[Shivankar Sukul and Vedaant S. Agarwal are IV-year law students at the National Law University, Jodhpur] The Supreme Court of India (“the Court”) in Orator Marketing Pvt Ltd v. Samtex Desinz Pvt Ltd, (“Orator”) held an interest free term loan as a ‘financial debt’ in clear defiance of the statutory scheme under the Insolvency and Bankruptcy Code, 2016 (“the Code”), which necessitates...
Invocation of Pledged Shares: Disqualification from Seat on Committee of Creditors?
[Viti Bansal is a fourth year student of B.A. LL.B. (Hons) at Gujarat National Law University] The Insolvency & Bankruptcy Code, 2016 (“IBC”), under section 21(2), provides that a related party to the corporate debtor who is also a financial creditor of the corporate debtor will have no right of representation, participation or voting in a meeting of the committee of creditors (“CoC”). The...
The NCLAT Decision in Hystone Merchants: Conferring Unruly Discretion
[Shubhansh Thakur is a fourth-year student at the Symbiosis Law School, Noida. The author wants to thank Mr. Deepak Joshi for his comments on the draft version] The National Company Law Tribunal (“NCLAT”) in Hytone Merchants Pvt Ltd v. Satabadi Investments Consultants Pvt. Ltd. has held that the Adjudicating Authority (“AA”) can refuse to admit an application that is...
Impediments to the Enforcement of Arbitral Awards under IBC
[Anuj Dubey and Amay Bahri are 4th year students at National Law University, Delhi] The jurisprudence on the interplay between the Insolvency and Bankruptcy Code 2016 (IBC) and the Arbitration and Conciliation Act 1996 (Arbitration Act) is in nascent stages. While friction arises during multiple stages of the proceedings under both laws, the conflict arising out of enforcement of arbitral awards...
Call for Submissions: Centre for Insolvency and Bankruptcy Studies Blog
[Announcement on behalf of the Centre for Insolvency and Bankruptcy Studies Blog] The Centre for Insolvency and Bankruptcy Studies Blog welcomes all kinds of submissions in the form of articles, research pieces, opinions, case comments and short notes dealing with any contemporary and pertinent development related to insolvency and bankruptcy laws. Originality All submissions must be original...
Pre-Packaged Insolvency: A Stumbling Block for the MSME Sector
[Gunjan Singh and Umang Chaturvedi are 3rd year B.A. LL.B. (Hons.) students at Rajiv Gandhi National University of Law, Punjab] The disruption of economic processes and business cycles owing to the pandemic caused a major blow to the functioning of the industrial sector. Additionally, it impacted the entities who had already borrowed money from the market or financial institutions, as they were...
Priority and Value of Security Interest Cannot be a Ground for Challenge of Resolution Plan
[Anugya Mukati and Kirti Dhoke are undergraduate students at the National Law Institute University, Bhopal] The Supreme Court of India in a recent judgment in the matter of India Resurgence Arc Private Limited v. Amit Metaliks Limited, held that a Resolution Plan that has been approved under the Insolvency and Bankruptcy Code ( “the Code”) cannot be challenged by a dissenting financial creditor...
Judicial Misinterpretation of Scope of Sanctions in Scheme of Arrangement
[Vasu Aggarwal is a student at National Law School of India University. He is grateful to Prof. Rahul Singh for inspiring him to write on this topic, and thankful to Prof. Rahul Singh and Prof. Umakanth Varottil for their comments on the earlier drafts of this post] This post argues that courts have misinterpreted the scope of ex-ante sanction requirement for compromise and arrangement due to the...
Terminating Contracts with the Corporate Debtor during CIRP: Revisiting the Position
[Vaishali Movva is an associate at a law firm and a practicing advocate in Bengaluru] The provisions of the Insolvency and Bankruptcy Code 2018 (‘IBC’) and the regulations thereunder mandate that a moratorium be imposed on the assets of the corporate debtor during the corporate insolvency resolution process (‘CIRP’). While the moratorium does not explicitly prohibit a third party from terminating...
Supreme Court on Applicability of IBC Moratorium to Cheque Bounce Cases
[Jai Anant Dehadrai is an Advocate based in New Delhi and Arnav Sinha is an Associate at Dehadrai and Company, New Delhi] The Supreme Court in its recent and landmark decision of P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd., has put to rest the debate as to whether criminal proceedings under section 138 and section 141 of the Negotiable Instruments Act, 1881 (“NI Act”) would be stayed in...
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