The Theory of Clean Slate under the IBC, 2016 in light of the Ghyansham Mishra Case – By Debdatta Mukhopadhyay

With the coming into force of the Insolvency and Bankruptcy Code, 2016, the existing Insolvency Regime in India faced a major overhaul. The already existing Statutes for instance the SARFAESI Act, 2002, RDDBFI Act, 1993 etc. had several loopholes and were severely criticized for reasons including it to being debtor centric, time consuming and being rigid statutes. On the completion of over five years of the IBC, 2016, the Statute can still be said to be at a nascent stage with new Judicial Interpretations coming in. One such very engrossing question of law included whether the unsatisfied claims of the Creditors after the final acceptance of the Resolution Plan by the Committee of Creditors would still be an eligible ground to initiate legal proceedings against the new form of Corporate Debtor? The accompanying short Article aims to analyse this position of Law in light of the Judicial Rulings on the same. 

NCLT Chennai decision threatens enforcement matrix of investors using debt instruments – By Adv. Adhitya Srinivasan

This decision is significant because it treats financial creditors and investors as mutually exclusive categories, which effectively means that an investor (who structures its investment using debt instruments) cannot also be a financial creditor and cannot therefore avail itself of the enforcement mechanism and remedies available to a financial creditor under the IBC. Moreover, it would also mean that such an investor would feature at a lower rung of the waterfall if the company went into liquidation. Neither of these is a desirable outcome and if this proposition is upheld by higher authorities, it may cause investors to rethink the terms on which they participate in investments.

Analysis of Power of Committee of Creditors – Shivani Kumari

Under insolvency and bankruptcy code 2016, the Creditors of the company play a very important role in the regime of insolvency. The Committee of creditors has been vested with great powers and responsibilities, which further leads to the resolution of a company under distress. The creditors shall take absolute control of the management of the corporate debtor, with the authority to take important decisions and negotiate the resolution plans, also the committee of creditors eases the financial risk in a company. Nonetheless, the Committee of Creditors is further entrusted with commercial wisdom, which empowers them to take the most crucial decisions regarding the fate of the company. The Committee of creditors is considered to be the headliner to the resolution process. By handing such powers to the creditors of the company, the impact of creditor-in-control model management promises the likelihood of a stronger bankruptcy regime.

Landmark Judgements of IBC of The Year 2021 – By Ms. Shalmoli Ghosh

The author has identified top five judgments of the year 2021 delivered by the Supreme Court of India each from the month of January to May, concerning the Insolvency and Bankruptcy Code, 2016. These rulings of the Apex Court will have far reaching consequences and undeniably serve as precedents in the world of insolvency.

A Study on Section 238 of IBC, 2016 – By Ms. Parul Sardana

There is a huge debate going on whether Insolvency and Bankruptcy Code shall override the provisions of any other legislations or not? This article is an attempt to solve this debate by mentioning recent Supreme court judgments. The article apart from dealing with Section 238 and judgment will also look at what amendment should be come to avoid the conflicting situations. The article is divided into different parts. Part I deals with Introduction, Part II examines the provisions of Section 238 of IBC, and further it gives a detailed view of report submitted by Committee, Part III submits the landmark judgment and Part IV deals in Harmonious Construction. And at last Part V presents the Conclusion of the Article.

Rotten Apples in the Barrel: Not Readily Realisable Assets – By Ms. Prachi Bhatia

NRRAs, the rotten apples can make it difficult for liquidators to achieve the task of completing the liquidation in the time-bound manner and spoil the pool of assets. It is prudent to give these rotten apples to someone who has the resources to churn out the juice from them. In other jurisdictions, the right to transfer cause of action is covered under the definition of "property", interestingly the definition of "property" in IBC includes actionable claims. However, the ambit of actionable claim is limited to unsecured debts and beneficial interest in movable property not in possession.

Should India adopt the UNCITRAL Model Law in Order to Solve Cross Border Insolvency Disputes in the Aviation Sector – By Mr. Dhruv Sharma

The case of Jet Airways is just one example of how a company debtor needs a cross-border regime which addresses situations where creditors and assets of a corporate debtor are dispersed in different competences. The increasing size of economies has enabled companies to expand their businesses across national boundaries and organize their businesses. Because business activities are increasingly globalised, companies face a wide range of legal systems. Therefore, it is no surprise that such insolvencies have cross-border implications when multinationals become insolvent. Therefore, in order to avoid such a situation, the law framework pursuant to cross border insolvency issue has now become the need of the hour. 

Supreme Court’s judgment in Innoventive Industries: Opening a can of worms? – By Mr. Rakshit Assudani

Through this judgment, the SC has allowed an application to be admitted against the corporate debtor even if the debt is disputed (it may not exist if merits are considered). This leads to negative consequences as the initiation of insolvency proceedings tarnishes the image and reputation of the corporate debtor. Moreover, in light of the inclusion of homebuyers as financial creditors and the move towards consumer bankruptcy, the fact that this judgment has been frequently cited to ascertain default becomes slightly problematic. The reason being that such a new class of financial creditors would essentially lead to an increase in applications being filed on the basis of non-payment of financial debts that are disputed. In addition, such a class of financial creditors would not have records with the information utilities and would have to rely on other evidence to establish default.