[Siddharth Jasrotia is a IV year student at the Maharashtra National Law University, Mumbai] The National Company Law Tribunal’s (“NCLT”) power to allow the withdrawal of insolvency petition has been subject to immense judicial scrutiny over the past few years, often resulting in conflicting outcomes. The inception of section 12-A in the Insolvency and Bankruptcy Code, 2016 (“IBC”) further...
Rising Haircuts: A Death Knell for the IBC?
[Simran Lunagariya and Priyanshi Jain are fourth-year B.Com LL.B. (Hons.) students at Nirma University, Ahmedabad (Gujarat)] A competent insolvency procedure assists creditors and corporate debtors (“CDs”) in recognizing whether the stressed company is approaching financial collapse and in finding an amicable solution for the same. To this end, it is important that the insolvency procedure is...
The Dichotomy of Special Courts: Contrasting the Companies Act and the IBC
[Rhythm Buaria and Payal Chandra are advocates practicing before courts and tribunals in Delhi] Recently, a Single Judge of the Bombay High Court concluded, in Satyanarayan Bankatlal Malu v. Insolvency and Bankruptcy Board of India, that offences under the Insolvency and Bankruptcy Code, 2016 (“IBC”) can only be tried by the Metropolitan Magistrate or Judicial Magistrate First Class exercising...
Supreme Court on Whether Advance Paid is an Operational Debt under IBC
[Rohit Sharma is a Partner at Mamta Binani & Associates, Mumbai By way of its judgment dated 4 February, 2022 in Consolidated Construction Consortium Limited v. Hitro Energy Solutions Private Limited, the Supreme Court held that an amount given as advance to another person in lieu of availing goods or service shall be construed as an operational debt and the payer of the amount shall come...
SBI v. Mahendra Kumar Jajodia: Resolving Ambiguity in the Personal Guarantor Jurisprudence?
[Dhaval Hemesh Sheth is a second-year student at National Law University, Delhi.] On 27 January 2022, the National Company Law Appellate Tribunal (‘NCLAT’) in the matter of State Bank of India v. Mahendra Kumar Jajodia (‘Mahendra Kumar case’) ruled that an application filed under section 95(1) of the Insolvency and Bankruptcy Code, 2016 (‘Code’) before the National Company Law Tribunal (‘NCLT’)...
Can NCLT Direct Distressed Entity for Settlement by Rejecting CIRP Application?
[Deevanshu Jaswani is a 4th year B.A. LL.B. (Hons.) student at National Law University, Odisha.] This post attempts to analyse two different judgments to highlight that in IBC, the role of the adjudicating authorities has been clearly specified. According to section 7(5) of the IBC, only two options are provided to the adjudicating authorities while dealing with the petition to initiate Corporate...
Rectifying the Law: CoC Approval for Withdrawal of CIRP Proceedings
[Pradhyuman Singh is a V year student of law from Gujarat National Law University, Gandhinagar] On 4 January 2022 in Vinayak Deshpande v. Nexo Industries, the National Company Law Appellate Tribunal (“NCLAT”), Chennai allowed a corporate debtor to settle the matter with the creditor. Accordingly, the National Company Law Tribunal (“NCLT”) was directed to allow the application for withdrawing the...
Ebix Singapore v. Educomp: Clearing the Muddied Waters
[Aadya Bansal and Navya Saxena are 4th year students at National Law Institute University, Bhopal] On 13 September 2021, the Supreme Court, in its landmark decision in Ebix Singapore Private Ltd. v. Committee of Creditors of Educomp Solutions Ltd., provided a much needed conclusion to a recurring debate under the Insolvency and Bankruptcy Code, 2016 by ruling that a resolution plan approved by...
Delhi High Court on the Overriding Effect of IBC over PMLA
[Pallavi Meena is a IV Year BSW, LL.B (Hons.) student and Ridhi Arora a IV Year B.A., LL.B (Hons.) student, both at Gujarat National Law University] In Nitin Jain, Liquidator, PSL Limited. v. Enforcement Directorate (15 December 2021), the Delhi High Court ruled that the power under the Prevention of Money Laundering Act, 2002 (“PMLA”) to attach properties ceases to exist when an order of...
SC Scrutinizes NCLT’s Powers Conferred under Section 7(5) of IBC
[Govind Gupta and Roshi Surele are 3rd Year BA. LL.B. students at the Institute of Law, Nirma University, Ahmedabad] The Insolvency and Bankruptcy Code, 2016 (“IBC”) is a complete code in itself. Both the National Company Law Tribunal (“NCLT”) and the National Company Law Appellate Tribunal (“NCLAT”) derive their powers in insolvency matters from the IBC itself while their jurisdiction is...
Recent Comments