.2019.\u00a0<\/p>\n\n\n\n<p>It was held that as the\u00a0depositors are being represented by the Authorized Representative before the Committee of Creditors, it is open to the Appellants to raise all points and contentions before the Committee of Creditors, the Administrator and if necessary, the NCLT. In the view of the above the court is not inclined to interfere with the decision of the Committee of Creditors taken on 30.12.2019. it was also observed that there are nearly one lakh depositors who have invested their life time earnings with Respondent No.1. Some of the deposits have matured and some of the depositors are critically ill. There is no doubt that the concerns of the depositors and their rights shall be considered in accordance with law.\u00a0<\/p>\n\n\n\n<p>The appeals are, accordingly disposed of.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Lahari Gurrala | Symbiosis Law School, Hyderabad | 4th February 2020 Vinay Kumar Mittal &#038; Ors.\u00a0vs Dewan Housing Finance Corporation Ltd. &#038; Ors. Civil Appeal No.654 -660 of 2020 Facts of the Case: Reliance Nippon Life Asset Management Ltd. (hereinafter referred to as, \u2018Respondent No.4\u2019) filed Commercial Suit for recovery of a sum of Rs.479,31,29,113\/- [&hellip;]<\/p>\n","protected":false},"author":150,"featured_media":373,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[26],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.8.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Committee of Creditors are responsible to solve the matter when the said committee is formed as per the regulations of the Insolvency and Bankruptcy Board of India Regulations, 2016 - LexForti<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lexforti.com\/legal-news\/the-committee-of-creditors-are-responsible-to-solve-the-matter-when-the-said-committee-is-formed-as-per-the-regulations-of-the-insolvency-and-bankruptcy-board-of-india-regulations-2016\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Committee of Creditors are responsible to solve the matter when the said committee is formed as per the regulations of the Insolvency and Bankruptcy Board of India Regulations, 2016 - LexForti\" \/>\n<meta property=\"og:description\" content=\"Lahari Gurrala | Symbiosis Law School, Hyderabad | 4th February 2020 Vinay Kumar Mittal &#038; Ors.\u00a0vs Dewan Housing Finance Corporation Ltd. &#038; Ors. 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Civil Appeal No.654 -660 of 2020 Facts of the Case: Reliance Nippon Life Asset Management Ltd. 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