Case Analysis

Case Analysis on Vidarbha Industries Power Ltd. v Axis Bank Ltd. – By Adv. Sakshi Thakkar

The Supreme Court’s recent judgement in the case of Vidarbha Industries Power Ltd. v. Axis Bank Ltd. emphasises the NCLT’s jurisdiction under Section 7(5)(a) of the IBC to rule on creditor requests to begin CIRP proceedings against debtors. It highlights how crucial it is to use this discretion while taking into account the debtor’s ability to continue under present management, pending legal issues, CIRP’s viability, and financial stability.

The judgement adopts a fair methodology, balancing the interests of creditors with the ultimate goal of optimising asset value and encouraging settlements rather than liquidations. It distinguishes between different types of creditors while adhering to the coherence and entrepreneurial development goals of the IBC.

It provides the necessary clarification, but it also emphasises the need for precise rules or standards to guarantee the uniform application of NCLT discretion. In order to guarantee that IBC goals are met without sacrificing justice or procedural integrity, oversight and monitoring procedures should be added to further improve the effective execution of this rule.

In summary, this historic decision strengthens trust in India’s bankruptcy system and advances a more nuanced approach to insolvency resolution by improving the way the Insolvency and Bankruptcy Code is applied.

Case Analysis on Vidarbha Industries Power Ltd. v Axis Bank Ltd. – By Adv. Sakshi Thakkar Read Post »

Case Analysis on RFS Infrastructure Vs. Mukul Kumar, 2023 – By Somya Gadpayle

Many efforts are put time and again to uplift the spirit of Insolvency Resolution Process through judicial pronouncements or by dealing with the gaps in law. RPS Infrastructure Judgement dealt with an issue surrounding the resolution professional’s fettered position in dealing with the delayed claims and maintaining the balance to ensure that timely resolution takes place. The Amendment in Regulations beautifully portrays how the judicial precedents can be set as a guiding way for bridging the gap in the laws and regulations. Henceforth, the condonation of delay, only to a certain time period is treated with the provision with the objective that the issue of belated claims can be treated as well as the fate of corporate debtor and the stakeholders are not jeopardized.

Case Analysis on RFS Infrastructure Vs. Mukul Kumar, 2023 – By Somya Gadpayle Read Post »

Case Analysis on Adani Power Limited Vs. Shapoorji Pallonji and Co. – By Shrikar Venkat Ventrapragada

In the case of Adani Power Limited vs. Shapoorji Pallonji and Company[10], the Supreme Court appears to have resolved the ambiguity that arose in Fourth Dimensions Solutions Ltd. v Ricoh India Ltd & Ors.(supra) by ruling that the observations and directions recorded by the NCLAT are clear and unambiguous. Specifically, they state that the approved RP is binding on all parties and cannot be the subject of arbitration or any other proceedings. The respondents’ claim has been classified by the IRP as a “contingent liability,” and they are free to proceed with the arbitration process in order to have the claim decided. The supreme court further declared that the appellant’s rights and obligations under the RP shall be unaffected even in the event that the respondent’s claim is successful. As a result, the Supreme Court dismissed the application.

Relying on the fresh slate principle, a successful resolution applicant may now refuse any further payment for contingent claims that settle following the approval of a resolution plan by NCLT. Potential resolution applicants will now have ultimate say over the whole settlement proposed to be made for the acquisition of a company going through insolvency procedures, which will provide them a great deal of comfort.

Case Analysis on Adani Power Limited Vs. Shapoorji Pallonji and Co. – By Shrikar Venkat Ventrapragada Read Post »

Case Analysis: State Tax Officer v. Rainbow Papers Limited – By Vibhor Goel

While the NCLAT and NCLT severely erred in their findings, the apex court provided a well-rounded reasoning for arriving at it’s decision. Judgements like these maintain the faith of citizens in the justice dispensing ability of the apex court. However, it may have been wise for the judiciary to take cognizance of the failure of the RP to exercise proper due diligence before the approval of the resolution plan and encourage RPs involved in any future CIRPs to exercise proper diligence. This cognizance may not necessarily have been in a penal form, however, even diligence guidelines by the apex court for RPs would ensure a more efficient CIRP process.

Case Analysis: State Tax Officer v. Rainbow Papers Limited – By Vibhor Goel Read Post »

Case Analysis: Kotak Mahindra Bank Ltd. Vs. Kew Precision Parts Pvt. Ltd. and Ors. – By Aryan Jain

The IBC jurisprudence in our country is still in its nascent stage and requires cautious adjudication. A step in the right direction will complement the legislative competence of insolvency laws in our country and will promulgate a sound corporate protection regime,

Considering given facts and circumstances of the case, the Court in its wisdom was righteous in allowing the appeal and re-instating the CIRP against the CD as NCLAT’s judgement was fundamentally erroneous, wherein it deserted the provisions stipulated even within the code.

Through the judgement, the Supreme Court has clarified the law on the application of Section 25(3)[10] and its consequences on the extension of period of limitation. The Supreme Court, by adopting the usage of section 25 (3) has come to the rescue of various creditors who were unable to enforce proceedings against their borrowers despite having written acknowledgments of debt. However, in my opinion the court by adopting the aforesaid interpretation and diluting the rigid norms of limitation in regard to IBC jurisprudence has opened the can of new worms, wherein it would face the dichotomy of bailing out the innocent creditors against the CD’s as well as catering to the time barred process of CIRP proceedings.

Case Analysis: Kotak Mahindra Bank Ltd. Vs. Kew Precision Parts Pvt. Ltd. and Ors. – By Aryan Jain Read Post »

Does the Commercial Wisdom of the Committee of Creditors balance the Interest of all Stakeholders? – Adv. Ranit Kumar Bose and Adv. Vandana Tiwari

Recently, the NCLT, Kolkata had an occasion to deal with allotment of NIL value to the Dissenting Unsecured Financial Creditor in the Resolution Plan Application of Suasth Health Care Foundation (Suasth Health). The Bench of Hon’ble Members, Bidisha Banerjee and D. Arvind has significantly interpreted Section 30(2)(b) and Section 53(1) of the IBC by analysing the legislative intent of those provisions in insolvency law in India and proposed a new legal overture in the insolvency law regime.

Does the Commercial Wisdom of the Committee of Creditors balance the Interest of all Stakeholders? – Adv. Ranit Kumar Bose and Adv. Vandana Tiwari Read Post »

Is Resolution Professional a Public Servant? – By Ms. Reyyi Sameera and Ms. Rapaka Sravya

The most debated topic these days in the regime of Insolvency and Bankruptcy Code, 2016 is whether a Resolution Professional is a Public Servant the Prevention of Corruption Act, 1988 or not. The two High Courts of Jharkhand and Delhi gave two conflicting opinions in the same year and it is to the apex court to settle the position now.

Is Resolution Professional a Public Servant? – By Ms. Reyyi Sameera and Ms. Rapaka Sravya Read Post »

Landmark Supreme Court Ruling: Balancing Insolvency and Arbitration in the Indus Biotech Case – Rebecca Singh

The Supreme Court’s analysis provides a structured framework for handling simultaneous Section 7 IBC and Section 8 Arbitration Act applications. It prioritizes the determination of default within the insolvency process and safeguards against strategic attempts to delay proceedings. This ruling is a significant step towards efficient insolvency resolution while upholding the rights of creditors and corporate debtors.

Landmark Supreme Court Ruling: Balancing Insolvency and Arbitration in the Indus Biotech Case – Rebecca Singh Read Post »

Hyper classification amounts to unreasonableness under IBC – By Ravi Charan Pentapati, Partner, Dentons Link Legal

The Doctrine of Reasonable Classification is important in this aspect and the Resolution Professional must ensure that such classification is reasonable and free from arbitrariness. The Resolution Professional has taken a pedantic and hyper technical view of the matter, thereby causing injustice to the Appellants and the Hon’ble Supreme Court has rightly strike a balance between the legitimate rights and interests of the parties and set-aside the decision of the Resolution Professional.

Hyper classification amounts to unreasonableness under IBC – By Ravi Charan Pentapati, Partner, Dentons Link Legal Read Post »

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