[Tushar Kumar is an Associate at Ernst Young Global Delivery Services] Section 29A of the Insolvency & Bankruptcy Code, 2016 (IBC) makes certain persons ineligible to buy the assets of the insolvent corporate debtor, owing to the fact that they are either undesirable or have, due to their misconduct in the past, contributed to the present insolvency of the corporate debtor. It is pertinent to...
Balance Sheet as Valid Acknowledgement of Debts: Flawed Reasoning to a Judicious Conclusion?
[Malika Tiwari is a 4th year B.Com., LL.B. (Hons.) student at Institute of Law, Nirma University, Ahmedabad] Section 18 of the Limitation Act, 1963 (“the Act”) provides for the admission of debts owed by a debtor to its creditor by providing a written acknowledgement, duly signed by him or his authorised agent. Such an acknowledgement marks the commencement of a fresh period of limitation for the...
Supreme Court Widens Scope of Moratorium on Criminal Proceedings
[Prachi Gupta is a fourth-year B.A., LL.B. (Hons.) student at the Institute of Law, Nirma University] On 1 March 2021, the Supreme Court in the case of P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd. has put an end to a much-debated topic of applicability of moratorium under section 14 of Insolvency and Bankruptcy Code, 2016 (“IBC”) to proceedings of dishonour of cheque under section 138 of...
Indus Biotech v Kotak: A Step in the Right Direction?
[Ankur Singhal and Vasavi Khatri are 5th year B.A., LL.B. (Hons.) students at National Law School of India University, Bangalore] On 26 March 2021, the Supreme Court, in Indus Biotech Private Limited v. Kotak India Venture Fund ruled that an arbitration petition would not be maintainable after the insolvency resolution petition under section 7 of the Insolvency and Bankruptcy Code is admitted...
Standards for Application of the Limitation Act to the IBC
[Karan Kamath is an Advocate practicing at Mumbai] In the short span of existence of the Insolvency and Bankruptcy Code (“Code”), the Supreme Court has been called upon on a considerable number of occasions to decide whether the Limitation Act, 1963 (“Act”) is applicable to proceedings under the Code. On March 22, 2021, in another of such decisions, the Supreme Court inched towards settling the...
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...
Caught between PMLA and IBC: The Bhushan Power-JSW Saga
[Aniket Aggarwal is a commercial litigator and technology lawyer practicing in New Delhi] A prima facie look at the Prevention of Money Laundering Act, 2002 [“PMLA” or “the Act”] and the Insolvency and Bankruptcy Code, 2016 [“IBC” or “the Code”] belies exclusivity and distinctness between the legislations. Indeed, the Delhi High Court observed these laws to be consistent with each other in light...
A Case for Exclusion of Schemes of Arrangement from Liquidation
[Sikha Bansal is a Partner at Vinod Kothari & Company] The concerns around schemes of arrangement under section 230 of the Companies Act, 2013 in the background of insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC) have been partly addressed with the ruling of Supreme Court (SC) in Arun Kumar Jagatramka v. Jindal Steel and Power Ltd. The SC has held that the...
Supreme Court on the Validity of Ipso Facto Clauses during Insolvency
[Ridhi Arora is a III Year B.A., LL.B (Hons.) student at Gujarat National Law University and Varun Singh a III Year B.A., LL.B (Hons.) student at Rajiv Gandhi National University of Law] On March 8, 2021, the Supreme Court of India in Gujarat Urja Vikas Nigam Limited v. Amit Gupta ruled that the provisions of the Insolvency and Bankruptcy Code, 2016 (‘IBC’) prevail over power purchase agreements...
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...
Recent Comments