On the cancellation of the decision to complete the out-of-court bankruptcy procedure and declare bankruptcy
No. 6001-24-00-6ap/1867 dated February 06, 2025
Plaintiff: The Bank
The defendant: Russian State Institution "State Revenue Administration" (hereinafter referred to as the Department)
The subject of the dispute: on the cancellation of the decision of October 13, 2023 on the completion of the out-of-court bankruptcy procedure and declaring M. bankrupt
Review of the plaintiff's cassation complaint PLOT:
On March 20, 2007, debtor M. received a bank loan secured by the purchased car (car loan).
By a court decision dated June 3, 2016, debts in the amount of 1,032,909 tenge were recovered from M. in favor of the Bank.
The debt owed to the Bank has not yet been repaid.
On April 12, 2023, the debtor filed an application via an online resource for the application of an out-of-court bankruptcy procedure to him.
On May 4, 2023, the defendant issued a notice of the commencement of out-of-court bankruptcy proceedings. On September 6, 2023, the plaintiff applied to the Office for termination of out-of-court bankruptcy proceedings against the debtor, but this was refused.
On October 13, 2023, by a decision of the Management, M. was declared bankrupt with the termination of the out-of-court bankruptcy procedure.
Judicial acts:
1st instance: the claim is satisfied. The decision of October 13, 2023 on the completion of the out-of-court bankruptcy procedure and declaring M. bankrupt was declared illegal and canceled.
Appeal: the decision of the first instance is left unchanged.
Cassation: judicial acts are cancelled, the claim is denied.
Conclusions: the local courts granted the claim because the debtor did not comply with the requirements of the Law of the Republic of Kazakhstan "On the Restoration of Solvency and Bankruptcy of Citizens of the Republic of Kazakhstan" (hereinafter referred to as the Law), the administrative authority did not verify the accuracy of the information provided, the debtor had collateral, there were no procedures for the settlement of obligations, and the next repayment of debt interrupted the five-year period of default.
The Law regulates public relations arising from the insolvency of a citizen of the Republic of Kazakhstan, establishes the grounds for the application of the procedure for restoring solvency, as well as the procedures for out-of-court and judicial bankruptcy, the procedure and conditions for their conduct.
According to article 18 of the Law, information providers are banks and organizations engaged in banking operations.
In accordance with the provisions of paragraph 1 of Article 5 of the Law, the grounds for filing an application for out-of-court bankruptcy with the authorized body are the existence of obligations not exceeding 1,600 times the monthly calculation index established by the law on the republican budget and effective on the date of filing the application, as well as compliance with the following conditions:
lack of ownership of property, including property in common ownership;
There is no repayment for the obligations to creditors specified in the application within twelve consecutive months as of the date of filing such an application.;
The creditor and the debtor have conducted procedures for the settlement and (or) recovery of outstanding obligations under the bank loan agreement and (or) the microcredit agreement in accordance with the laws of the Republic of Kazakhstan "On Banks and Banking Activities in the Republic of Kazakhstan" and "On Microfinance Activities". The measures for debt settlement and (or) debt collection specified in this subparagraph must be carried out within a period not exceeding eighteen months from the date of occurrence of overdue debt.;
non-application of out-of-court or judicial bankruptcy proceedings for seven years as of the date of filing the application.
At the same time, paragraph 3 of Article 5 of the Law establishes an exception to the above-mentioned rules of paragraph 1 of this article, according to which the debtor has the right to file an application if the period of default exceeds five years as of the date of filing the application.
Thus, the literal content of article 5 of the Law allows us to conclude that if the debtor fails to fulfill an obligation for more than five years as of the date of filing the application, the conditions set out in paragraph 1 of Article 5 of the Law (in terms of the amount of the obligation, the availability of property, procedures for the settlement and (or) recovery of outstanding obligations) are not subject to accounting..
This interpretation of the Law is also confirmed by the wording of paragraph 1 of Article 18 of the Law, introduced by the Law "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Minimizing Risks in Lending, Protecting Borrowers' rights, improving Financial market regulation and Enforcement Proceedings" dated June 19, 2024, according to which the requirements of subparagraphs 1), 2) and 4) of the first part of paragraph 1 of Article 18 of the Law do not apply to debtors, who applied the procedure of out-of-court bankruptcy on the basis of paragraph 3 of Article 5 of this Law.
By virtue of the requirements of paragraph 3 of Article 16 of the Law, if the debtor complies with the circumstances provided for in Article 5 of this Law, the authorized body shall post information about the debtor on the e-government web portal within fifteen working days.
Since the debtor M. complied with the requirements set out in paragraph 3 of Article 5 of the Law, the tax authority lawfully decided to complete the out-of-court bankruptcy procedure and declare the debtor bankrupt.
No facts of non-compliance with the requirements specified in article 18 of the Law (conditions for termination of the out-of-court bankruptcy procedure) have been identified. At the same time, the local courts unreasonably took into account the payment in the amount of 125 tenge as confirmation of the debtor's solvency, since the debtor did not perform such actions, and the specified amount cannot serve as confirmation of his solvency.
Therefore, the five-year default period was not interrupted.
Amendments to the Law of June 19, 2024, improving the situation of citizens, including the exemption of debtors from the need to attach documents on debt settlement measures, apply to M.
Thus, the conclusions of the local courts on the illegality of the contested decision are incorrect.
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