While the SARFAESI Act focuses on 'recovery' and is more of a 'class' remedy, the IBC focuses on 'resolution' and seeks to establish a procedure based on cooperation of the stakeholders. Since a similarity exists in the participants in both of these regulations, the possibility of overlap persists. In this article, we shall assess the various judicial and legislative developments that confirm the status that ARCs have under IBC.
Category: Article
Provisions of the Individual Bankruptcy under IBC 2016 – By CS Gaurav Joshi
Insolvency and Bankruptcy Process of an individual in India under IBC’ 2016 has gained momentum as Financial Institutions as well as the personal guarantors have started invoking provisions of Section 95 and 94 of the Code to trigger the process for resolving insolvency of personal guarantors. Some issues involving individual insolvency are being settled by way of judicial pronouncement either by Supreme Court, NCLAT or by NCLT, whereas most of the provisions are yet pass the test of judicial scrutiny. The data issued by IBBI suggests that there are total 1612 no of application under Section 94 or 95 of the code filed by stakeholders involving an amount of Rs. 1.41 Lakh Crore. The data further suggests that till 31st December’ 2022, only 4 applications have been filed for initiating Bankruptcy Process of Individual. These numbers indicate that Individual Bankruptcy process is still at a very nascent stage. Therefore, a deeper and clear understanding among the stakeholders regarding provisions of Individual Bankruptcy is necessary so as to effectively use the provisions of Code.
Conundrum around Pre-packs for Larger Corporates – By Adv. Abhishek Arya and Varinder Kumar
The PPIRP is yet once again is into the discussion as the recent MCA discussion paper recommending amendments to the Insolvency & Bankruptcy Code, 2016 has proposed to extend the concept to larger corporates also. In this article, we have tried to critically analyze the effect of such an extension
Ajay Kumar to Mohan Raj Case: Why Cheque Bounce Proceedings must become Non-Existent During CIRP – By Mr. Nakshatra Gujrati
he present article seeks to explain the implication of this ruling and whether the Hon’ble High Court’s approach was correct while interpreting the term ‘proceedings’ under section 14 of IBC. The apex court has rejected this ruling in the case of P.Mohanraj vs Ispat Bros (2021) ibclaw.in 24 SC.
Hostile Takeover – A Forced Acquisition and Its Defences – By Ronit Khandelwal and Palash Thakkar
The term “Hostile takeover” has made hue and cry in the media and has been in spotlight since the hostile takeover of Twitter led by Elon Musk which took place last year. The method devised by Elon Musk is Bear Hug strategy. In response to the offer made by Mr. Musk Twitter commenced the Poison Pill strategy to prevent the hostile takeover of the company.
Stress in MSME Sector & Pre- Pack : Is that enough? – By S. Shivaswamy, Insolvency Professional
As per the available data on IBC Laws website so far only following 4 applications have been filed under Section 54C of IBC. Only in respect of 3 cases. oing by the content of the application/order in the matter of Enn Tee International Ltd , it is apparent that the applicant had suggested inter-alia disposal of surplus assets/land properties and using the proceeds to settle dues of OCs over a period of time. It is not clear as to why CD didn’t suggest the same solution to the creditors in the first place and arrived at settlement outside IBC through a much cheaper option like Lok Adalat etc. However, information regarding filing of RP’ report after within 30 days of initial order confirming PPIRP arrangement in either of the cases is not available.
Treatment of Public Equity Shareholders under IBC – By Adv. Abhishek Arya and CS Gagan Bajaj
In November last year, the Securities and Exchange Board of India (SEBI) has come up with a proposal to protect the interests of public equity shareholders in the case of listed companies undergoing the Corporate Insolvency Resolution Process (CIRP). There is currently no distinct division between equity shareholders under Insolvency & Bankruptcy Code (IBC). Since all equity shareholders are regarded as owners of the insolvent business, they are placed last in the "distribution waterfall." Also, the Committee of Creditors (CoC), which is made up of financial creditors, runs the CIRP with no input from public equity shareholders.
The Grey Area of Crowdfunding Regulations in India: Lessons from Anbronica Technologies Case & Sahara Judgement – Saurav Gupta
Recently, the Registrar of Companies (herein ‘ROC’) has passed an order against Anbronica Technologies Private Limited (herein after known as 'company' or 'subject company'). The said company used Tyke platform to raise fund through crowdfunding by issuing Compulsory Convertible Debentures (herein ‘CCD’).
Shareholder Activism and the case of Vikram Bakshi vs McDonalds – By Simant Tyagi
To conclude, it could be said that the ruling by the tribunal, which is significant in protecting the rights of minority owners, increased the rights of those shareholders who are the targets of oppression and poor management inside the corporation by the other shareholders. It could also be inferred that a self-sufficient code for the regulation of the administration of the business is formed by Sections 397, 398, and 402 of the Companies Act, 1956 to guarantee that the interests of the company or any of its shareholders are not harmed.
Revisiting the Discretionary Admittance of Applications under Section 7 of the IBC – By Arnav Doshi and Vidhi Basrani
In view of the controversial Vidarbha Industries decision, it is argued that the discretionary nature of Section 7 of the Code must be revisited. The legislative intent congealed in the initiation of CIRP by a financial debtor coupled with the jurisprudential wisdom prior to Vidarbha Industries postulates a case for the mandatory admittance of a Section 7 application. Further, the Ministry of Corporate Affairs inviting public comments on various amendments/changes to be considered to the Code is an opportunity that presents itself to reconsider the position laid in Vidarbha Industries and provide beneficial insulation to financial creditors.