Scope of Valuation under Companies Act, 2013 The Ministry Corporate Affairs (MCA) has, since October 2017, notified Section 247 of the Companies Act, 2013 and introduced the Companies (Registered Valuers and Valuation) Rules, 2017. The MCA has designated the Insolvency…
Analysis of CIRPs, Liquidation Process, Voluntary Liquidation, Registered Insolvency Professionals & Registered Valuers with IBBI etc.. in Chart & Diagrams...
Considering the overall architecture of the Insolvency and Bankruptcy Code, 2016 and the Court evolved jurisprudence, it is clear that the Adjudicating Authority is not empowered to modify the resolution plan approved by the Committee of Creditors. The Adjudicating Authority in cases thinks that the approved resolution plan requires certain modifications then 1) if the approved resolution plan meets the requirement of Section 30(2), may make suggestions regarding the modification of plan, which CoC would not be bound to accept and the Adjudicating Authority shall require to accept the plan without modifications; or 2) if the approved resolution plan does not fulfill the requirement of Section 30(2) than to protect the corporate debtor from liquidation may make suggestions to CoC to modify the plan accordingly or can reject it. Thus, Adjudicating Authority cannot turn down a plan approved by CoC, by not less than 66%, for any reason beyond non-compliance of section 30(2). And, therefore, it would not be incorrect to say that the primacy in approving or rejecting the resolution plan is given to CoC over Adjudicating Authority and this primacy of CoC is recognized as bedrock of the Code. Any other view would lead to frustration of the purpose of CoC.
The CoC do not enjoy any authority to delegate to itself the role of the Resolution Applicant including the manner of distribution of amount amongst the stakeholders, which is exclusively within the domain of the Resolution Applicant and thereafter before the Adjudicating Authority, if found discriminatory. Such being the position, the CoC cannot delegate its power to a Sub Committee or Core Committee for negotiating with the Resolution Applicant(s).
A financial creditor or an operational creditor cannot file application for initiating CIRP against financial service provider even if they maybe corporate entities because these are not corporate debtors under the Insolvency and Bankruptcy Code, 2016. Financial Service provider can file application to initiate CIRP against any corporate debtor, if the corporate debtor commits defaults. However, if a bank takes loan from the another (bank) or from any financial service provider, the debt taker bank cannot file application for initiating CIRP against other bank(or against financial service provider) as debt owned bank is out of purview of the Code as a financial service provider as discussed in the this article. Similarly, insurer is out of purview of the Code.
The laws defines that any person who makes deposit under this Ordinance called the depositor. All persons such any individual or group of individuals; proprietorship concern; partnership firm; LLP; company; AOP; trust; co-operative society and any other arrangement of whatsoever nature, receiving or soliciting deposits called depositor taker except following: (i) a Corporation incorporated under an Act of Parliament or a State Legislature; (ii) a banking company, a corresponding new bank, the State Bank of India, a subsidiary bank, a regional rural bank, a co—operative bank or a multi- State co-operative bank as defined in the Banking Regulation Act, 1949.
The Banning of Unregulated Deposit Schemes Ordinance, 2019 (See Act, click here)