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...

Insolvency and Bankruptcy Code (Amendment) Act, 2020 : A Primer

"Recovery is incidental under the IBC. Its primary objective is rescuing companies in distress." ­­– Dr. M.S. Sahoo (Chairperson, Insolvency and Bankruptcy Board of India) The above quoted words of Dr. Sahoo from his article in the print edition of Indian Express on March 14, 2020 under the title: 'The real reform', form the underlying theme of the Insolvency and Bankruptcy...

NCLT Extends Limitation Period From March 15 Till Further Orders [Read Notice]

The National Company Law Tribunal has issued a notice intimating all the litigants that the extension of limitation period granted by the Supreme Court on Monday will be applicable to the cases falling within the NCLT's jurisdiction. With the objective of reducing physical filings in courts and tribunals across the countries during the COVID-19 pandemic, the Supreme Court had on...

Sec 32A IBC : Delhi HC Sets Aside SFIO Complaint Against Tata Steel BS Ltd Filed In Respect Of Bhushan Steel [Read Judgment]

The Delhi High Court has quashed the summons as well as the complaint filed against Tata Steel BSL Ltd (erstwhile Bhushan Steel) by the Serious Fraud Investigation Office. However while setting aside the complaint, the Single Bench of Justice Vibhu Bakhru clarified that this order will not affect the prosecution of the erstwhile promoters or any of the officers who may be directly...

Increase In Threshold For Commencing Insolvency Proceeding

The Union Finance Minister of India announced on Tuesday that the threshold for triggering insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 ("Code") stands increased with immediate effect from Rs.1,00,000/- to Rs.1,00,00,000/-. The Central Government's power to specify such increase is found in Section 4 of the Code : "4. (1) This Part shall apply to matters relating to the insolvency and liquidation of corporate debtors where the minimum amount of the...

Impact Of Raising IBC Threshold On Operational Creditors

On 24th March, 2020, Government of India decided to raise the threshold for the determination of the default from Rs 1 lakh to Rs 1 crore in the light of the recent pandemic outspread of novel coronavirus disease Covid-19, in order to help and aid the functioning of the small companies and MSMEs which might face the threat of defaults owing to the lockdown. This decision has also clarified the intention of the Government to aid the small business owners and companies to survive the ...

[Breaking] IBC Threshold Raised As ₹ One Crore; Govt May Consider Suspending Sections 7, 9 & 10

In view of the lockdown due to COVID-19, the Finance Ministry on Tuesday announced special relief packages for companies under the Companies Act and the Insolvency and Bankruptcy Code.The existing threshold of Rupees one lakh for triggering insolvency is raised to Rupees one crore. The Ministry will also consider suspending Sections 7, 9, 10 of IBC for six months if the lockdown situation...