Can A PSU Be A "Corporate Person" Under Bankruptcy Code? NCLT Chennai Reserves Order

The National Company Law Tribunal, Chennai, on Saturday, reserved an order that would clarify whether a PSU would fall within the ambit of a "corporate person" under the Insolvency and Bankruptcy Code.The matter before the Tribunal pertains to Petitions filed by power producers Ind. Bharath Power Gencom Ltd, Ind. Bharath Thermal Limited and Aarkay Energy (Rameshwaram) Limited against Tamil...

Arbitral Awards And "Existence Of Dispute" Under IBC – NCLAT Ruling In Annapurna v Soril

The judgment of Hon'ble National Company Law Appellate Tribunal (NCLAT), dated 29 August 2017, in M/s Annapurna Infrastructure Pvt. Ltd. & Anr. v. M/s. SORIL Infra Resources Ltd., has thrown up some intriguing questions on the interplay between the Insolvency and Bankruptcy Code, 2016 (IBC) and the Arbitration and Conciliation Act, 1996 (A&C Act).Under IBC, an operational creditor can initiate the corporate insolvency resolution process (CIRP) of a corporate debtor under Section 9 for...

IDBI Moves SC To Vacate The Stay Of Insolvency Proceeding Against Jaypee

A day after the Apex Court stayed the insolvency proceeding against Jaypee Infratech before NCLT, the IDBI bank today moved the top court saying the stay order will benefit the builder rather than the home buyers. Mentioning urgently before the Bench headed by Chief Justice of India J Dipak Misra, Senior Advocate A M Singhvi sought the bench to vacate the stay order."The stay order on...

Decoding Of Insolvency And Bankruptcy Code, 2016, SC's First Major Judgment [Read Judgment]

In a detailed judgment, Justice RF Nariman, while sitting with Justice Sanjay Kishan Kaul, has extensively travelled through the new legislation – Insolvency and Bankruptcy Code of 2016. The Supreme Court was dealing with an appeal preferred by M/s Innovative Industries, against which insolvency proceedings were initiated by ICICI Bank. It was the contention of the appellant, who is...

Pendency Of Execution Petitions Or Appeals Under Sec.37 Of The Arbitration & Conciliation Act, Not A Bar To Initiate Insolvency Resolution Process; NCLAT [Read Judgment]

It was quite uncertain as to whether the preference of an Appeal under Sec.37 of the Arbitration and Conciliation Act, 1996 against the dismissal of the objection under Sec.34 would amount to 'an existence of dispute' which debars initiation of Corporate Insolvency Process under Sec.9(1) of the I & B Code, and equally unclear about the status of 'pendency of an Execution Petition for...

Inapplicability Of Limitation Act To Insolvency And Bankruptcy Code?

In a recent National Company Law Appellate Tribunal (NCLAT) ruling of Neelkanth Township and Construction Pvt. Ltd. v. Urban Infrastructure Trustees Ltd.[1] (11.08.2017), several issues with regard to the Insolvency and Bankruptcy Code, 2016[2] (IBC) were discussed. One of the issues for consideration before the NCLAT was whether the application under Section 7 of the IBC is time barred, as the debt claim related to the years 2011, 2012 and 2013 and it was held that the Limitation Act, 1963[3]...

Proceedings Under Section 138 NI Act Have Nothing To Do With Insolvency Application Under The Code: NCLT

The Kolkata Bench of the National Company Law Tribunal recently ruled that disclosure of the fact of initiation of proceedings under Section 138 of the Negotiable Instruments Act in not necessary while filing an Application for Insolvency under the Insolvency and Bankruptcy Code, 2016."It is to be made clear that the proceedings under section 138 of Negotiable Instrument Act is a...

Promoters Cannot Escape Liquidation Of Personal Assets Given As Security By Filing For Bankruptcy under Code: NCLT [Read Order]

The National Company Law Tribunal recently held that the personal properties of the Promoters given as security to the Banks can be proceeded against, in spite of initiation of insolvency proceedings against the Company.Judicial Member M.K. Shrawat ruled that personal properties of the Promoters would not saved by the Moratorium prescribed by Section 14 of the Insolvency and Bankruptcy...

Gujarat HC Denies Relief To Essar Steel Against RBI's Order to Initiate Insolvency Proceedings [Read Judgment]

The Gujarat High Court on Monday dismissed Essar Steel's Petition against the Reserve Bank of India's directive to Banks for initiating insolvency proceedings against the Company. An oral order was passed by Justice S.G. Shah, with a detailed order expected later today.Essar Steel had approached the High Court challenging a circular issued by the RBI on 13 June, directing banks to...

Meeting Of Committee Of Creditors – Insolvency Code: Practical Hitches And Possible Solutions Thereto

Practice makes a man perfect and the same practice (read: implementation) makes a law seamless. Insolvency and Bankruptcy Code, 2016 along with its allied rules and regulation is just a year old technically (and around 5 months old effectively) and surely there are gaps which are being detected during implementation.One such gap is in the provisions laid down for convening the meeting of the Committee of Creditors (CoC).Quorum for the meeting As per Regulation 22 of the CIRP, 2016, minimum...

Key Takeaways From The NCLAT Judgment In Kirusa Vs Mobilox

In the context of initiating corporate insolvency resolution by an operational creditor against a corporate debtor under section 8 of the Insolvency and Bankruptcy Code, 2016 ("IBC"), a corporate debtor can, at a preliminary stage, resist such initiation (within the prescribed time limit under the IBC) in one of the two ways; either,(a) it can bring 'to the notice of the operational creditor existence of a dispute, if any, and record of pendency of the suit or arbitration proceedings filed...

Finally, Interpretation Of 'Dispute' By NCLAT In Kirusa V. Mobilox

Under the Insolvency and Bankruptcy Code, 2016 ("Code"), an operational creditor can initiate a corporate insolvency resolution process ("CIRP") of the corporate debtor by filing an application before the relevant National Company Law Tribunal ("NCLT/ Adjudicating Authority") upon occurrence of a default in payment of its operational debt.However, the operational creditor must first send a demand notice or invoice to the corporate debtor, demanding the payment of the defaulted debt. In case the...