Finality Of Resolution Plans Under IBC And Pending Legal Proceedings

The Supreme Court in its recent decision in Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Limited, has interpreted the binding nature of resolution plans on the various stakeholders of a corporate debtor and in Para 95 held as follows: "(i) That once a resolution plan is duly approved by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and...

Claim Of Refund Of Advance Payment- Whether An 'Operational Debt' Under The Insolvency & Bankruptcy Code, 2016

CLAIM OF REFUND OF ADVANCE PAYMENTWHETHER AN 'OPERATIONAL DEBT' UNDER THE INSOLVENCY & BANKRUPTCY CODE, 2016 Introduction Ever since the Insolvency and Bankruptcy Code, 2016 ("the Code") has come into effect, many vexed questions of law regarding the interpretation of various provisions of the Code have arisen, many of which have come to be settled by orders passed by the National Company Law Tribunals ("NCLT"), the National Company Law Appellate Tribunal ("NCLAT") as well as...

Insolvency Law in Review – May 2021

The enactment of the Insolvency and Bankruptcy Code 2016 (Code) has had significant ramifications on the corporate insolvency landscape. Over time, the Code has witnessed a manifold increase in litigation, and consequently in the number of decisions. This has made it difficult for insolvency practitioners to stay updated with developments in the field. This column fills this gap by providing brief summaries of latest decisions from the various fora dealing with Insolvency Law. These...

Formation of the Committee Of Creditors under the Insolvency and Bankruptcy Code: A Visible Collusion

The Insolvency and Bankruptcy Code, with the primary motive of rehabilitation of financially distressed corporates, came into force with effect from 1st December 2016. The National Company Law Tribunal was constituted through a notification dated 1.06.2016 to pursue the afore goals. The Code empowered Insolvency Professionals and Committee of Creditors to exercise the most vital functions to resolve the debt-ridden corporate debtor. Though the powers and duties of resolution professionals...

Secured Creditor Can't Challenge Resolution Plan Insisting That Higher Amount Should Be Paid Based On Security Interest : Supreme Court

It is not the intent of IBC that a security interest available to a dissenting financial creditor over the assets of the corporate debtor gives him some right over and above other financial creditors so as to enforce the entire of the security interest.

Relevance Of Doctrine Of Priority In Liquidation Under Insolvency & Bankruptcy Code

It is a well established principle that where conflicting, but equal interests have been created in favour of multiple persons, it should be determined based on the maxim qui prior est tempore potior est jure, i.e., he who is earlier in time is stronger in law. This principle has been incorporated under the Transfer of Properties Act, 1882, as Section 48, which provides that where a person purports to create by transfer at different times, rights in or over the same immovable property,...

"Is Stock Broking Company A Financial Service Provider Under IBC?" NCLAT To Examine

The National Company Appellate Tribunal (NCLAT), New Delhi has recently agreed to examine a serious question of law i.e. whether a stock broking company should be considered as a Financial Service Provider under Section 3(16) of the Insolvency and Bankruptcy Code, 2016 and should be kept out of the purview of the Insolvency and Bankruptcy Code, 2016 ("IBC")? The development came while the...

Process Analysis Of Pre-Packs: The Next Step In The Evolution Of Insolvency Regime In India

The enactment of the Insolvency and Bankruptcy Code, 2016 ('the Code') provided a new insolvency regime to the country in order to resolve the corporates and individuals, undergoing financial distress, in a time bound manner. Given the fact that the market for the new professions created by the Code have sufficiently matured and the processes introduced by it have adequately evolved, the Government found it feasible to explore new initiatives in order to further improve the effectiveness...

NCLAT: Liquidation Proceedings Quashed On The Ground That Sole Decision Of Related Parties Financial Creditors Could Be Fatal For The Existence Of The Corporate Debtor

The Principal Bench of the National Company Appellate Law Tribunal at Delhi comprising of Justice A.I.S. Cheema and Justice V. P. Singh, quashed the liquidation proceedings against the Corporate Debtor- 'INCAB Industries Limited and directed to appoint another IRP/ Resolution Professional in place while restoring the application u/S. 9 of the Insolvency Bankruptcy Code, 2016 to...

BR Foundation: Webinar On "How To Make A Career In IBC?" [19th-20th June 2021]

BR Foundation is conducting a webinar on "How to make a career in IBC?" from 19th-20th 2021. The media partner for the webinar is IBC Law reporter. Eminent Speakers: ● Mr Bahram N Vakil | Founder & Senior Partner, AZB & Partners. He is the keynote speaker for the webinar who has also been a member of the Bankruptcy Law Reforms Committee and is currently serving on...

Insolvency Law In Review – April 2021

The enactment of the Insolvency and Bankruptcy Code 2016 (Code) has had significant ramifications on the corporate insolvency landscape. Over time, the Code has witnessed a manifold increase in litigation, and consequently in the number of decisions. This has made it difficult for insolvency practitioners to stay updated with developments in the field. The purpose of this column is to fill this gap by providing brief summaries of latest decisions, from the various fora dealing with...

Delayed Submission Of Claim By Operational Creditor In Liquidation Process

During the procedure of insolvency resolution, if the resolution plan fails, the corporate debtor is liquidated. Under S.33 of Chapter III of the Insolvency and Bankruptcy Code, 2016 ("Code"), which deals with liquidation process, the National Company Law Tribunal ("NCLT") orders the liquidation of corporate debtor and a liquidator is appointed as per section 34 of the Code. Regulation 12 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 ("Regulations")...