Gigantic legislation like IBC,2016 will definitely face hurdles, bumps, pits in its journey towards implementation. Insolvency & Bankruptcy Board of India (IBBI)has shown enormous anticipation in appreciating the improvements required from time to time on the basis of experience it got through judgments of NCLT, NCLAT, and Supreme Court. Besides, there is a continuous system...
The basic foundation on which the Insolvency and Bankruptcy Code 2016 (IBC) is laid, is that of a default by a Corporate Entity in it’s payment to any Creditor. This could be any creditor, be it a Loan providing Bank / NBFC or any Goods and Services Creditor. Thus if a Corporate Debtor (CD) defaults...
Pre Packaged Insolvency Resolution Process (PPIRP) was introduced for Micro, Small, and Medium Enterprises (MSME) by way of the Promulgation of the Ordinance by the President of India on 4th April 2021. The Ordinance was subsequently enacted by Parliament by way of the Insolvency and Bankruptcy Code (Amendment) Act 2021 and after receiving the assent...
India’s bankruptcy ecosystem needs to be more efficient to develop a market for stressed assets in a post-covid world, chief economic adviser (CEA) to the government Krishnamurthy Subramanian said on Wednesday. The bankruptcy framework can be improved by enabling bankers to take economically efficient decisions, which entail assessing the fair value of sinking firms with the...
An authorized signatory, Mr. Sanjay Gupta on behalf of M/s. Neesa Infrastructure Limited filed the petition under Section 10 of The Insolvency and Bankruptcy Code, 2016 read with Rule 7 of The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, as operational creditor/applicant. The National Company Law Tribunal (NCLT) dismissed the application for the Corporate...
The Supreme Court held that an admission made in a counter-affidavit of the Corporate Debtor, in a prior S.7 application, can be relied upon by the creditor in future S.7 applications for the purpose of establishing that a default has occurred. A document filed in the earlier petition that was dismissed as withdrawn can be...
“The Corporate Debtor had no right to claim the margin money after the invocation of Bank Guarantee during the Moratorium under Section 14 of IBC” Facts The Appellant is one of the Financial Creditors of the CD from whom the CD had availed various loans including an irrevocable Bank Guarantee. The CD deposited margin money of Rs.40,50,000/-...
Lok Sabha passed the Bilateral Netting of Qualified Financial Contracts Bill, 2020, which allows for the enforcement of netting for qualified financial contracts. This bill is passed with the aim to bring financial stability. ‘Bilateral netting’ refers to offsetting claims arising from dealings between two parties to determine the net amount payable or receivable from one...
In Edelweiss Asset Reconstruction Co. Ltd. v. M/S K.K. Kadri Paper Mills Pvt. Ltd., the NCLT Ahmedabad held that even though the CoC is empowered under S.33 of the Code to authorize liquidation of the corporate debtor, they need to show relevant material to throw light on the need for liquidation, and in the absence...
This case brings us to the important issue of the involvement of adjudicating authority in the finalization of the resolution plan. Where once a resolution plan has been approved by the committee of creditors, the statutory mandate on Adjudicating Authority under section 31(1) is to ascertain that a resolution plan meets 37 requirements of sub-sections (2)...
In the case of Hindustan Construction co. ltd. Vs. state of Bihar and ors an important issue was confronted in front of the Supreme Court and that is the difference between conditional and unconditional guarantee. Since, a Bank Guarantee is the common mode, of securing payment of money in commercial dealings as the beneficiary, under...
Lok Sabha passed the Bilateral Netting of Qualified Financial Contracts Bill, 2020, which allows for enforcement of netting for qualified financial contracts. This bill is passed with aim to bring financial stability. ‘Bilateral netting’ refers to offsetting claims arising from dealings between two parties to determine the net amount payable or receivable from one party to...
Key amendments: Applications u/s 7,9,10, the applicant shall serve a copy of application to the registered office of the corporate debtor and to the IBBI, by the registered post or speed post or by hand or by electronic means, before filing with the Adjudicating Authority; The Application form 1, Form 5, and form 6 has been amended...
The Hon'ble NCLAT set aside the order passed by the Adjudicating Authority (NCLT Mumbai Bench) and restored the insolvency petition (Corporate Insolvency Resolution) against Mittal Corporation Ltd. NCLAT rejected the plea filed by Punjab Natioanl Bank to initiate insolvency proceedings against Mittal Corp and directed it to decide afresh “expeditiously”. It was raised that PNB...
Recently Supreme Court had directed banks not to label the loans as non-performing assets even if there is default. It is important to stabilise and uplift the economy and the financial system is of utmost importance. Thus, a 3- member panel experts called as Mehrishi committee is set up by finance ministry headed by former comptroller...
As per our reports, in the matter of Reliance communications (RCom) chairman Anil Ambani, there has been lately some remarkable orders. In late August, Delhi High Court had put on hold the insolvency resolution process (IRP) proceedings against Anil Ambani in relation to the recovery of Rs 1,200 crore loans given by SBI to his...
Three year old insolvency proceeding of Auto Amtek may now move into liquidation due to winning bidder invokes “force Majeure” clause of its Resolution plan. Amtek’s Committee of Creditors (CoC) in January approved Deccan Value's resolution plan with the force majeure option for the first time ever, and the NCLT approved it in July 2020. Deccan...
NCLAT set aside the Insolvency proceeding of Sarda Agro Oils by stating the reason that the claims were filed three years after declaring the account non-performing asset. This 3 judge- bench gave the ruling that, “the date of default is computed from the date of declaration of account as a NPA (Non-Performing Asset) and such...
The petition was filed by the two flat buyers who had jointly booked a unit in APIL Sushant Golf City Lucknow and one of them has also booked separate unit in same project, against the Ansal Properties and Infrastructure Ltd (APIL), In the said petition It admitted the insolvency plea against APIL based on the...
Introduction India is on the verge of becoming one of the fastest-growing economies of the world. India being in its developing stages in a number of sectors, yet, it has never looked back & has continued to excel rapidly. For a fast-growing economy like India, where even multinational companies are investing rigorously, it is imperative...
In 2016, the 9 (“Code”) was introduced in India. In such a short span of time, the Code has established its jurisprudence. However, the code requires reforms to keep up with the insolvency regime across the globe and to help the Indian economy overcome territorial boundaries. In January 2019, the centre set up an 11-member...
Looking at the challenges in the Company Law, the Government of India came up with The Insolvency & Bankruptcy Code, 2016 (“IBC”), a mechanism for time-bound resolution of dispute of corporate entities in financial distress. Since, this code has been an evolving legislation therefore, in past few years it is noticed that many ordinances and...
Given, the limitations of the 9, 2016 (“IBC”) in determining the value of disputed claims during the resolution process, most resolution plans admit the disputed claims with their repayment being dependent on the adjudication of the claim post the approval of the resolution plan. Such an admission of claims has been seen as a method to improve insolvency procedure...
The time-bound resolution of distressed corporate entities is the most important objective of the Insolvency & Bankruptcy Code, 2016 (“IBC”). The Corporate Insolvency Resolution Process (“CIRP”) introduced by the IBC was supposed to lead the charge in achieving this end. Unfortunately, the average time taken for CIRPs that yielded resolution is more than the statutory...
Facts: The question of law which was framed by the National Company Law Appellate Tribunal (NCLAT) for its decision: “Whether the time limit prescribed in Insolvency & Bankruptcy Code, 2016 for admitting or rejecting a petition or initiation of insolvency resolution process is mandatory?” The question before the NCLAT was as to whether time of...
When a company goes into liquidation its assets are sold to repay the creditors and business closes down. The liquidation process in India is governed by Insolvency and Bankruptcy Code, 2016. The liquidation process in India is initiated by filing an application as per the terms and requirement by IBC, 2016. Once the order is approved and...
The COVID- 19 pandemic & its consequential lockdown has affected businesses all over the world. To mitigate its impact, governments of various countries have amended their respective insolvency laws & adjudicatory processes. India too has taken certain steps to modify its insolvency law i.e., the Insolvency & Bankruptcy Code (IBC), 2016. Section 10A was introduced by...
As per our reports, financial consultancy firm Duff & Phelps has dragged the Insolvency & Bankruptcy Board of India (IBBI) to court, over an order against a senior advisor in its restructuring practice. The Insolvency Regulator, IBBI penalized Vijay Kumar Garg, the Resolution Professional (RP) for Gitanjali Gems, Nakshatra World & other companies which were...
As per our reports, in a judgement, the Adjudicating Authority has allowed the liquidator to sell the assets of a company which were attached by the investigative agencies. As per the order of the National Company Law Tribunal, Kolkata Bench, passed on 22nd July, 2020, the liquidator is permitted to sell the assets of the...
Ruling of the National Company Law Appellate Tribunal (NCLAT) in Flat Buyers Association v. Umang Realtech Pvt. Ltd. is of significance. It not only affects the existing corporate insolvency resolution process (CIRP) with respect to real estate developers, but it also grants the promoter of the group an opportunity to participate in the process as...
Due to poor management of cash or less cash inflow than what is expected, the company can be declared insolvent by performing certain insolvency proceedings where the liquidator would acquire all the assets of the company, evaluate them & liquidate those assets in order to pay off the debts. Cross-Border Insolvency refers to the treatment...
Insolvency is a situation where a legal person (including companies) is not able to pay to debts to its creditors, when they become due & payable. Corporate insolvency may involve several parties such as creditors, shareholders, directors & managers of the company, employees & customers etc. Financial & management consultants, advocates, bankers etc. also play...
Recently, the Insolvency & Bankruptcy Board of India (IBBI) has proposed to issue guidelines for imposing a limit on the number of assignments to be handled by an Insolvency Professional (IP) at a certain point of time. Setting a limit on the number of assignments to be taken up by Insolvency Professionals (IPs) is an...
As per our reports, the National Company Law Tribunal, Mumbai Bench, on 03rd June, 2020 has held that in view of Section 3(23) of Insolvency & Bankruptcy Code, 2016, a foreign entity can also file a petition for initiation of Corporate Insolvency Resolution Process under Section 9 of IBC. A plea under Section 9 of...
As per our reports, the Insolvency & Bankruptcy Board of India (IBBI) recently in a discussion paper, restricted the number of assignments to be handled by Insolvency Professional (IPs) under the Corporate Insolvency Resolution Process & Liquidation (including Voluntary Liquidation Process under Section 59 of the Insolvency & Bankruptcy Code, 2016. Restriction has not...
As per our reports, the special insolvency resolution framework for MSMEs recommends a lot shorter time period for resolution of a company in 90 days rather than 300 days as provided under the Insolvency & Bankruptcy Code for completion of the procedure and permits promoters of a defaulting MSME enterprise to present a resolution plan....
As per the reports, the National Company Law Appellate Tribunal (NCLAT) has held that liquidation process of a company under the IBC holds precedence over the result of arbitration proceedings under IBC. Objections raised to Bharat Heavy Electricals Limited (BHEL) liquidation of Tamil Nadu-based Surana Power were invalid as majority of secured creditors consented to...
As per our reports, the Finance Minister ordered suspension of new insolvency proceedings for a year. This has made the companies turn to ‘schemes’ under Companies Act, 2013. The Companies Act gives the composition to a system of 'bargain’ between 'an organization and its banks or any class of them' or 'an organization and its...
As per the reports, financial creditors realized 64% of their admitted claims through insolvency process in January-March which is much higher than average of about 46% over the period up to December 2019. The realization was due in large part to the resolution of Jaypee Infratech (JIL), where financial creditors recovered Rs. 23,223 crore, over...
As per the reports, banks are indecisive over the resolution of stress among the corporate borrowers as they find themselves caught between the recommendation of the Central Government to suspend the Insolvency and Bankruptcy Code for a year and the reluctance of the Reserve Bank of India to allow for a one-time loan restricting in...
Facts of the case: The applicant/ operational creditor in this case, Foseco India filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IB Code, 2016) for initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, i.e., Om Boseco Rail Products Limited for alleged default in payment of operational debt...
As per the reports, the Appellate Tribunal has upheld order passed by Honourable NCLT which prohibits appointment of an ex-bank official as Resolution Professional of a bankrupt company due to the possibility of bias. The NCLAT has upheld an order passed by NCLT, Delhi bench over the appointment of a former official of State Bank...
As per the reports, a pre-packaged insolvency or a pre-pack is a pre-planned process in which a financially distressed company and its creditors tries to reach an agreement with a buyer for its sale prior to initiating insolvency proceedings. This is done by an insolvency practitioner or an Insolvency Resolution Professional (IRP) who is appointed...
In this case, the operational creditor filed an application under Section 9 of the IBC, 2016 for initiation of CIRP against the corporate debtor, i.e., Durga Enterprises. The Adjudicating Authority admitted the said application and, a Resolution Professional was appointed. The resolution plan submitted by the resolution applicant was approved by 92.65% of voting by...
As per the reports, non-bank lenders want the government to revise the terms of Rs. 75,000 crore package to help the industry, saying that the sovereign guarantee available for loans and bond sales should be for a longer period of time. The lenders want a long-term window of at least three years to access credit...
As per the reports, the NCLT on 12th May, 2020 by way of an ‘order’ directed that any new insolvency application filed by a financial creditor under Section 7 of the IBC, 2016 must be accompanied by a default record from an Information Utility. Not only did it make such filing mandatory for new applications,...
As per the reports, banks are now hamstrung with regard to resolution and recovery as the government has suspended fresh insolvency cases for 12 months concerned over deteriorating asset quality post COVID-19. While the effect of the lockdown is expected to lead to a pile-up of bad assets, the lack of effective recovery mechanisms outside...
As per the reports, stressed- asset companies, banks and other creditors, and insolvency, as well as resolution professionals, are in a quandary in the absence of any clarity about the fate of applications filed under the IBC before the Covid-19 outbreak in India. Lawyers, resolution professionals and stakeholders said that the announcements made by the...
As per the reports, NCLT has refused to admit the insolvency petition filed by India Resurgence Asset Reconstruction Company, a joint venture between Piramal Enterprises and Bain Capital against Indian Steel Corporation, calling the petition to be ‘defective’. “For all reasons, the preset Company Petition… fails and therefore, we are constrained not to admit the...
As per the reports, experts said that investors who have bid for assets under the IBC are expected to reassess their offers as cash flow projections have gone awry mid the covid-19 pandemic and the ensuing nationwide lockdown. The IBBI has already said that the period of lockdown imposed by the government will not be...
A five- judge bench of the Supreme Court held on 5th May, 2020 in Pandurang Ganpatii Chaugule v. Vishwasrao Patil Murgud Sahakari Bank Ltd. that co-operative banks come under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Act, 2002 (SARFAESI Act, 2002). The bench held that co-operative banks are “banks” for the purposes...
Resolutions under IBC may run into rough weather after the pandemic of COVID- 19 as bankers fear that winning bidders will review their interest in the companies which have been bankrupt and re-negotiate bids or pull out altogether. Bankers now fear that other winning bidders will similarly invoke the force majeure or material adverse effect...
The National Company Law Appellate Tribunal (NCLAT) on April 22, 2020 refused to stay the execution of the resolution plan submitted by NBCC to take over embattled firm Jaypee Infratech and complete 20,000 stuck housing units. It also allowed the IRP to proceed with constituting the interim monitoring committee for execution of the plan. IRP...
The Honourable High Court of Delhi has held that it is clear from the express language of the provision of Section 32A of the IBC, 2016 that a Corporate Debtor would not be liable for any offence which was committed prior to the commencement of CIRP and the corporate debtor would not be prosecuted if...
Facts of the Case: Ultra Tech was one of the Resolution Applicants in the CIRP of Binani Cement Ltd. initiated by the financial creditor, Bank of Baroda, for non-payment of debt under Section 7 of the Insolvency and Bankruptcy Code, 2016 and filed before the Kolkata Bench of National Company Law Tribunal. UltraTech Nathdwara...
About SRS Limited: SRS Limited, a public Listed Company registered under Companies Act, 1956 is a diversified Company with a business portfolio comprising of Gold and Jewelry (retailing, wholesaling and manufacturing), Cinema Exhibition, Retail and F&B. The Company was incorporated on August 29, 2000 with the objective of trading in FMCG Goods and it later entered into...
It was held by the Honourable Supreme Court that: Section 13 of the IBC, 2016 specifically bars the jurisdiction of the Civil Courts. This means that powers vested in a Civil Court under the Arbitration & Conciliation Act, 1996, such as the powers to grant interim relief in terms of Section 9 of the Arbitration &...
1. Form INC-28 is to be filed after the appointment: The IRP/RP/Liquidator would have to first file the NCLT order to approve him as the IRP/RP/Liquidator in form INC-28 on the MCA-21 portal. The following points must be kept in mind while filing the form: Form No. INC-280 Select the drop-down box in field 5(a)(iii) by selecting the...
NCLAT held that: the procedure as followed in “Flat Buyers Association Winter Hills- 77, Gurgaon” shows curtailment of period of resolution without asking for resolution plan from the third party before finalization of the resolution plan. The resolution can be taken even during the corporate insolvency resolution process, if any promoter agrees as an investor...
The Resolution Plan of Gurgaon-based Dhankua Laboratories for the revival of Chennai- based debt-ridden company Orchid Pharma Ltd. has been implemented, which is potentially fetching secured lenders around 32.3 per cent of recovery. The culmination of the long-drawn resolution process for the pharmaceutical company, Dhankua Lab, which saw its first approved resolution plan by the...
As a measure to prevent the spread of the transmission of Novel Coronavirus (COVID- 19), the Central Government has declared a lockdown of twenty-one days w.e.f. 25th March, 2020. Since, it is difficult for the Insolvency Professionals (IPs) to continue carrying out the activities of Corporate Insolvency Resolution Process (CIRP), for the members of the...
The learned counsel for the Appellant takes a forceful stand that the Corporate Debtor as a Corporate Person being a company under the Companies Act, 2013 and had given surety but in relation to a Contract or Guarantor or Corporate suffice it to make a pertinent mention that a corporate debtor had guaranteed surety in...
The Parliament on 12th March 2020 passed a bill to amend the Insolvency & Bankruptcy Code, 2016. The Insolvency and Bankruptcy Code (Amendment) Bill, 2020 was approved by Lok Sabha on 6th March 2020. This bill replaces an ordinance. This is the 4th time that the IBC Code is proposed to be amended. It aims...
The National Company Law Appellate Tribunal (NCLAT) has dismissed the telecom department’s plea, citing delay in appeal against the order of the National Company Law Tribunal. The appeal is time- barred and for want of jurisdiction, the NCLAT dismissed. DoT had raised an issue in its plea that whether licence/ spectrum to run a telecom...
The insolvency condition of Yes bank has provoked the whole country. The central government has been acting as the saviour and RBI as the resolution applicant by introducing the Insolvency Resolution Plan. There is anticipation of moratorium ending soon ie. maybe before the designated time given as SBI acquires 49% stake. If the Resolution process of...
Ministry of Corporate Affairs (‘MCA’) has vide Notification dated January 24, 2020, notified the Companies (Winding-Up) Rules, 2020 in order to provide a systematic procedure of winding up of a Company under Cos Act. The Rules cover both types of Companies that have applied for winding up under section 271 as well as the companies...
Mumbai: NCLT to intervene - The Enforcement Directorate (ED) has sought permission from the dedicated bankruptcy court to intervene in the insolvency resolution pleas against Sterling group companies Sterling International Enterprises and Sterling SEZ & Infrastructure. ED on Wednesday sought more time from the Mumbai bench of the National Company Law Tribunal (NCLT) to file...
Discuss insolvency law - MUMBAI: Member of Parliament and Chairman of Standing Committee on Finance Jayant Sinha met representatives of homebuyers to discuss their objections to amendment to the Insolvency & Bankruptcy Code, 2016. The proposed amendment requires a minimum threshold of homebuyers to come together in order to initiate proceedings under the code against...
Benjamin Disraeli presciently said that debt is a prolific mother of folly, and of crime. When a company runs into debt, it is the creditor who inarguably suffers more than the debtor. Insolvency laws aim to assist both the debtor and the creditor in the management and disposition of the debtor’s assets. Recent months have...
NCLT Extends Videocon - "This is for the extension of the CIRP process as it ends on 4th of February. Public notices are being given for the submission of bids on 31st of Jan and we see a lot of it coming in, so we request the CIRP process be extended further," said the counsel...
NEW DELHI: NTPCNSE 1.85 % has outbid the Adani Group for the Avantha Group’s 600 MW Jhabua power plant in Madhya Pradesh, with a Rs 1,900-crore offer that was two and-a-half times more than the rival bid, people in the know said. State-run NTPC’s offer is also the highest on a per-megawatt basis so far...
NCLAT Dismisses ROC - The National Company Law Appellate Tribunal on Monday dismissed the Registrar of Companies' petition seeking modification of the judgement in the Tata-Mistry case and said its ruling had not cast any aspersions on the RoC. "There is no ground to amend judgement dated December 18, 2019," a two-member NCLAT bench said. On...
Mumbai: Lenders to Karvy Stock Broking Ltd have started exploring other avenues after failing to secure any relief from the Securities and Exchange Board of India (Sebi) on client shares pledged by the brokerage. The options include filing pleas with the Debt Recovery Tribunal (DRT) and Insolvency and Bankruptcy Board of India (IBBI), and selling...
Bharti Infratel Ltd’s decision to extend the long stop date of its proposed merger with Indus Towers Ltd again does not come as a surprise. The stock lost less than 1% on Thursday. What’s more, the management commentary and delay in approvals is leading to the belief that the merger may be called off eventually....
Impact of Insolvency - It has been highlighted that an economy to be competitive needs free entry and free exit of companies. In the past, in the absence of an exit mechanism, several private sector companies were nationalized. The relationship ensured that the promoters would not exit companies irrespective of their performance and conduct. However,...
In a move that will remove the final hurdle for companies taking over stressed firms, the Union Cabinet on Wednesday approved an amendment to the Insolvency and Bankruptcy Code (IBC) that prohibits attaching assets of companies resolved under the mechanism for offences committed by the previous management or promoters. The decision assumes significance as there...
MUMBAI : Having burnt their fingers in the Essar Steel insolvency case, lenders are looking for a speedier and time-bound resolution for Dewan Housing Finance Corp Ltd (DHFL) in the bankruptcy tribunal. Stuck in the tribunal since August 2017, the Essar Steel insolvency case was finally resolved by the Supreme Court last month. DHFL is...
On 28th November 2019, The Insolvency and Bankruptcy Board of India published the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2019. Certain amendments made by these Regulations are resulting in the Insolvency and Bankruptcy Code (Amendment) Act, 2019, which came into force on 5th August 2019. Certain amendments...
The Insolvency and Bankruptcy Code, 2016 foresees Insolvency Proceedings, restructuring, and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner. The main purpose of Insolvency and Bankruptcy Code is to maximize the value of assets of such persons, to promote entrepreneurship, to increase the availability of credit and stabilizing the interests...
Aircel's Spectrum License - The National Company Law Tribunal (NCLT) has ruled that Aircel has the "right to use" its spectrum and directed the Department of Telecommunications (DoT) not to suspend the bankrupt telco’s licenses. The verdict offers huge relief to Aircel, which, under an insolvency process, is on the verge of selling its assets,...
MUMBAI: There seems no slowdown in the business of law as the country’s legal sector has increased its fee income by more than 62% in two years at $2.1 billion, or about Rs 15,000 crore, a recent report shows. A slew of cases involving litigation on account of new laws such as Insolvency and Bankruptcy...
Taking forward their plan to formulate a resolution plan for McLeod Russel outside the scope of NCLT, the company's lenders, led by ICICI Bank, which has the largest exposure, have appointed LSI Financial Services to undertake a techno-economic feasibility study based on which the creditors will decide the way forward. The study primarily focusses on...
Troubled wind turbine maker Suzlon Energy may head to National Company Law Tribunal (NCLT) as lenders see no possibility of resolution, two people familiar with the matter told FE. “There were two investors who showed interest in Suzlon, but both of them have backtracked. We have no option but to refer this account to NCLT”,...
Ever since homebuyers were given the status of financial creditors under the Insolvency and Bankruptcy Code (IBC), a lot of them have moved the National Company Law Tribunal (NCLT) against the developers of stalled and delayed projects. “Since June 2018 (after getting the financial creditor status), a total 1,821 cases have been filed by homebuyers...
Builders continue to ask for a hefty cash pay-out in property and land purchases forcing customers to either drop plans or raise cash from other sources. And all this is happening when large property markets with established realty developers are moving towards cheque payment in a big way. Smaller cities like Ahmedabad, Chandigarh, Jaipur, Noida,...
The National Company Law Appellate Tribunal(NCLAT) has allowed Reliance Industries to delist textile manufacturer Alok Industries, which it has acquired through insolvency process. A two-member NCLAT bench headed by Chairperson Justice S J Mukhopadhaya has modified the order passed by the National Company Law Tribunal (NCLT), Ahemdabad, which denied such permission. While approving Rs 5,052-crore...
Homebuyers have opposed a move by real estate developers to get the Insolvency and Bankruptcy Code (IBC) amended, saying the move is not only “illogical and illegal but also regressive” and would send a wrong message and derail the government’s efforts to reform the sector. “Having failed legally, these builders are now mounting pressure on your...
More than two years ago, the Reserve Bank of India ordered local banks to take Essar Steel and 11 other borrowers to ‘trials’ under a revamped bankruptcy law enacted in late 2016. The jury is finally out on India’s most significant piece of bad loan legislation: It has, unequivocally, recognised the primacy of secured creditors...
NBFCs with Assets - The Reserve Bank can now seek resolution of non-banking financial companies having assets worth of at least ?500 crore under the insolvency law, a move that is likely to help in addressing woes in the NBFC sector. After discussions with the central bank, the corporate affairs ministry on Monday issued a...
Consider Haldiram Snacks - The National Company Law Tribunal (NCLT) has directed the lenders of Kwality Ltd to reconsider the revised ?145-crore offer by Haldiram Snacks to acquire the debt-ridden dairy firm. The Delhi-based bench of the tribunal has also extended the Corporate Insolvency Resolution period by another three weeks and directed the Committee of...
New Delhi: NCLAT Rejects PepsiCo - NCLAT has rejected the plea of beverages giant Pepsico India Holdings seeking release its machinery from Oceanic Tropical Fruits, which is under the insolvency process. The beverages major had moved the NCLAT against the order passed on May 28, 2019, by the Chennai bench of National Company Law Tribunal...
Ruling on the long fought Essar Steel insolvency case, the Supreme Court on November 15 set aside NCLAT judgement and said that the ultimate discretion on distribution of funds was with the Committee of creditors. The Committee of Creditors (COC) consists of banks. The NCLAT had earlier said that the funds from the winning bid should be...
NEW DELHI: The government is considering a formula for distributing the proceeds of insolvency resolution among financial and operational creditors in a fixed proportion, said people with knowledge of the matter. The goal is to protect the interests of operational creditors and reduce delays due to litigation, ensuring that the objective of the Insolvency and...
The government is mulling a special window for resolution of stressed non-banking finance companies (NBFCs) under the Insolvency and Bankruptcy Code (IBC), a senior government official said. A special window is certainly something which is being examined closely, the official added. The move comes against the backdrop of financial sector players like Dewan Housing Finance...
The first national meet of officials of the Real Estate Regulatory Authority (RERA) is likely to brainstorm among others issues the scenario emerging out of the August 9 order of the Supreme Court, where it upheld the validity of the IBC, which conferred the ‘financial creditor’ status on homebuyers. Besides RERA officials from the states,...
The National Company Law Appellate Tribunal (NCLAT) has set aside an order of admission under the Insolvency and Bankruptcy Code, 2016 on the ground that the order was passed by a member singly after the retirement of the fellow member of the Division Bench. The order was passed by a three-member bench of NCLAT comprising...
The IBBI data also shows about 56.17 per cent of the CIRPs, which were closed, ended in liquidation, and only 14.93 per cent ended with a resolution plan. In over three years of the Insolvency and Bankruptcy Code, the number of bankrupt companies liquidated under the regime has far exceeded the number of corporate resolutions,...
There is perhaps a ray of hope for the distressed bank account holders of PMC Bank. In a move aimed at giving a huge relief to the PMC Bank account holders, the administrator appointed by the Reserve Bank has reportedly asked the Mumbai Police to release the seized assets in connection with the bank scam...
Gurugram-based Alok Kumar Agarwal has been appointed the interim resolution professional by the NCLT to oversee the travel company's affairs. The National Company Law Tribunal (NCLT) has admitted a plea to initiate insolvency proceedings as well as appointed a resolution professional for Cox & Kings for defaulting on a loan. The NCLT admitted the plea...
The resolution plan so reached can then be placed before the NCLT for approval, so that it can be implemented. The pre-packaged resolution scheme is expected to aid the existing insolvency framework and cut costs and time of the resolution process. The practice of opting for pre-packs is a standard approach in the UK, on...
Sitharaman’s comments came amidst the alleged Rs 4,355 crore fraud at Punjab and Maharashtra Co-operative (PMC) Bank. Finance Minister Nirmala Sitharaman has said that uncertainty arising out of one case should not be generalised about the efficiency and effectiveness of Insolvency and Bankruptcy Code. Sitharaman was responding to a question on a particular recent case...
State Bank chairman Rajnish Kumar on Tuesday said the Enforcement Directorate and other central law enforcement agencies should restrict to attaching personal assets while investigating a promoter and keep off the company which is under the insolvency process. Speaking a day after NCLAT asked the ED to release the attached properties of Bhushan Power &...
Introduction of Insolvency and Bankruptcy Code has drastically restructured the current situation of debtor and creditor equation. Post implementing the code creditors are not needed to pursuit the debtor, the situation has reversed now. The insolvency resolution process for individuals includes filing of an application for insolvency by paying requisite fees and following the valuation...
While dealing with an appeal filed by the Registrar of Companies against a batch of LLPs, the National Company Law Appellate Tribunal (NCLAT) has remarked that the adoption of a bloodthirsty approach by Authorities against compliant entities is unwarranted. The remark was made by a two-member Bench of Member (Judicial) Bansi Lal and Member (Technical)...
The government-appointed Insolvency Law Committee (ILC) will meet on October 15 to deliberate on various proposed reforms to the existing insolvency and bankruptcy code (IBC), including new concepts such as group insolvency, said a member of the panel. “ILC will be meeting on October 15 to discuss the various reforms,” MS Sahoo, Chairperson, Insolvency and...
The NCLAT has held that the pendency of a suit filed by the corporate debtor against a financial creditor, cannot bar it from initiating insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The Appellate Tribunal headed by Justice S J Mukhopadhyay also reiterated that pre-existing dispute cannot be a subject...
Delhi High Court has held that a winding up order passed by a Company Judge is not irrevocable and the proceedings can be later transferred to NCLT under IBC if the same is in the interest of the company and the creditors. The Division Bench of Justice Vipin Sanghi and Sanjeev Narula also held that...
The National Company Law Appellate Tribunal ("NCLAT") reversed the order of NCLT while adjudicating upon the matter concerning insolvency of Sterling Biotech. The NCLAT allowed the creditors to withdraw the insolvency petition as per section 12A of the Insolvency and Bankruptcy Code ("IBC"), 2016 and to settle with the promoters of the Corporate Debtor. Thereby,...
Lucknow The National Company Law Tribunal (NCLT) has imposed a moratorium on Rohtas projects in Lucknow and appointed an interim resolution professional (IRP) on the complaint of home-buyers who had moved an application against the defaulting realtor under the Indian Bankruptcy Code (IBC). The tribunal has appointed Kamal Piyush as interim resolution professional (IRP) to...
The National Company Law Tribunal, New Delhi has held that a ‘Sole Proprietary Concern’ is not a person within the meaning of Section 3(23) of Insolvency and Bankruptcy Code, 2016 (IBC). It was hence not entitled to initiate insolvency proceedings before the Adjudicating Authority under IBC, it held. The Order was passed by a two-member...
Tata Steel has walked away with a profit of ?5,000 crore made by Bhushan Steel during the insolvency period stretching over 18 months. This contrasts with the National Company Law Tribunal (NCLT) ruling that the profit made by Bhushan Power and Steel during the insolvency period belongs to the financial and operational creditors. JSW Steel...
NEW DELHI: The National Company Law Tribunal (NCLT) Mumbai on Tuesday initiated corporate insolvency resolution process against Kasata Hometech under Section 7 of the Insolvency and Bankruptcy Code 2016. The court has appointed Jugraj Bedi as the interim resolution professional (IRP) for the case. The court directed the IRP to make public announcement. The financial...
According to him, innovative ways need to be looked at to ensure that homebuyers do not abuse the insolvency resolution framework. The government is looking into setting a minimum threshold of allottees for homebuyers to be able to initiate insolvency proceedings against real estate developers according to a senior government official. Under the Insolvency and...
Turns out, a number of multiplexes and food chains may have been fudging up the amounts of various snacks and food items they dole out against payment taken. And now, the legal metrology dept has sent out notices to the likes of Domino’s Pizza, McDonald’s, Cinepolis, E-Square, and more Ever wondered if the size of...
In a landmark judgement delivered earlier this month, the National Company Law Appellate Tribunal has allowed Group Insolvency of six real estate companies in order to arrive at a consolidated Resolution Plan for the total development of a township project undertaken by them in Haryana. The Companies referred to group insolvency are Sachet Infrastructure Pvt....
The company had earlier sold its tea estates in Assam and the Dooars to reduce huge debt. Currently, its short and long-term debts stand at around Rs 1,700 crore. Providing some relief to debt-laden McLeod Russel, the Kolkata Bench of the National Company Law Tribunal (NCLT) has modified its interim order of “status quo” on...
The Insolvency and Bankruptcy Code, of 2016 seeks to combine the prevailing framework by forming bankruptcy law. The main motive behind the execution Insolvency and Bankruptcy Code is to maximize the value of the assets and to find solutions for worried assets risen out of non-performing assets. Key features of Insolvency and Bankruptcy Code 2016: Resolution of...
NEW DELHI: The government has notified the Insolvency and Bankruptcy Code (Amendment) Act, 2019, under which a deadline of 330 days has been set for completion of corporate insolvency resolution process (CIRP), including litigation and other judicial processes. The new law aims to provide greater clarity on the permissibility of corporate restructuring schemes, rights and...
Amtek Auto was among the first list of the 12 companies that were referred by the Reserve Bank of India (RBI) in 2017 to respective banks for the initiation of insolvency process for defaults The National Company Law Appellate Tribunal (NCLAT) on Friday ordered liquidation of debt-ridden Amtek Auto as it declined lenders' request for...
Parliament on Thursday passed the Insolvency and Bankruptcy Code (Amendment) Bill 2019, which brought in eight amendments as part of efforts to ensure that the code remains vibrant and not lend itself to any interpretative ambiguities. The Bill — which was earlier this week passed by the Rajya Sabha — was on Thursday passed by the...
Insolvency and Bankruptcy Board of India came into practice on 1st of October 2016 to control and secure diverse bad loan cases revealed by different creditors, which particularly engaged banks in India. The IBBI comes under Insolvency and Bankruptcy Code, 2016 and controls the profession of indebtedness and bankruptcy. It undertakes the job of governing...
Unable to close many insolvency cases successfully in 270 days has resulted in passing many Litmus tests by IBC. This has created a symbol of the dark storm and greater strikes over the Insolvency and Bankruptcy Code (IBC). Several causes are involved behind the missing of timelines according to the drafted IBC legislation report. Gaps...
The regulator put forward some significant changes in the regulations of Insolvency Professionals. This proposal may require to acquire a Certificate of Practice for all Resolution Professionals, Liquidation, or Interim Resolution Professional that authorize the IPs practice. The Insolvency and Bankruptcy Board of India (IBBI) is of the idea that Certification of Practice will enhance...
The orders of Liquidation of debt-ridden pharmaceutical company Sterling Biotech by National Company Law Tribunal has created hindrance for its Lenders. The Lenders were expecting that they could easily withdraw the proceedings of insolvency and accept (OTS) One-time Settlement offered by the promoters. The (CoC) Committee of Creditors had permitted to the promoters One-Time Settlement...
With the increase in bankruptcy and bad loans in India, companies are overburdened with fraud loans and the risk of insolvency. Industries also spend most of their time and effort in fixing macroeconomic risks. To resolve and restructure failing businesses, the Government introduced the Insolvency and Bankruptcy Code, 2016. The introduction of the law has...
According to IBBI chief M S Saboo, a recent judgment by the Supreme Court will encourage creditors to be more active and responsible for their actions as well as inactions. He further said that the judgment does not affect the rights of creditors in any way. The apex court, on April 2, rejected a circular...
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