IBC News
IBC | After Moratorium, Creditor Cannot Appropriate Pre-CIRP Dues From Earlier Security Deposit Made By Corporate Debtor : Supreme Court
The Supreme Court has observed that once a moratorium is imposed, a corporate debtor's pre-CIRP dues cannot be set off against a deposit held by the creditor. The Court held that until such deposit is lawfully adjusted, it continues to remain the property of the corporate debtor, and any appropriation after the moratorium would be impermissible in law. “The deposit made even if treated as...
IBC | Primacy Of Commercial Wisdom Doesn't Mean Every Decision Of CoC Will Be Immune From Judicial Scrutiny : Supreme Court
The Supreme Court has underscored that while the commercial wisdom of the Committee of Creditors remains paramount, it is not immune from judicial scrutiny where issues of statutory illegality or jurisdictional error arise. “…it is necessary to state that primacy of commercial wisdom does not mean that every action taken in the insolvency process is altogether immune from scrutiny in...
Set-Off Can Be Raised As Defence Against Corporate Debtor Though Resolution Plan Bars Future Settlements : Supreme Court
The Supreme Court has held that while claims not included in an approved resolution plan under the Insolvency and Bankruptcy Code, 2016 stand extinguished, a limited plea of set-off can still be raised as a defence in arbitral proceedings, provided it does not result in any affirmative recovery.A bench of Justice Dipankar Datta and Justice Augustine George Masih partly allowed an appeal filed...
NCLAT Order Not Invalid Merely Because Bench Had Majority Technical Members : Supreme Court
The Supreme Court has held that an order of the National Company Law Appellate Tribunal (NCLAT) cannot be treated as illegal merely because the bench deciding the case had a majority of technical members. The Court clarified that the present statutory framework governing the tribunal system does not mandate that judicial members must outnumber technical members in NCLAT benches.A bench...
IBC | Supreme Court Cautions Against Excessive Judicial Review, Criticises Trend Of Unsuccessful Bidders Seeking To Reopen CoC Decision
The Supreme Court today criticised growing trend of unsuccessful resolution applicants converting challenging almost every commercial decision of the Committee of Creditors under the guise of procedural impropriety and turning the insolvency process into a protracted adversarial contest.“The appeals before us typify the growing strategic use of the judicial system by unsuccessful...
IBC Permits Parallel CIRP Against Debtor & Guarantor For Same Debt : Supreme Court
The Supreme Court on Thursday (February 26) observed that there's no bar under the Insolvency and Bankruptcy Code to initiate simultaneous CIRP against the corporate debtor and guarantor for the same debt. The bench of Justices Dipankar Datta and Augustine George Masih endorsed the findings of BRS Ventures Investments Ltd. v. SREI Infrastructure Finance Ltd. & Anr that "consistent with...
IBC | Mere Pendency Of Restructuring Arrangements Cannot Stall CIRP : Supreme Court
The Supreme Court on Tuesday (February 24) has observed that merely because an arrangement of restructuring a debt-laden corporate debtor is in place, would not bar initiation of a CIRP under the Insolvency and Bankruptcy Code. A bench of Justices Sanjay Kumar and K Vinod Chandran set aside the NCLAT's decision, which had rejected a Section 7 IBC application on the premise that a...
IBC | Defunct Scheme Of Arrangement Under Companies Act Cannot Stall Corporate Insolvency Resolution Process : Supreme Court
The Supreme Court on Tuesday (February 24) held that a defunct Scheme of Arrangement under the Companies Act cannot stall the Corporate Insolvency Resolution Process proceedings under the Insolvency & Bankruptcy Code, 2016. A bench of Justices Sanjay Kumar and K Vinod Chandran set aside the NCLAT's decision, which had kept in abeyance the CIRP initiated under Section 7 of IBC against...
Bank's Internal Classification Of Debt As NPA Won't Determine Limitation Under IBC: Supreme Court
The Supreme Court on Thursday clarified that a bank's internal classification of a loan as a non-performing asset for accounting or provisioning purposes does not by itself determine the commencement of limitation under the Insolvency and Bankruptcy Code, especially where the debt has subsequently been restructured and acknowledged through fresh agreements.The Court observed that the manner...
Telecom Spectrum Community Resource, IBC Can't Determine Its Ownership & Control : Supreme Court
The Supreme Court today held that the ownership and control of telecom spectrum cannot be determined by the Insolvency and Bankruptcy Code (IBC), since it is a common good. A bench of Justice PS Narasimha and Justice Atul Chandurkar held that the spectrum is a material resource of the community in the Constitutional sense. Hence, the spectrum must benefit the common good, so its control...