A joint reading of the provisions of regulations 18, 19 and 21 of the CIRP Regulations that members of the CoC having 33% of the voting rights may request the RP to convene a meeting of the CoC. Such request shall include a note proposing the matters to be discussed or issues to be voted upon, along with relevant documents, if any. On receipt of the request, the RP shall convene a meeting of the CoC for consideration of the note.
n a nutshell, the recent NCLT order has driven home the point that the Provident Fund dues payable by the Corporate Debtor – not being the assets owned by him but belong to the workers – are not included within the liquidation estate. The liquidation estate is realised, with the proceedings being distributed to the stakeholders under the waterfall mechanism in section 53 of the I & B Code. What does not form part of the liquidation estate cannot be appropriated or sold by the Liquidator and cannot be distributed to the stakeholders of the Corporate Debtor – which, if allowed, would amount to ‘unjust enrichment,’ not contemplated by law.
In the case of ‘Lalit Mishra Vs Sharon Bio Medicine’, it was held that the Personal Guarantor’s Right to subrogation is not an absolute right. Further, it was elaborated that the debt recovery of the Personal Guarantor would in fact be antithetical to the objective of maximization of assets by further encumbering the assets of the company. Moreover, it cannot to be denied that the Guarantors also had some involvement in the management of the company, which eventually led to such insolvency. In the recent judgment with respect to challenge of provisions related to Personal Guarantors in the ‘Anil Ambani case’ in 2019, it was held that the provisions in the code, specifically Section 14 and Section 31(1), have been structured in a way so as to indicate that the guarantor’s rights to subrogation cannot be taken away if in case he/she settles the debts of the Corporate Debtor before or during the CIRP, but before the passing of the Resolution plan. Post passing of the Resolution Plan, as per Section 31(1) of the Code, it shall be binding on all stakeholders including the guarantors.
The Code is evolving with time and every now and then interesting set of jargons come before the Ld. Adjudicating Authority(ies), which require harmonious interpretation to uphold the objective of the code. One such interesting question of law is when a liquidator files an application under section 9 of IBC, 2016 without taking prior approval from the Hon’ble Adjudicating Authority as required under section 33 (5) of IBC, 2016. This article seeks to examine the intention of the legislature in enacting sub-section (5) of Section 33 and the consequence of inadvertent non-compliance.
In exercise of the powers conferred by sub-section (1) and clause (fd) of sub-section (2) of section 239 read with sub-section (2) of section 54C of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), as amended by the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021 (3 of 2021), the Central Government hereby makes the Insolvency and Bankruptcy (pre-packaged insolvency resolution process) Rules, 2021.
The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021 promulgated on 4th April, 2021 provides for pre-packaged insolvency resolution process (PPIRP) for corporate debtors classified as micro, small and medium enterprises. The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Pre-packaged Insolvency Resolution Process) Regulations, 2021 (PPIRP Regulations) today to enable operationalisation of PPIRP.
The Insolvency and Bankruptcy Board of India (IBBI) is conducting one-day Basic Workshop on Insolvency and Bankruptcy Code, 2016, on 20th April, 2021 (Tuesday), in Virtual Mode, for the Insolvency Professionals, who are registered with IBBI and who have not attended the same in the past. Since the number of seats available for the Workshop are limited, the intake of the participants shall be on first come first serve basis. Eligible, registered IPs who are interested in attending the Workshop may submit their request online here.....
The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Pre-packaged Insolvency Resolution Process) Regulations, 2021 (PPIRP Regulations) today to enable operationalisation of pre-packaged insolvency resolution process (PPIRP).