Section 10A Of IBC- Is It Equitable?

On 5th June 2020 , the Ministry of Law and Justice through an Ordinance inserted Section 10A to the Insolvency and Bankruptcy Code, 2016 ("IBC"), suspending the initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7, 9 and 10 of the IBC for a period of six (6) months, w.e.f. 25th March, 2020. Subsequently, repacing the Ordinance, the Parliament on 21st September 2020 , passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020. Days before the...

Limitation Under IBC – A Tale Of Two Judgments?

"…It was the best of times, it was the worst of times…." (Charles Dickens, a Tale of Two Cities, 1859) The Insolvency & Bankruptcy Code (IBC) was projected and portrayed as a mirage and a revolution in the law governing reorganisation and liquidation. Embodied as a self-sufficient code on the issue, the Act underwent fine-tuning by way of a plethora of amendments to plug loopholes of functionality, practical application as well as procedure. One such integral issue of...

[Explainer] Resolution Plan Under IBC: Major Decisions

"The 'I&B Code' defines 'Resolution Plan' as a plan for insolvency resolution of the 'Corporate Debtor' as a going concern. It does not spell out the shape, colour and texture of 'Resolution Plan', which is left to imagination of stakeholders. Read with long title of the 'I&B Code', functionally, the 'Resolution Plan' must resolve insolvency (rescue a failing, but viable...

SC To Continue Hearing Challenge Against IBC Ordinance 2020 On 8th October [Read Order]

The Supreme Court on Tuesday heard arguments on behalf of the Petitioners in a batch of petitions challenging the constitutional validity of conditions introduced by the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020, on the homebuyers' right to file insolvency petitions against defaulting bidders. A Bench headed by Justice RF Nariman heard arguments submitted by...

An Analysis Of Recent Judgments On Limitation Under IBC

Prior to the enactment of IBC (Second Amendment) Act, 2018 through which Sec. 238A of the Code was introduced, in a series of judgments, [1] the NCLAT and NCLT considered claims which were otherwise barred by limitation for the purpose of initiating of CIRP under Sections 7 and 9 of the Code. The Supreme Court, in B.K. Educational Services Private Limited v Parag Gupta and Associates,[2] held that S. 238A, being clarificatory and procedural in nature, would be applicable to claims made ...

Personal Guarantor Insolvency Provisions Of IBC Under Challenge

By a gazette notification dated 15 November 2019, the Government of India had brought into effect Part III of the Insolvency and Bankruptcy Code, 2016 (IBC) (save and except provisions dealing with the fresh start process mainly set out in Chapter III) dealing with the insolvency and bankruptcy of individuals and partnership firms in so far as it is applicable to personal guarantors of a corporate debtor. We have recently seen a lot of discussion surrounding these provisions in several...

[IBC] Limitation Period For CIRP Application Is Three Years From The Date Of Default: SC [Read Judgment]

The Supreme Court has reiterated that the limitation period for application under Section 7 of the Insolvency and Bankruptcy Code is three years as provided by Article 137 of the Limitation Act, which commences from the date of default and is extendable only by application of Section 5 of Limitation Act if any case for condonation of delay is made out. The issue considered by the...

IBC (Amendment) Ordinance, 2020: A Pandemic Of Bad Drafting

Much awaited amendment has been made in IBC by an Ordinance promulgated on 5th June, 2020. It is not happily worded, and within a short span of time we have seen many conflicting interpretations. Two Sections, viz. 10A and 66(3) have been incorporated in the Insolvency and Bankruptcy Code, 2016. The arrangement of expressions in the newly-inserted Section 10A is very poor, creating the unwanted confusion, compelling me to name it "A Pandemic of Bad Drafting". The main part of Section...

NCLT (Judicial) Member Challenges His Transfer In Delhi High Court

A member (judicial) of National Company Law Tribunal (NCLT) has moved the Delhi High Court against the order transferring him from the Mumbai Bench to the Kolkata Bench of NCLT. The challenge is with respect to two transfer orders, dated April 30 and May 12, through which a number of members posted in various cities were transferred to different cities. This includes the transfer of the...

A Personal Guarantor's Pandemic: IBC Suspension And Its Repercussions

On 25 March 2020, in light of the COVID-19 pandemic currently plaguing the world, the Central Government, through the Ministry of Home Affairs, had to take the harsh step of imposing a nationwide lockdown, which has been supplemented by periodic extensions. As a result of the unprecedented impact of this measure on businesses, and to aid the plunging economic scenario in the country, a series of economic reforms have been sought to be implemented under the aegis of the finance minister...

NCLT Bengaluru To Conduct "E-Filing Training Programme" Today For Advocates & Other Stakeholders [Read Notification]

In an appreciable move, the Bengaluru Bench of the National Company Law Tribunal has decided to conduct an online training programme to make Advocates and other stake holders in the Tribunal familiar with its e-filing software. As the e-filing system is running successfully in some of the NCLT's benches, the principal Bench of NCLT at Delhi has decided to extend this benefit to all...

Impact of Covid-19 Outbreak On The Resolution Plans Submitted By The Successful Bidders

Nationwide lockdown announced by several governments including the Indian Government has adversely affected the business resulting in an extensive market interruptions and relapse of consumption. Lately, the Fitch Ratings has condensed India's GDP growth forecast from 5.1% to 2%, making it the dimmest growth rate over the past 30 years. Subsequently, businesses are facing Spartan monetary distress. Although at present it is very difficult to anticipate the full impact on the economy, it is...