TagDebt Finance

Supreme Court Holds Tax Authorities to be Secured Creditors: Quandary Revived

[Sikha Bansal is a Partner and Neha Sinha an Executive at Vinod Kothari & Company. They can be reached at [email protected]] Earlier this week, in State Tax Officer v. Rainbow Papers Limited (6 September 2022), the Supreme Court (‘SC’) dealt with the question whether the provisions of Insolvency and Bankruptcy Code, 2016 (‘IBC’), especially section 53, overrides section 48 of the...

Supreme Court on Debentureholders’ Rights under Intercreditor Agreements

[Sikha Bansal is a Partner at Vinod Kothari & Company and can be reached at [email protected]] A well-developed corporate bond market not only provides cost-effective funds to the issuer, but it also enables lenders such as banks and other financial institutions to streamline their asset-liability mismatches. As such, there have been considerable efforts to facilitate the development...

Supreme Court Decision in Vidarbha: Return to the Pre-IBC Era

[Abhismita Goswami is a Trainee Associate at Mindspright Legal, Mumbai] An application for initiating a corporate insolvency resolution process (“CIRP”) under the Insolvency and Bankruptcy Code, 2016 (“IBC”/ “Code”) can be filed with the National Company Law Tribunal (“NCLT”) by the financial creditors (“FCs”) and operational creditors (“OCs”) of a corporate debtor (“CD”), under section 7 and...

Section 14, SARFAESI Act: Settling A Jurisdictional Conundrum

[KV Kailash Ramanathan is a 4th year B.A., LL.B. (Hons.) student at the National University of Advanced Legal Studies (NUALS), Kochi] Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (“SARFAESI Act” or “Act”) provides for judicial assistance to creditors in enforcing their security interest as envisaged under section 13 of the Act. A...

Mortgage on Movable Property: Whether an Attractive Option for Lenders?

[Sikha Bansal is a Partner and Shraddha Shivani an Executive at Vinod Kothari & Company] Pledge, hypothecation and mortgage are all forms of security interest, albeit with different features. Although the common objective of any form of security interest is to create a right in rem (rather than in personam) in favour of the lender, the effectiveness of the security interest would depend on...

P&H High Court on SARFAESI Act and the Right of Redemption

[Velpula Audityaa is an Advocate practicing before the Madras High Court and trial courts in Chennai. He can be contacted at [email protected]] Recently, a division bench of the Punjab & Haryana High Court in Pal Alloys & Metal India Private Limited v. Allahabad Bank (2021 SCC OnLine P&H 2733) had an occasion to consider the effect of the 2016 amendment to section 13(8) of the...

Applicability of Triangular Set-off in the Indian Insolvency Regime

[Ankit Singh Rajput and Pragati Yadav are fourth-year law students at Faculty of Law, Jamia Millia Islamia, New Delhi] Triangular set-off occurs when A owes a debt to B, B owes a debt to C and C owes a debt to A. In the triangular set-off, A attempts to set off the amount it owes to B against the amount that C owes to A. The validity of triangular set-off in the bankruptcy context, as...

A Look at the Recently Redefined Scope of Section 9 of the IBC

[Jagrati Maru and Vaishnavi Srivastava are 5th year B.A. LL.B. (Hons.) students at Gujarat National Law University in Gandhinagar] Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) empowers an operational creditor to file an application to initiate the corporate insolvency resolution process (CIRP) against a corporate debtor. The section further lists out certain requirements which need...

Green Bonds in India: The Present and What Next

[Naga Sai Srikar HK is a fifth-year B.A., LL.B. (Hons.), student at School of Law, CHRIST (Deemed to be University) Bangalore] Green bonds (GBs) have lately gained prominence globally and are being seen as a lucrative opportunity by both investors and corporations looking at debt financing options. The Covid-19 pandemic has nudged policy makers across the world to rethink on priorities and adopt...

Hanging by a Thread: The Saga of Interest-Free Loans under the IBC

[Ojaswi Shankar is with ICICI Bank in Mumbai] In Orator Marketing Private Limited v. Samtex Desinz Private Limited (26 July 2021), the Supreme Court held that a person who has advanced an interest-free loan to a corporate entity would be a ‘financial creditor’ and, hence, competent to initiate a corporate insolvency resolution process (“CIRP”) under section 7 of the Insolvency and Bankruptcy...

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