It is in this context that the Hon’ble NCLT Mumbai in Bharat Doshi (2022) ibclaw.in 529 NCLT ruled that debt arising out of rent or lease cannot be considered as Operational Debt under the Code and hence the lessor would not be granted the rights of an operational creditor. There is a conflict in the position of law regarding the treatment of lessors as operational creditors and there is argument to be made from both sides. Hence, a judgment by the Supreme Court in Promila Taneja (2021) ibclaw.in 02 SC would help clarify the position of law on this issue. Till that time, M. Ravindranath [2020] ibclaw.in 95 NCLAT continues to remain the binding precedent on all tribunals.
Author: IBC Laws
Audi Alteram Partem: A Right not accorded to Personal Guarantors – By Swena Prashant & Soham Das
The IBC was enacted to provide a streamlined and faster process for dealing with the insolvency of individuals and corporate entities. However, it should ensure that personal guarantors don’t miss out on their fundamental rights in the garb of speedy redressal. It is high time that the courts recognize the significance of the role that is played by personal guarantors and vest them with fairness, in line with principles of natural justice. By granting interim relief, the Supreme Court has made its intention clear that the subject of rights of personal guarantors requires further scrutiny. It is left to be seen what the court adjudges, but optimizing the resolution process to accommodate all parties on the same pedestal, is of utmost need.
Supreme Court Rules on Commercial Wisdom of Creditors to Allow Withdrawal of Insolvency Proceedings – Adimesh Lochan, Arjun Gupta, Sahil Kanuga, Nishith Desai Associates
SUPREME COURT RULES ON COMMERCIAL WISDOM OF CREDITORS TO ALLOW WITHDRAWAL OF INSOLVENCY PROCEEDINGS Authored by: Adimesh Lochan, Arjun Gupta, Sahil Kanuga, Nishith Desai AssociatesThe authors would like to thank Aryan Sharma (Student, Institute of Law, Nirma University) for his…
Analysis of Section 12A under IBC – By Adv. Ananth Kini
Analysis of Section 12A under IBC By- Ananth Kini, Advocate, Supreme Court & Delhi High Court ABSTRACT The Insolvency and Bankruptcy Code, 2016 seeks to consolidate and amend the law relating to insolvency into a single legislation and among other things also…
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Need for Restructuring the Admission of Application Procedure under the Corporate Insolvency Resolution Process(CIRP) – Mahimna Dave
Need for Restructuring the Admission of Application Procedure under the Corporate Insolvency Resolution Process (CIRP) Authored by: Mahimna Dave, IV-Year Law student from Institute of Law, Nirma University I. INTRODUCTION The soul and spirit of the Insolvency & Bankruptcy Code,…
Resolution Professional : Balancing the Interests of Stakeholders under IBC – By Vrinda Agrawal
Resolution Professional : Balancing the Interests of Stakeholders under IBC Role of Resolution Professional in Balancing the Interests of Stakeholders under the Insolvency and Bankruptcy Code, 2016 Authored by: Vrinda Agrawal,5th year Student of Vivekananda Institute of Professional Studies, Delhi…
Impact of recent amendments in CIRP and Information Utilities Regulations on filing of CIRP application under Section 7 or 9 of IBC and conducting CIRP – By Adv. Nipun Singhvi and Editorial Team
This Research Paper decodes the amendments with respect to the existing provisions in the Code and Regulations, impact on initiation/filing of new CIRP application after these amendments came into force, impact of amendments in Information Utility Regulations on filing of CIRP application and covers other relevant issues: Furnishing of Copy of Form GSTR-1, Form GSTR-3B and Copy of e-Way Bill is mandatory for filing CIRP under Section 9 of IBC; Submissions GSTRs and e-Way Bill with filing of claim; Cases where the generation of e-Way Bill is not a requirement; Submission of PAN and email address of Financial/Operational Creditor alongwith CIRP application; Fixing the responsibility of Promoters/Management to submit information within time and as per format sought by IRP/RP; Creditors’ Assistance: Assist in preparing the information memorandum, getting valuation determined and in conducting the CIRP and Assist in dealing with avoidance applications after closure of a CIRP; Difference in valuations during a CIRP and a threshold for appointment of a third valuer; Dealing with avoidance applications after closure of a CIRP; Amendments in Information Utilities Regulations regarding filing of CIRP; Brief about the process of Information of Default and Record of Default in an Information Utility
Validity of NIL Payment Clause to Operational Creditors Under a Resolution Plan – Ayush Raj
The observation there as well rests upon the commercial wisdom of the CoC and the mechanism vested in the code and regulations made thereunder. The apex court stressed on the contention that financial and operational creditors cannot be treated on an equal footing owing to the fact that both represent different classes of creditors. The apex court in Essar Steel’s judgment has devised a point of difference between the financial creditors and operational creditors by stating that “financial creditors” are in the business of lending and it is by way of the interest that they make money. Further, they finance the capital requirements of businesses to enable them to set up and sustain their establishments. The Operational creditors on the other hand are beneficiaries of such lending inasmuch as they receive payments for providing the services to the corporate debtor which forms the working capital of the latter. Therefore, upon drawing such reasoning in cases of conflict, the payment to lenders would always be prioritized.
Winding Up under the Companies Act and CIRP under IBC: Concerns and Directions for Reform – By Anoushka Goel and Sidharth Sajeev
The research involved in the present paper is Doctrinal in nature, consisting of : (i) An analysis of winding up provisions under the Act and CIRP under the Code to understand overlapping provisions, lacunae and the grey areas that surface. (ii) Review and research on existing literature regarding the concerns and reforms pertaining to insolvency laws in India through the reports issued by the IBBI, ILC etc. (iii) Suggesting reforms in the insolvency laws of India through comparative analysis with insolvency laws in the UK.