[Shivam Ahuja is a Final year B.A.,LL.B. at Jindal Global Law School, Sonepat] Introduction A charge as defined in section 2(16) of the Companies Act, 2013 is created over an asset to secure the repayment of a debt. The terms and conditions of the charge are governed by the contract between the parties. Some contracts allow for creation of a subsequent charge while some do not, while some warrant...
Corporate Insolvency: Fraudulent Transactions and Look-Back Period
[Richa Saraf is a Legal Advisor at Vinod Kothari Consultants Pvt Ltd] A combination of sections 45, 49, 66 and 69 of the Insolvency and Bankruptcy Code, 2016 (the Code) requires and empowers the liquidator to apply to the National Company Law Tribunal (NCLT) for appropriate orders in case the Liquidator comes across any vulnerable transactions during the process of liquidation. Such transactions...
Section 29A of the Insolvency and Bankruptcy Code, 2016: The Ambit Narrows
[Rudresh Mandal is a 4thyear student at NALSAR University of Law and Mallika Sen is a 3rdyear student at National Law School] Section 29A of the Insolvency and Bankruptcy Code, 2016, (‘IBC’) has been heavily criticised for casting a net exceedingly wide for preventing maximisation of pay-outs to creditors merely because the bidder is the promoter of the corporate debtor, or for ignoring the...
Subordination of Operational Creditors under IBC: Whether Equitable?
[Vinod Kothari and Sikha Bansal are at Vinod Kothari & Company and can be reached at [email protected]] Introduction Section 53 of the Insolvency and Bankruptcy Code, 2016 (IBC) puts unsecured financial creditors above the claims of the governments. These unsecured financial creditors may actually be even related parties and, therefore, the underlying financial transaction may be...
The Battle against Non-Performing Assets
[Pranjal Doshi is an MCL Candidate, University of Cambridge] The foundation of an enduring banking industry lies in robustly crafted recovery mechanisms. It promotes the stable existence of the borrower-lender relationship. Incongruously, non-performing assets (“NPAs”) have grown substantially in India from 9.2% (September 2016) to 10.2% (September 2017)[1], amounting to ₹8,36,782 crores (October...
Can Liquidator’s Outreach Grab Guarantor’s Assets?
[Sikha Bansal is a Senior Associate at Vinod Kothari & Company and Shreya is a B.A., LL.B. (Hons.) student at Rajiv Gandhi National University of Law, Punjab. The authors can be reached at [email protected]] In Punjab National Bank v. Vindhya Vasini Industries Limited, [C.P. ( IB)-1170(MB)] the issue before the National Company Law Tribunal (“NCLT”), Mumbai Bench was whether a...
Scope of Settlement under the Insolvency and Bankruptcy Code, 2016
[Kanika Sood is a lawyer based in Delhi] Pre-Ordinance Position Under the Insolvency and Bankruptcy Code, 2016 (the “Code”) a settlement between the creditor and debtor could be carried out by making an application of withdrawal under Rule 8 of the Insolvency and Bankruptcy (Application to Adjudicating Authority Rules), 2016 beforethe admission of the application by the Adjudicating Authority...
Inclusion of Home Buyers in the Insolvency Process: An Analysis
[Ashwin Mathew is with Mansukhlal Hiralal & Co, Mumbai] Introduction Pursuant to the Insolvency Law Reform Committee Report dated 3 April 2018 (“Report”), the Government has promulgated the Insolvency and Bankruptcy (Amendment) Ordinance, 2018 (“Ordinance”) on 6 June 2018 to implement the recommendations in the Report by amending the Insolvency and Bankruptcy Code, 2016 (“IBC”). One of the...
Section 29A of the Insolvency and Bankruptcy Code: A Pandora’s Box
[Garima Mehra and D Sharma are both Advocates] One of the primary objectives of the Insolvency and Bankruptcy Code, 2016 (the “Code”)) is to facilitate the adoption of a resolution plan for the corporate debtor. The resolution plan is to serve as a benefit to not only the creditors but also to the already stressed corporate debtor. Originally, section 5(25) of the Code defined a resolution...
Proof of Claim in Liquidation: Dispensable?
[Sikha Bansal is a Senior Associate at Vinod Kothari & Company and Shreya is a B.A., LL.B. (Hons.) student at Rajiv Gandhi National University of Law, Punjab. The authors can be reached at [email protected]] In SBS Transpole Logistic Pvt. Ltd. v. M.M. Cargo Container Line Pvt. Ltd. & Ors. [CA 152/2018 in CP (IB) 204(ND)/2017] before National Company Law Tribunal, New Delhi Bench...
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