"Defaulter's Paradise Lost; Economy's Rightful Position Regained"; IBC Code Passes Constitutional Muster: SC

"We are happy to note that in the working of the Code, the flow of financial resource to the commercial sector in India has increased exponentially as a result of financial debts being repaid"

IBC : Supreme Court Upholds Validity Of Insolvency & Bankruptcy Code [Read Judgment]

The Supreme Court today upheld the constitutional validity of the Insolvency and Bankruptcy Code 2016 in its "entirety".The Court however held that to attract the bar under Section 29A from participating in resolution process, "related person" should be a person connected to the defaulting entity.The bench of Justices R F Nariman and Navin Sinha had reserved orders on January 15 on the...

IBC - Two Years On - The Game is On

"Curiouser and Curiouser" – Hon'ble Justice R.F. Nariman quotes from "Alice in the Wonderland" to describe the tactics adopted promoter of Essar Steel in the case of Arcelormittal India Private Ltd vs Satish Kumar Gupta.It has been more than two years now when the path-breaking and drastic law governing insolvency was passed and implemented with great speed and purpose. The speed was necessary as the financial sector was reeling under NPA of more than 10 trillion rupees and the system needed...

NCLT, Mumbai Says CoC Not Right In Rejecting Resolution Plan Only Coz It Was Sent After Cut-Off Date [Read Order]

Tribunal says Code is paramount, not the RegulationsObserving that when there is a conflict between the Regulations and the Insolvency Code, the object of the Code is paramount and not the Regulations which are formed only for the just implementation of the Code, the Mumbai bench of National Company Law Tribunal has held that the Committee of Creditors of a corporate debtor was wrong in...

Insolvency & Bankruptcy Code - 2018 Annual Round Up

The year 2018 also witnessed major changes in the field of Insolvency and Bankruptcy Code(IBC).While the year 2017 witnessed SC explaining the basic concepts of the nascent legislation, the year 2018 saw SC addressing more complex issues in relation to it.The significant decisions of 2017 were Innoventive Industries v ICICI Ltd and Mobilox Innovations Pvt Ltd v Kirusa Software...

Insolvency Proceedings – Safe Passage for Defaulters?

Recently, on 26th November 2018, the Corporate Affairs Secretary Mr.Injeti Srinivas informed the country that out of the 9,000 cases filed before the National Company Law Tribunal (NCLT), 4,400 cases have been disposed of, leading to a recovery of approximately Rs.71,000 crores. The total bad debts assessed so far that is owed to the public sector banks in India amounts to Ten Lakh Crores of Rupees.As per the report published by the Insolvency and Bankruptcy Board of India("IBBI"),in respect of...

IBC- Miscellany

Insolvency and Bankruptcy Code, 2016 ("IBC" or the "Code") will be completing two years after Chapters II and III pertaining to the provisions relating to Insolvency Resolution and Liquidation for Corporate Persons and Liquidation Process became operational. The Code has proved its purpose and several crores of rupees have been recovered either by way of settlement between the creditor and the corporate debtor, putting in place an acceptable resolution plan or through liquidation of the...

Winding Up Proceedings Under SICA Are To Continue In HC And Not In NCLT : SC[ Read Judgment]

The Supreme Court has held that winding up proceedings under the Sick Industrial Companies(Special Provisions) Act 1985 will continue in the High Court and not the National Company Law Tribunal, until an application for transfer to NCLT is filed by a party under Section 434(1)(c) of the Companies Act 2013.The bench of Justices R F Nariman and M R Shah held so in Jaipur Metal and...

Jaypee Infratech Case : Publication Of Homebuyers' Names In List Of Creditors Will Not Violate Privacy, Rules NCLT [Read Order]

The Allahabad bench of National Company Law Tribunal has held that disclosure of the names of homebuyers in the list of creditors will not result in violation of privacy.The Tribunal was dealing with the resolution process of Jaypee Infratech Ltd(JIL), following directions from the Supreme Court. The SC had directed on August 9 to include homebuyers in the Committee of Creditors(CoC),...

NCLT Chennai Stresses Need To Set Norms For Evaluation Of Resolution Plans By Committee Of Creditors [Read Order]

Chennai Bench of the National Company Law Tribunal (NCLT) has called for "Standard Operating Procedures" for managing the affairs of the Committee of Creditors (CoC) under the Insolvency and Bankruptcy Code (IBC)."…the Head offices of the members of the CoCs are directed to work out a "Standard Operating Procedure" for being followed by the member of the CoCs for determining the suitability...

Application Under Section 7 Of IBC Cannot Be Admitted After Settlement Between Parties : NCLAT[Read Judgment]

The National Company Law Appellate Tribunal headed by Chariman Justice S J Mukhopadhyaya has declared illegal the admission of application under Section 7 of the Insolvency and Bankruptcy Code after settlement between the parties.In this case, after the application for initiation of corporate resolution process was filed under Section 7 of IBC, the parties entered into a settlement. Although...

S.7 IBC Application Cannot Be Rejected On Account Of "Usurious Penal Interest" Governed By Usurious Loans Act: NCLAT [Read Judgment]

The National Company Law Appellate Tribunal (NCLAT) has held that an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 cannot be rejected on the ground of "usurious and extortionate penal interest", which is governed by Usurious Loans Act, 1918.A bench comprising Justice SJ Mukhopadhaya (Chairperson) and Justice Bansi Lal Bhat (Judicial Member), in Sh. Naveen Luthra v....