Residuary Jurisdiction Of The National Company Law Tribunal Under Section 60(5) Of The Insolvency And Bankruptcy Code, 2016: A Brief Analysis

Pursuant to Section 60(5) of the Insolvency and Bankruptcy Code, 2016 ("Code") the National Company Law Tribunal ("NCLT") is bestowed with the jurisdiction to decide: (i) 'any' application or proceeding against a corporate debtor; (ii) 'any' claim made by or against a corporate debtor including claims by or against its subsidiaries; and (iii) 'any' questions of priority or 'any' question of law or facts, arising out of or in relation to insolvency resolution or liquidation proceedings of...

Will Arbitral Award-Holder's Claim Be Extinguished On Approval Of Award-Debtor's Resolution Plan Under IBC? Yes, Rules Calcutta High Court

On Friday, the Calcutta High Court settled an important question of arbitration law, viz., whether an arbitral award-holder's claim would stand extinguished upon the approval of a Resolution Plan for the award-debtor's revival, when it was not pressed during the Corporate Insolvency Resolution Process (CIRP). Relying on Supreme Court rulings from 2020, Justice Moushumi Bhattacharya...

NCLT Kochi Allows Promoter Of Corporate Debtor MSME To File Resolution Plan In Individual Capacity

The National Company Law Tribunal at Kochi has held that the promoter of an MSME can submit a Resolution Plan Application in his individual capacity, and that the Plan would be eligible to be considered along with those of other prospective Resolution applicants. Judicial Member Ashok Kumar Borah of the NCLT Bench at Kochi recently made this pronouncement on an application made by...

Insolvency Law In Review – March 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...

Whether It Is Mandatory To File A Formal Application For Condonation Of Delay? An Examination Of SC Judgement In Sesh Nath Sing's Case

In Sesh Nath Singh and another v. Baidyabati Sheoraphuli Co-operative Bank Ltd. and another[1] (hereinafter referred to as "Sesh Nath"), the Supreme Court, while recently hearing an appeal under Section 62 of the Insolvency and Bankruptcy Code (hereinafter referred to as "IBC") had the opportunity to deal with an issue of particular significance for litigating lawyers. One of the issues before the Court was whether a delay in filing an application by a financial creditor under Section...

Insolvency Of Personal Guarantors To Companies: An Atmosphere Of Uncertainty

Corporate Insolvency Resolution Process can now be triggered against the personal guarantors of a corporate debtor including the promoters of a corporate person by its creditors through rules notified on 15.11.2019 by the Ministry of Corporate Affairs. The entire set of rules have flooded the gates of Courts all over against the constitutionality of the new provisions with the notification being challenged by almost 100 promoters including the billionaire Industrialists like Arvind Dham,...

Power Under Section 482 CrPC Cannot Be Used To Undermine Statutory Dictate Under Section 14, 17 IBC: Supreme Court

The power under Section 482 of Code of Criminal Procedure cannot be used to overlook the undermining of a statutory dictate, the Supreme Court observed in a judgment delivered on Thursday.In this case, the High Court allowed an interlocutory application filed by a Company claiming to be an operational creditor to allow it to operate its bank account maintained with the ICICI Bank and to...

Balance Sheets Entries Can Amount To Acknowledgement Of Debt U/s 18 Limitation Act: Supreme Court Sets Aside NCLAT Full Bench Ruling

The Supreme Court has held that entries in balance sheets can amount to acknowledgement of debt for the purpose of extending limitation under Section 18 of the Limitation Act.A bench headed by Justice RF Nariman set aside a judgment of Full Bench of National Company Law Appellate Tribunal in the case V Padmakumar v Stressed Assets Stabilization Fund which held otherwise. IssuesThe issue...

Once Resolution Plan Is Approved, No Creditor Can Initiate Proceedings To Recover Claims Not Part Of Resolution Plan : SC Upholds 'Clean Slate Theory'

Insolvency & Bankruptcy Code, 2016 ("IBC") is a legislation aimed at timely resolution of an entity ("corporate debtor") which has defaulted in payment to its creditors (including the statutory authorities). The corporate debtor has to undergo baptism by fire in the form of a Corporate Insolvency Resolution Process ("CIRP"). Once the corporate debtor is admitted into CIRP, it is the...

CIRP Can Not Be Initiated/Admitted As If By Way Of Punishment For Concealing Particular Fact(S): NCLAT Holds

The NCLAT while allowing the Appeal filed by one of the Shareholder, Shri Gyanchand Mutha of Corporate Debtor M/s Arkay International Finsec Limited against M/s Aditya Birla Money Limited (Operational Creditor) while reversing the Order and findings of Ld. NCLT, Jaipur Bench has recently held that CIRP cannot be admitted as by way of punishment for concealing particular facts with a creditor. More particularly when the Company does not fall within the definition of Corporate Debtor and...

NCLT Benches To Switch Back To Virtual Hearings From April 12

Due to sharp increase in COVID-19 cases throughout the country, the National Company Law Tribunal has decided to take up regular hearing through Video Conference w.e.f. 12th April, at all its Benches. The decision comes in supersession of its order dated February 23, for resumption of physical hearings. The Tribunal has notified the Benches that will take up cases through...

Insolvency Amendment- Pre- Pack For MSME's

The Central Government recently promulgated the IBC Amendment Ordinance 2021, allowing a pre-packaged insolvency process for micro, small and medium enterprises (MSMEs), in consonance with international best practices. The ordinance in essence has amended the the Insolvency and Bankruptcy Code 2016 allowing the Central Government to notify such pre-packaged process for defaults of not more than Rs. 1 crore to be initiated by the corporate debtor. The Ordinance inter alia has inserted a...