TagDebt Finance

Disputes amongst the Same Class of Creditors and Judicial Intervention

[Rohit Sharma is a partner at Mamta Binani & Associates, Mumbai] Since the inception of the Insolvency and Bankruptcy Code, 2016 (‘Code’), numerous amendments have been carried out to plug the loopholes or uncertainties in the Code. In such a vein, section 30(4) of the Code was amended on 6 August, 2019, which states as follows: (4) The committee of creditors may approve a resolution plan by...

Fragmented Framework for Perfection of Security Interest: A Secured Creditor’s Nightmare?

[Sikha Bansal is a Partner and Siddharth Goel a Legal Advisor at Vinod Kothari & Company] An interesting question of law came up for consideration by way of appeal before National Company Law Appellate Tribunal (NCLAT) in Volkswagen Finance Private Limited v. Shree Balaji Printopack Pvt. Ltd . The brief facts of the case involved a car financing company, which extended a car loan to the...

Non-Arbitrability of Debt Recovery Disputes: The Need for Reconsideration

[Shagun Singhal and Khushbu Turki are third year students at National Law Institute University, Bhopal] Since the Arbitration and Conciliation Act, 1996 fails to define the contours of subject-matter arbitrability, the same has remained a bone of contention despite repeated attempts by the courts to crystallise its scope. The issue was first addressed by the Supreme Court in of Booz Allen v. SBI...

The IBC’s Circle of Interpretation: Univalue Projects Pvt. Ltd. v. The Union of India

[Animesh Bordoloi is an Assistant Lecturer at the Jindal Global Law School and Hitoishi Sarkar is a III year student at the Gujarat National Law University. The authors would like to thank Mr. Rahul Sibal for his comments on the post] On August 18, 2020, a Single Judge of the Calcutta High Court in Univalue Projects Pvt. Ltd. v. The Union of India struck down an order passed by the Registrar of...

NCLAT’s Ruling in the Surana Liquidation Case: An Analysis

[Shreya Dagar is a 3rd year B.A. LL.B. (Hons.) student at National Law University Jodhpur] The National Company Law Appellate Tribunal (“NCLAT”) on 18 June 2020 decided in favour of the liquidator in Srikanth Dwarakanath v. Bharat Heavy Electricals Limited (BHEL). The case dealt with the liquidation of Surana Power Limited (“SPL”). The tribunal imported a provision of the Securitisation and...

Suspension of the Insolvency and Bankruptcy Code: The Way Forward

[Shreya Choudhary and Arnav Sinha are final year students of ILS Law College, Pune] In the wake of recent developments involving the Insolvency and Bankruptcy Code of 2016 (IBC), it is important to explore the various alternatives to restructuring debt, dealing with stressed assets and furthering the economic growth in the country. The Finance Minister announced various changes to the IBC to...

SEBI’s Proposed Framework for Corporate Bonds and Debenture Trustees

[Rashmi Birmole is a III year B.A., LL.B. student at ILS Law College, Pune] Infrastructure Leasing & Financial Services (“IL&FS”), a non-banking finance company (“NBFC”) belonging to a sub-category of systemically important non-deposit accepting core investment companies was, at the time, engaged in  financing and developing infrastructure projects. In June 2018, the collapse of IL&FS...

Liability of Issuers for Misleading Advertisement in a Public Issue of Securities

[Neha Sinha is a 3rd Year B.A. LL.B. student at National University of Study and Research in Law (NUSRL), Ranchi] In an order dated February 26, 2020, the Securities and Exchange Board of India (SEBI) imposed penalty on Muthootu Mini Financiers Ltd. (MMFL) in a matter relating to misleading advertisement made to the public at large regarding the issue of debt securities. The matter was decided by...

Position of Third Party Security after Jaypee Infratech

[Ankesh Kumar is a IV Year student at NLIU Bhopal] Anuj Jain v Axis Bank Limited witnessed the Supreme Court ruling on two important matter in Indian insolvency law. As summarized in this post, while the Court set aside the transactions in question as being preferential within the meaning of section 43 of Insolvency and Bankruptcy Code, 2016 (IBC), it went on to decide that creditors taking third...

Enforcing a Pledge over an Insurance Company’s Shares

A transfer of shares of an insurance company requires the prior approval of the Insurance Development and Regulatory Authority of India (IRDAI) in certain circumstances. Section 6A(4)(b)(iii) of the Insurance Act, 1938 provides: “(4) A public company as aforesaid which carries on life insurance business- … (b) shall not register any transfer of shares … (ii) where, after the transfer, the total...

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