In Anuj Jain v. Axis Bank Limited (26 February 2020), the Supreme Court was concerned with the validity of certain transactions that the corporate debtor carried out in the run up to its insolvency. Briefly, the corporate debtor, Jaypee Infratech Limited (JIL), mortgaged some of its assets in favour of certain and banks and financial institutions for loans they advanced to JIL’s parent company...
Section 29A of the IBC: Stretched Too Far?
[Shruti Kunisetty is a III Year B.A. LL.B. (Hons.) student at the National Law School of India University, Bangalore] Section 29A of the Insolvency and Bankruptcy Code, 2016 (the “IBC”) bars certain entities from submitting a resolution application in insolvency proceedings. Broadly, there are four categories of entities that are barred under this provision: (i) ineligible persons, (ii) persons...
CIRP against Government Companies: Has Supreme Court Settled the Debate?
[Soumyajit Saha is a 3rd year B.A. LL.B student at National University of Study and Research in Law, Ranchi] Last year, in Harsh Pinge v. Hindustan Antibiotics Limited, the judicial member of the National Company Law Tribunal (NCLT), Mumbai Bench dismissed the petition filed under section 9 of Insolvency and Bankruptcy Code, 2016 (IBC). This was on the ground that corporate debtor, being a...
Reciprocity Requirements in India’s Adoption of the UNCITRAL Model Law on Cross Border Insolvency
[Soham Chakraborty is a II year, BA LLB (Hons.) student at NALSAR University of Law, Hyderabad] The corporate insolvency resolution process (CIRP) of Jet Airways was one of the first instances of cross border insolvency in India. In the case, the National Company Law Tribunal (NCLAT) enabled a Dutch Court Administrator appointed by the Noord District Court in Holland to participate in the...
Can a Sole Proprietorship Initiate Insolvency Proceedings under the IBC?
[Sahithi Uppalapati is a III Year, B.A.LLB (Hons.) student at NALSAR University of Law, Hyderabad] The recent decisions of various benches of the National Company Law Tribunal conflict on the issue of whether a sole proprietorship concern is covered under the term ‘person’ under section 3(23) of the Insolvency and Bankruptcy Code, 2016, which is determinative of who is entitled to initiate a...
Insolvency of Financial Service Providers and Third Party Rights Under Securitisation Contracts
[Richa Saraf is an Advocate] The Insolvency and Bankruptcy Code, 2016 (“Code”) does not, in general, deal with insolvency of financial service providers (“FSPs”), as FSPs are seen to be systemic and complex structures engaging in unique transactions. However, the collapse of Dewan Housing Finance Corporation Limited (“DHFL”) led to the notification of the Insolvency and Bankruptcy (Insolvency and...
The Expanding Scope of Commercial Wisdom in the IBC: Numbing all Checks and Balances?
[Kartikey Sanjeev Bhalotia and Arshit Kapoor are 2nd year students at the National Law University Odisha] While overruling a decision of the National Company Law Appellate Tribunal (NCLAT), the Supreme Court in Maharashtra Seamless Limited v. Padmanabhan Venkatesh (decided on 22 January 2020) accepted the decision of the committee of creditors (CoC) approving the appellant’s resolution plan which...
Safeguarding Promoters’ Interest in Insolvent Companies: Recent Judgments of the NCLAT
[Soham Chakraborty is a II year, BA LLB (Hons.) student at NALSAR University of Law, Hyderabad] A series of judgments of the National Company Law Appellate Tribunal (“NCLAT”), as discussed herein, have led to some important developments regarding the rights of promoters when it comes to regaining control of their company under the Insolvency and Bankruptcy Code, 2016 (“the Code”). These judgments...
NCLAT’s Ruling on Exclusion of Lease and Rental Operational Debt
[Chetan Saxena is a 4th-year student from the Institute of Law, Nirma University, Ahmedabad] The National Company Law Appellate Tribunal (NCLAT) in Ravindranath Reddy v. G. Kishan (17 January 2020) held that rental dues arising out of a lease agreement do not fall under the definition of “operational debt” under section 5(21) of the Insolvency and Bankruptcy Code, 2016 (IBC). The determination of...
The Limits of Comity: Refusal to Recognise Foreign Insolvency Proceedings
[Aditi Mozika is a IV year B.Sc. LL.B. (Hons.) student at Gujarat National Law University] The recent decision of the National Company Law Appellate Tribunal (NCLAT) in the Jet Airways case has ushered in the era of cross border insolvency in India.[1] Accordingly, the Resolution Professional and the Dutch Trustee – the administrator in bankruptcy of Jet Airways appointed by the Dutch...
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