NCLAT Sets aside NCLT Order To Add MCA As Party In All IBC Cases And Company Petitions [Read Order]

The National Company Law Appellate Tribunal (NCLAT) set aside an order of National Company Law Tribunal (NCLT) which mandated the impleadment of the Union Ministry of Corporate Affairs (MCA) as a party in all Insolvency and Bankruptcy Code (IBC) matters and Company petitions. NCLAT was of the view that the order was tantamount to the imposition of a new rule, which was beyond the...

Filing Of Default Record Necessary For News Sec 7 IBC Filings : NCLT

The National Company Law Tribunal has directed filing of default record from Information utility along with new petitions under Section 7 of the Insolvency and Bankruptcy Code, 2016.The order issued in this regard said :"All concerned are directed to file default record from Information Utility alongwith the new petition being filed under Section 7 of Insolvency & Bankruptcy Code,...

IBC Amendment,2020: Constitutional Vires Of The Minimum Threshold On The Allottees

The Legislature of India enacted the Insolvency and Bankruptcy Code, 2016 ("the Code") for the speedy revival of companies and consolidation of laws relating to liquidation. The Code provided Financial Creditors and Operation Creditors a right to initiate the Corporate Insolvency Resolution Process ("the CIRP") against a Corporate Debtor, before the National Company Law Tribunal ("the Tribunal"). The evolution of the allottee(s) of a real estate project as Financial Creditors under the ...

IBC: Retrospective Application of Revised Threshold- An Alternate Perspective

INTRODUCTION 1.1In an apparent bid to avoid large-scale insolvencies, especially against the MSMEs, as a result of the financial stress caused by Covid-19 pandemic, the Central Government had, vide notification bearing no. SO 1205(E) dated March 24, 2020 ("Notification"), increased the threshold of the minimum amount of default for the purpose of maintainability of an application for initiation of corporate insolvency resolution process ("CIRP") under Insolvency and Bankruptcy...

NCLAT Directs NBCC To Implement Resolution Plan Pending Appeal in Jaypeee Infratech matter

While hearing an urgent petition during the extended lockdown period moved by the NBCC, the National Company Law Appellate Tribunal ('NCLAT') declined to stay the implementation of the modified resolution plan and directed the state - run NBCC to acquire the debt ridden Jaypee Infratech and complete over 20,000 pending flats, but said the direction was subject to its final order.Justice...

Liquidation Value vis a vis Dissenting Financial Creditors: Aftermath Of Maharashtra Seamless And Orchid Pharma

The Insolvency Bankruptcy Code, 2016 ("Code") has gone through a myriad of changes since its inception and introduction. Although it has been held by the Supreme Court in the case of Embassy Property Developments Pvt. Ltd. vs State of Karnataka, that the IBC is a complete Code by itself and in Innoventive Industries Ltd. vs ICICI Bank that the Code is a single Unified Umbrella, covering the entire gamut of law relating to insolvency resolution of corporate persons and others in a time...

Possibility Of Mediation In Corporate Insolvency

The book "The Richest Man in Babylon", written by George S. Clason, is a classic in terms of personal finance and wealth management. It was written in the year 1926 and lists a few principles for accumulation and building of wealth and methods to navigate oneself in a financial crisis. It is more or less a "back to the basics" book on finance. The book at one-point talks about how one needs to deal with cases where their debts are more than their income and about how to deal with times...

COVID19: NCLAT Extends Interim Orders, Excludes Lockdown Period u/s 12 Proceedings Of IBC To Mitigate Difficulties [Read Order]

The National Company Law Appellate Tribunal (NCLAT) has excluded the period of lockdown for the purposes of counting Resolution Process vis-à-vis section 12 of the Insolvency & Bankruptcy Code (IBC), 2016. Taking suo motu cognizance of the unprecedented situation which has arisen due to the spread of COVID19, bench comprising Justices Bansi Lal Bhat, Anant Bijay...

National Lockdown: ICABA Urges CJI To Extend Various Timelines Under Arbitrarion Act, IBC, NI Act, Etc. [Read Letter]

In view of the standstill brought with the imposition of a national lockdown, the Indian Commercial and Arbitration Bar Association has requested the Supreme Court to extend the timelines related to disposal of cases, as prescribed in various statues. The letter written by a Delhi based lawyer, Advocate Ankur Mahindro, points out that even though, by way of a general order...

NCLAT Bench Chennai - Some FAQ's

The Ministry of Corporate Affairs (MCA) in a very relevant measure has announced the setting up of a Bench of the National Company Law Appellate Tribunal (NCLAT) Bench at Chennai a few days ago. This was done by the Ministry's notification dated 13th March 2020, notifying this constitution of a NCLAT Bench at Chennai vide its notification with Ref No. MCA N/No/S.O. 1060(E). The first NCLAT Bench is situated at Delhi and has been functional for about three years. This move has been by and...

Protection Of Interests Of Suppliers Of Goods And Services To Corporate Debtor Under Corporate Insolvency Resolution Process

Scope of the Study: The Insolvency and Bankruptcy Code, 2016 (Hereinafter referred to as "the Code") required the Resolution Professional to manage operations of the corporate debtor as a going concern during corporate insolvency resolution process[1] (Hereinafter referred to as "CIRP"). Receipt of supply of goods and services is imperative to maintain the corporate debtor as a going concern during CIRP. The business risk taken by such suppliers should be adequately protected. This...

Raising Of IBC Threshold : Retrospective Or Prospective?

On 24th March 2020, a press conference was held by the Union Finance Minister, Nirmala Sitaraman, at which she set out various decisions that were to be taken by the Government to combat the economic crises that has arisen due to the COVID-19 pandemic. One of the decisions was to raise the threshold of loan default amounts that could trigger insolvency proceedings from Rs. 1 Lakh to Rs. 1 Crore.[1] The Finance Minister also stated that the government was "considering the suspension of...