[Isha Gupta is a III Year B.A.LLB. (Hons.) student at National Law University, Delhi] The legislature and the judiciary have both adopted a rather pro-creditor approach towards insolvency in the recent past, which is apparent from the enactment of Insolvency and Bankruptcy Code 2016 (“IBC”) and the decision of the Supreme Court in Swiss Ribbons Pvt Ltd v Union of India, wherein the Court upheld...
NCLAT Interprets the Definition of “Financial Debt” under Insolvency Law
[Medhashree Verma and Kavya Lalchandani are 3rd year B.B.A, LL.B. students at National Law University Odisha, Cuttack] In a recent judgment in Jignesh Shah v. IL&FS Financial Services Limited & Anr., the National Company Law Appellate Tribunal (NCLAT) dealt with the interpretation of the term ‘financial debt’ under the Insolvency and Bankruptcy Code, 2016. It is only when the debt...
Supreme Court Enhances Information Rights of Directors in Insolvency Process
In Vijay Kumar Jain v. Standard Chartered Bank (decided on 31 January 2019), the Supreme Court was concerned with the question whether under the Insolvency and Bankruptcy Code, 2016 the resolution professional is obligated to provide to members of the suspended board of directors all relevant documents pertaining to the corporate insolvency resolution process, including the resolution plan. The...
Initiation of Corporate Insolvency Resolution Process for Arrears in Lease Transactions
[Tejpal Singh Rathore is a 4th-year B.B.A. LL.B. (Hons.), student at Gujarat National Law University in Gandhinagar] Corporate Insolvency Resolution Process (“CIRP”) can be invoked by a financial creditor, an operational creditor and a corporate debtor itself. An application can be filed by a financial creditor under section 7 of Insolvency and Bankruptcy Code, 2016 (“Code”) if there is any...
An Overview of Exceptions to Moratorium under the Insolvency And Bankruptcy Code
[Radhika Malpani is a 3rd year B.B.A., LL.B student at National Law University, Jodhpur] With the enactment of the Insolvency and Bankruptcy Code, 2016, (“Code”) a unified framework to deal with insolvency has been set in place. Previously, insolvency was dealt under multiple statutes and scattered provisions embedded with numerous complexities. With the introduction of the Code, the liquidation...
Supreme Court Upholds Constitutionality of the Insolvency and Bankruptcy Code
“The defaulter’s paradise is lost. In its place, the economy’s rightful position has been regained”[1] It is not at all surprising that those affected by debt recovery and insolvency legislation, being primarily debtors, would mount constitutional challenges to those legislation. Earlier examples include challenges to the Sick Industrial Companies (Special Provisions) Act, 1985 (D Ravikumar v...
Attachments of Properties Subject to a Moratorium
[Rohit Sharma is a Partner at Mamta Binani & Associates] The promulgation of the Insolvency and Bankruptcy Code, 2016 (‘Code’) has led to an enormous number of applications being filed before the adjudicating authority for initiation of the corporate insolvency resolution process (‘CIRP’) against a company. The purpose of the Code, according to the Report of the Insolvency Law Committee, was...
Binani Judgment: A Ray of Hope for Operational Creditors
[Ashish Rana is an Advocate on Record in the Supreme Court of India] The Insolvency and Bankruptcy Code, 2016 (‘I&B Code’) provides for resolution of insolvency of persons in a time bound manner along with the maximisation of value of such person’s assets, to promote entrepreneurship, availability of credit and to balance the interests of all stakeholders. Under the I&B Code, upon...
Rights of Preference Shareholders under the Insolvency Code
[Shubham Jain and Kannan Jhunjhunwala are BA.LLB (Hons.) students at National Law University, Delhi] The National Company Law Appellate Tribunal (NCLAT) in Brij Bhushan Singhal v Bhushan Steel Ltd. (10 August 2018) allowed for preference shares to be redeemed outside the purview of section 55 of the Companies Act, 2013 when required by the resolution plan. In this case, with Tata Steel Ltd. as...
The Fate of an Operational Creditor: A Brief Update
[Shayonee Dasgupta is an independent legal practitoner, and also works a consultant with IDIA] Ever since the Insolvency and Bankruptcy Code (IBC) was enacted in 2016, it has been the focal point of several cases before the Supreme Court and various High Courts across the country. One of the key provisions of the IBC that has been the subject matter of a majority of such petitions is the...
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