IBC
NCLT/NCLAT Has No Residual Equity Jurisdiction While Dealing With Resolution Plan Approved By CoC: Supreme Court
The Supreme Court observed that there is no residual equity based jurisdiction in the Adjudicating Authority or the Appellate Authority while dealing with the resolution plan approved by the Committee of Creditors.The bench of Justices DY Chandrachud and MR Shah reiterated that these authorities can not enter into the commercial wisdom underlying the approval granted by the CoC to the resolution plan."To argue that a residuary jurisdiction must be exercised to alter the delicate economic...
No Bar In Permitting Amendment Of Pleadings Or Filing Of Additional Documents In CIRP Application U/s 7 IBC: Supreme Court
The Supreme Court observed that there is no bar in permitting amendment of pleadings or to the filing of additional document in an application under Section 7 of the Insolvency and Bankruptcy Code.Depending on the facts and circumstances of the case, when there is inordinate delay, the Adjudicating Authority may, at its discretion, decline the request, the bench comprising Justices Indira Banerjee and V. Ramasubramanian observed.One of the issues considered in the appeal filed by the Bank...
Money Decree/Certificate Of Recovery In Favour Of Financial Creditor Gives Fresh Cause Of Action To Initiate CIRP U/s 7 IBC: Supreme Court
The Supreme Court observed that a judgment and/or decree for money in favour of the Financial Creditor, or the issuance of a Certificate of Recovery in its favour, would give rise to a fresh cause of action for the Financial Creditor, to initiate proceedings under Section 7 of the IBC for initiation of the Corporate Insolvency Resolution Process. Such judgment/decree may be passed by the Debt Recovery Tribunal, or any other Tribunal or Court, and in such cases Insolvency Resolution Process...
IBC - The Journey So Far – Part I
This write up trace evolution of jurisprudence and short legal history under Insolvency and Bankruptcy Code, 2016. Since, it captures the developments on various fronts, the write up is divided into three Parts. Part-I traces the background and principles of the new law and impact it has so far created on the system. Part-II deals with the various amendments carried out in the Code as the landmark judgements which shaped the law in the present form. Part-III deals with the issue clogging...
"Scattering Litigation Causes Multiplicity Of Litigation": Gujarat HC Recommends Transfer Of Winding Up Proceedings To NCLT
Stressing that scattering the litigation in various Forums is the root cause of a multiplicity of litigation and amounts to misuse and abuse of process of law, the Gujarat High Court recently recommended transferring of the entire litigation (Winding up and insolvency proceedings) of two corporate bodies viz. GPPML (Ganpati Pulp and Paper Mills Limited) and SIL to NCLT. The Bench of Justice Dr. Vineet Kothari and Justice B. N. Karia was hearing the plea involving parties who not only...
IBC Amendment Bill Passed In Lok Sabha To Allow Pre-Packaged Insolvency Process For MSMEs
The Lok Sabha on Wednesday passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2021. It was introduced in the house on Monday, July 26 and passed without any discussion due to disruptions caused by opposition protests.As per the Government, the Covid-19 pandemic has taken a hit on the businesses, especially micro, small or medium enterprises (MSME sector) which is critical to the economy considering their significant contribution to the GDP and employment generation. Thus, the bill...
Finality Of Resolution Plans Under IBC And Pending Legal Proceedings
The Supreme Court in its recent decision in Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Limited, has interpreted the binding nature of resolution plans on the various stakeholders of a corporate debtor and in Para 95 held as follows: "(i) That once a resolution plan is duly approved by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and...
Claim Of Refund Of Advance Payment- Whether An 'Operational Debt' Under The Insolvency & Bankruptcy Code, 2016
CLAIM OF REFUND OF ADVANCE PAYMENTWHETHER AN 'OPERATIONAL DEBT' UNDER THE INSOLVENCY & BANKRUPTCY CODE, 2016 Introduction Ever since the Insolvency and Bankruptcy Code, 2016 ("the Code") has come into effect, many vexed questions of law regarding the interpretation of various provisions of the Code have arisen, many of which have come to be settled by orders passed by the National Company Law Tribunals ("NCLT"), the National Company Law Appellate Tribunal ("NCLAT") as well as...
Insolvency Law in Review – May 2021
The enactment of the Insolvency and Bankruptcy Code 2016 (Code) has had significant ramifications on the corporate insolvency landscape. Over time, the Code has witnessed a manifold increase in litigation, and consequently in the number of decisions. This has made it difficult for insolvency practitioners to stay updated with developments in the field. This column fills this gap by providing brief summaries of latest decisions from the various fora dealing with Insolvency Law. These...
Formation of the Committee Of Creditors under the Insolvency and Bankruptcy Code: A Visible Collusion
The Insolvency and Bankruptcy Code, with the primary motive of rehabilitation of financially distressed corporates, came into force with effect from 1st December 2016. The National Company Law Tribunal was constituted through a notification dated 1.06.2016 to pursue the afore goals. The Code empowered Insolvency Professionals and Committee of Creditors to exercise the most vital functions to resolve the debt-ridden corporate debtor. Though the powers and duties of resolution professionals...
Secured Creditor Can't Challenge Resolution Plan Insisting That Higher Amount Should Be Paid Based On Security Interest : Supreme Court
It is not the intent of IBC that a security interest available to a dissenting financial creditor over the assets of the corporate debtor gives him some right over and above other financial creditors so as to enforce the entire of the security interest.