[Pratik Datta is a researcher at the National Institute of Public Finance and Policy (NIPFP)] India experienced a major structural change with the enactment of the Insolvency and Bankruptcy Code, 2016 (“IBC”). Since then, India’s ranking under the Insolvency head in the World Bank Group’s Doing Business report has sharply risen from 136 to 103. India was also awarded the Global...
Invocation of Unmatured Corporate Guarantee during Moratorium under Bankruptcy Law
[Himanshu Handa is an Associate with UKCA and Partners, a Law Firm in New Delhi] Introduction In Axis Bank Limited v Edu Smart Services Private Limited, the National Company Law Tribunal (“NCLT”), Delhi had rejected a plea from the financial creditor i.e. “Axis Bank” against the corporate guarantor i.e. Edu Smart in respect of its claim pertaining to a corporate guarantee in the insolvency...
Corporate Insolvency and the Admission of a Debt under the Negotiable Instruments Act
[Siddharth Kumar is a III year BBA LLB (Hons.) student at Vivekananda School of Law and Legal Studies, New Delhi and can be reached at [email protected]] The National Company Law Appellate Tribunal (“NCLAT”) in Sudhi Sachdev v. M/s APPL Industries Ltd. held that the pendency of a case under sections 138 and141 of the Negotiable Instruments Act, 1881 (“NI Act”) amounts to an admission of...
Role of the Adjudicating Authority in Considering a Resolution Plan
[Richa Saraf and Ananya Raghavendra are with Vinod Kothari Consultants Pvt Ltd] The insolvency resolution process of Binani Cements has been through various twists and turns. On 19 November 2018, the Supreme Court in Rajputana Properties Pvt. Ltd. v. UltraTech Cement Ltd. & Ors. dismissed Dalmia Bharat’s plea to seek a stay on Ultratech’s bid for Binani Cement, thereby upholding the UltraTech...
Whether a Refund of Advance is an Operational Debt
[Richa Saraf and Shreya Jain are with Vinod Kothari Consultants Pvt. Ltd.] It is not an unusual business practice to collect advance monies from consumers before providing goods or services to them. In such a scenario, consumers constantly bear the risk of not being able to recover the advance amount in the event the provider of goods or services abruptly ceases operations and, as such, also...
Corporate Insolvency and the “Fitter Bidder”
[Jaskiran Kaur is an associate at IndusLaw] The National Company Law Appellate Tribunal (“NCLAT”) on 14 November, 2018 gave a go – ahead to the revised bid of Ultratech Cement Limited (“Ultratech”) for the acquisition of debt-ridden Binani Cement Limited (“Binani Cement”), while ruling that the resolution plan submitted by the competitor Dalmia Bharat through its group firm Rajputana Properties...
Supreme Court on the Applicability of the Limitation Act to Insolvency Proceedings
[Surbhi Jaju and Pulkit Chaturvedi are associates at Lakshmikumaran and Sridharan Attorneys] Introduction The conundrum of whether the Limitation Act, 1963 (‘Limitation Act’) applies to the proceedings initiated under the Insolvency and Bankruptcy Code, 2016 (‘Code’) has confused the stakeholders since the inception of the Code. The Code was formulated primarily to provide a mechanism to...
Supreme Court on Insolvency Resolution by Operational Creditors
[Akhil Kumar and Ayushi Singh are Fourth Year and Third Year BA LLB (Hons.) students respectively at NUALS, Kochi] Petitions filed under section 9 of the Insolvency and Bankruptcy Code, 2016 (the Code) have received scrutiny before the adjudicating authority, being the National Company Law Tribunal (NCLT), the National Company Law Appellate Tribunal (NCLAT) as well as the Supreme Court on various...
Retrospective Operation of the Limitation Act: Impact on Insolvency Proceedings
[Vaidehi Soni and Pulkit Khare are 4th year B.A., LL.B. (Hons.) students at The National University of Advanced Legal Studies, Kochi] Background The Insolvency Bankruptcy Code, 2016 (“Code”) allows creditors to approach the adjudicating authority, being the National Company Law Tribunal (“NCLT”), to seek a collective procedure for insolvency resolution. However, there were rising concerns before...
Liquidation Process (Second Amendment) Regulations: An Analysis
[Richa Saraf and Devisha Dhanuka are with Vinod Kothari Consultants Private Limited] By way of a notification dated 27 March 2018, the very first amendment was brought to regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (“Regulations”) with effect from 1 April 2018 to permit a sale of the corporate debtor as a going concern. The insertion was...
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