IBC News
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...
President Promulgates IBC Amendment Ordinance To Allow Pre-Packaged Insolvency Process For MSMEs
The Central Government has promulgated Insolvency and Bankruptcy Code(Amendment) Ordinance 2021 to allow pre-packaged insolvency resolution process for corporate debtors classified as micro, small or medium enterprises under the Micro, Small and Medium Enterprises Development Act, 2006.The Ordinance amends the Insolvency and Bankruptcy Code 2016 to allow the Central Government to notify...
NCLT Bengaluru Bench Permits A Resolution Applicant To Withdraw The Resolution Plan
The NCLT, Bengaluru Bench has allowed a Resolution Applicant, M/s. Kundan Care Products Ltd. to withdraw its Resolution Plan after the same was approved by the Committee of Creditors of the Corporate Debtor, M/s. Sagar Power (Neerukatte) Pvt. Ltd. The Resolution Applicant had moved the NCLT under Section 60(5) of the IBC, after discovering certain 'discrepancies' and 'inaccuracies' in the Information Memorandum and other correspondences issued by the Resolution Professional. It was ...
Person Claiming To Be An Operational Creditor Should Demonstrate Their Claim Can Be Treated As Operational Debt Under The IBC: NCLT
The Kochi Bench of the National Company Law Tribunal has underscored the importance of examining the nature of debt involved in a transaction before a Corporate Insolvency Resolution Proceeding (CIRP) is instituted upon an application to the effect. Judicial Member Ashok Kumar Borah iterated the following prerequisites for the institution of a CIRP under the Insolvency and Bankruptcy...
Arbitration Reference Not Maintainable If Filed After Admission Of Insolvency Resolution Petition U/s 7 IBC: Supreme Court
The Supreme Court observed that in any proceeding which is pending before the Adjudicating Authority under Section 7 of Insolvency and Bankruptcy Code, if such petition is admitted upon the Adjudicating Authority recording the satisfaction with regard to the default and the debt being due from the corporate debtor, any application seeking reference to arbitration...
Insolvency Process Maintainable Against Corporate Guarantor Even If Principal Borrower Is Not A 'Corporate Person' : Supreme Court
'In law, the status of the guarantor, who is a corporate person, metamorphoses into corporate debtor, the moment principal borrower (regardless of not being a corporate person) commits default in payment of debt which had become due and payable"
Adjudicating Authority Cannot Substitute Any Commercial Term Of Resolution Plan Approved By Committee Of Creditors: Supreme Court
The Supreme Court observed that adjudicating authority cannot substitute any commercial term of the resolution plan approved by Committee of Creditors. If, within its limited jurisdiction, the Adjudicating Authority finds any shortcoming in the resolution plan vis-Ã -vis the specified parameters, it would only send the resolution plan back to the Committee of Creditors, for re-submission,...