Fate Of The Accounts Covered Under The February 2018 Circular Post-Supreme Court Judgment

The Supreme Court of India in the matter of Dharani Sugars & Chemical Ltd Vs. Union of India[1] struck down Circular dated 12th February 2018 issued by RBI as ultra vires of section 35AA of the Banking Regulation Act, 1949 ("BR Act"). The RBI Circular mandated banks and financial institutions to initiate resolution against defaulting companies with exposure of more than Rs. 2000 crores. If the account is not resolved with a period 180 days of such reference, then banks and financial...

RDBA, SARFAESI, IBC Doesn't Prevail Over PMLA, Must Be Harmonically Construed: Delhi HC [Read Judgment]

The Delhi High Court has held that the Recovery of Debts and Bankruptcy Act, SARFAESI Act and Insolvency and Bankruptcy Code does not prevail over the provisions of Prevention of Money-Laundering Act. Justice RK Gauba observed that these laws be construed and enforced in harmony, without one being in derogation of the other with regard to the assets respecting which there...

Authorization From Central Govt Necessary For RBI To Direct Insolvency Process Against Stressed Assets : SC [Read Judgment]

"It is clear that directions that can be issued under Section 35AA can only be in respect of specific defaults by specific debtors", SC said.

SC Strikes Down RBI Circular Asking Banks To Take Defaulting Companies To Insolvency [Read Judgment]

The Supreme Court today struck down the circular issued by the Reserve Bank of India on February 12, 2018 directing banks to initiate insolvency proceedings against companies having bad debts of Rs 2000 crores or above.The February 12 circular had directed banks to resolve debts over Rs 2000 crores within 180 days, failing which the corporate debtor would have to be taken to the National...

IBC: Resolution Plans Should Be Given To Former Directors Of Corporate Debtor To Attend CoC Meetings: SC [ Read Judgment]

Members of the erstwhile Board of Directors,being vitally interested in resolution plans that may be discussed at CoC meetings, must be given a copy of such plans as part of "documents" that have to be furnished along with the notice of such meetings.

CIRP Under IBC Can Continue Independent Of Winding Up Petition Pending In High Court : SC [Read Judgment]

Corporate Insolvency Resolution Process(CIRP) under the Insolvency and Bankruptcy Code (IBC) can continue independent of any pending winding up process against the corporate debtor pending in the High Court under the Companies Act, held the Supreme Court in a judgment delivered on January 22 by a bench of Justice R F Nariman and Navin Sinha.This came in the case Forech India Ltd vs...

"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...