Requirements and Overlaps of Valuation under various Laws - By Mansi Dinesh PostureLLB and currently pursuing Graduate Insolvency Programme(GIP), Indian Institute of Corporate Affairs Introduction “A value has a value, only if its value is valued” Valuation is the analytical…
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IDIA UP Chapter's 4th National Essay Writing Competition OVERVIEW The National Essay Writing Competition is IDIA UP Chapter's flagship annual initiative. Through the event, we aim to promote the art of legal research and writing while also contributing to a…
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High Court in this case has granted Interim relief for Pending the hearing and final disposal of the present Writ Petition, stay the operation and effect of the Order passed on February 28, 2022 passed by the IBBI for suspending the registration of Mr. Vishwanath Shridhara Prabhu as a registered valuer till he is acquitted of the charges.
There is total 16 judgments (reported in IBC Laws till 18.01.2023) were passed by various forms such NCLAT/NCLT referring Vidarbha Industries Power Ltd. Vs. Axis Bank Ltd. (2022) ibclaw.in 91 SC. Similarly, total 8 judgments (reported in IBC Laws till 18.01.2023) were passed by various forms such NCLAT/NCLT referring State Tax Officer Vs. Rainbow Papers Ltd. (2022) ibclaw.in 107 SC. On January 18, 2022, MCA has invited public comments on various amendments in IBC. In these proposed amendments, it has also proposed that: a. Section 7 of IBC may be amended to clarify that while considering an application for initiation of the CIRP by the financial creditors, the AA is only required to be satisfied about the occurrence of a default and fulfilment of procedural requirements for this specific purpose (and nothing more). Where a default is established, it is mandatory for the AA to admit the application and initiate the CIRP. b. All debts owed to Central Government and the State Government, irrespective of whether they are secured creditors pursuant to a security interest created by a mere operation of statute, shall be treated equally with other unsecured creditors. These all judgments which referred Vidarbha Industries Power and Rainbow Papers judgment can be access using sub-subject in IBC Laws’s Case Law Portal.
Read here summary of Recommendations of the Committee:
Recently, the Madras High Court ruled that the banks claiming as secured creditors under the SARFAESI Act cannot seek a ‘first charge’ over the lien on the money deposit because the lien is not covered under the SARFAESI Act as a security interest. Two arguments support the ruling of the Madras High Court. First, the term “lien” is notably omitted from Section 2(z)(f) of the SARFAESI Act. Second, Section 31 of the SARFAESI Act specifies that the Act’s provisions do not apply to the lien.
NCLAT quashes an order of NCLT, Kolkata. Synopsis of the judgement is as follows:
On November 11, 2022, The Securities and Exchange Board of India (SEBI) released a consultation paper[1] on the modalities of the Insolvency and Bankruptcy law, when the process was applied to publicly listed companies . It was an attempt to streamline the interests of a private equity investor or shareholder with that of a financial creditor, associated with an entity undergoing the Corporate Insolvency Resolution Process (CIRP). The notification was in response to the grievances expressed by the shareholders of delisted entities post liquidation vis-a-vis the asset distribution process.
The distinction between financial and operational creditors is crucial under the Code. When both Operational and Financial Creditors are unsecured, it is clearly a matter of discrimination as opposed to differentiation. The ultimate purpose of every creditor, whether financial or operational, is to maximise recovery. The IBC contains no incentive mechanism to encourage such a transition and ensure that financial creditors do not act only in their own self-interest.
The problem with this interpretation of Section 96 is two fold; firstly, the presumption that a liability under Section 66-67 of IBC is a future debt, and secondly, a practical impossibility arising out of the judgment. Addressing the first, it is pointed out that under Section 66, a resolution professional reports such transactions which in his opinion are fraudulent in nature and seeks a direction that the management of the corporate debtor be directed to make contribution to the assets of the corporate debtor to the extent of the impact of such fraudulent transactions.
