Acknowledgement of Debts within prescribed Period Extends the Limitation Period under the IBC

The Supreme Court's ruling in the case of B.K. Educational Services Private Limited v. Parag Gupta and Associates holds good, i.e., the limitation period for the application under the IBC shall start from the date of default. This means that, if an application under the IBC is filed after three years from the date of default, the same shall not be accepted provided if there is a condonation of delay or continuous cause of action. Thus, acknowledgement of debt comes under the category of continuous cause of action and will give rise to the new limitation period if done within the prescribed period from the last acknowledgement of liability.

Insolvency and Resolution Process of DHFL under the Light of Financial Service Providers Regulations

From the above description of the laws of Insolvency and bankruptcy for Financial service providers it can be inferred that, NBFCs form an important part of the economy. DHFL a systematically important deposit accepting company came under the liquidity crunch and as a reminder to RBI and government about scrutinizing the laws and such NBFCs. On 7th June, 2019 amidst the NBFCs fallout, one by one, it was evidentiary to analyse the situation of such NBFCs and its asset liquidity ratio way before it gets out of control, hence RBI issued directions ‘Prudential framework for resolution of stressed assets’ which cover NBFC-D[37] as well. The directions prescribe an effective framework to curb liquidity issues in the long run as they are the watch-keeper of accounts of NBFCs.

Critical Analysis of Section 29A of the Code

Section 29A laid down a multiple layered and comprehensive standard of disqualification that will exclude bona fide resolution applicants. The application of the section might also disbar crucial stakeholders to bid for the revival of the company. Therefore, certain amount of leniency by the courts in deciding the issue of disqualification is the need of the hour to maximize the objectives of the Code. As an alternate to the current restriction, a middle ground could be adopted, which permits promoters to bid for the corporate debtor, while ensuring there are sufficient safeguards in place to ensure that the lenders make the most of the resolution process.

Recent amendments made to the Insolvency and Bankruptcy Code 2016

Recent amendments made to the Insolvency and Bankruptcy Code 2016 To significantly boost the framework of insolvency resolution, the Union cabinet on 17th July has cleared major changes to the bankruptcy law and amended its provisions. There are 8 major…

WhatsApp Bulletin-XVIII