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 in Re: Cognizance for Extension of Limitation, Suo Moto WP (C) No. 3/2020, the Supreme Court had extended the...

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 Code (Amendment) Act, 2020 ("2020 Amendment Act", for short). The Statement of Objects and Reasons of the ...

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 Monday passed a general order extending the limitation, whether condonable or not, with effect from March...

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 responsible for committing the offences in relation to the affairs of the petitioner company. The present petition...

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 is continuing beyond April 30.This is done for the benefit of MSMEs struggling due to the...

COVID-19: NCLAT Withdraws Roster For Urgent Listing; Limitation Extended From March 15 Till Further Orders [Read Notice]

In view of complete lockdown/shutdown across various cities of the country to restrict the transmission of COVID-19, the National Company Law Appellate Tribunal (NCLAT) has withdrawn the Rosters issued in regard to hearing of urgent matters on March 25 and April 1. On March 20, the Tribunal had restricted its functioning to hear only urgent matters till April 1, upon mentioning as per the roster issued separately. It had also extended the operation of all interim orders. The same now...

COVID19: All Benches Of NCLT To Remain Closed From Mar 23 Till Mar 31; NCLT Chennai To Take Up Urgent Cases On Intimation Via Email [Read Notice]

In view of the lockdown announced by several state governments and the Central Govt due to COVID-19, the National Company Law Tribunal (NCLT) has decided to close all its benches from March 23, till March 31, for judicial work. All counsels/ parties requiring urgent hearing may send an email to the registry of NCLT Chennai and intimate the same to the opposite party, whereafter the Acting President of the Tribunal sitting singly at Chennai will examine and pass necessary orders on...