Section 14 SARFAESI Act, 2002 is a potent weapon in the armoury of Banks and Financial Institutions. This provision is being invoked by the Secured lenders quite frequently and the Debt Recovery Tribunals are flooded with the Petitions filed under Section 17 of SARFAESI Act, 2002 which provides a remedy to the aggrieved person to challenge the validity of the measures taken by the Secured Creditors under Section 14 of the SARFAESI Act, 2002.
Discussion Paper on measures for increasing the possibility of resolution, value of resolution plan and enabling timely resolution – IBBI dated 07.06.2023
This paper analyses resolution processes that have been completed and are ongoing, presents the understanding of issues that are adversely affecting the efficiency and effectiveness of the resolution process. The issues are of a wide spectrum and proposals have been made to resolve the same. - 1. Timeline for providing information for assignment of debt. 2. Seeking information from personnel of the corporate debtor. 3. Modification of Timelines for Submission and Consolidation of Claims. 4. Increase of duties of AR, Increase of fee of Authorised Representative, Replacement of authorised representative 5. Inclusion of Relevant Minutes in Form H. 6. Addressing the Aspect of Limitation in Applications for initiation of insolvency resolution proceedings. 7. Favourable voting on more than one resolution plan. 8. Changes in timelines. 9. Audit Requirement for Insolvency Resolution Process Cost (IRPC) in certain CIRPs
In order to club other charges such as interest, legal charges, balance cost of amortization and/or notice period rent with principal amount to meet threshold limit u/s 4 of IBC express stipulation has to be incorporated specifically in the agreement, the purchase order or the invoice and in the absence of the same, neither interest nor any other charges can be clubbed with the principal amount – North West Carrying Company, LLP Vs. Metro Cash and Carry India Pvt. Ltd. – NCLT Bengaluru Bench
To establish that the Arbitrator has become de jure unable to perform his functions, in accordance with Section 14(1)(a) of the Arbitration and Conciliation Act, 1996, the petitioner has to satisfy that his case fell within the ambit of the conditions/circumstances as laid down under Schedule VII of the Act – Maj Pankaj Rai Vs. NIIT Ltd. – Delhi High Court
There should be a direct disbursal of the amount owed, Financial Creditor to the Corporate Debtor for the amount to be construed as a ‘Financial Debt’, the transaction should be a direct transaction between the Financial Creditor and the Corporate Debtor – M/s. Actioncor Consultants Pvt. Ltd. Vs. M/s. Viprah Technologies Ltd. – NCLAT Chennai
The NCLT, the NCLAT and their Contempt Proceedings – By Naman
The question of whether the NCLT and NCLAT have the power to initiate contempt proceedings is a complex one. While there are arguments in favour of conferring this power on the NCLAT, there is no clear precedent on this issue. Several benches of NCLT, on the other hand, have held that they do not have the powers to initiate contempt proceedings.