Vidarbha Industries Power and Rainbow Papers judgments of Supreme Court may be nullified in incoming amendments under Insolvency and Bankruptcy Code, 2016 (IBC)

There is total 16 judgments (reported in IBC Laws till 18.01.2023) were passed by various forms such NCLAT/NCLT referring Vidarbha Industries Power Ltd. Vs. Axis Bank Ltd. (2022) ibclaw.in 91 SC. Similarly, total 8 judgments (reported in IBC Laws till 18.01.2023) were passed by various forms such NCLAT/NCLT referring State Tax Officer Vs. Rainbow Papers Ltd. (2022) ibclaw.in 107 SC. On January 18, 2022, MCA has invited public comments on various amendments in IBC. In these proposed amendments, it has also proposed that: a. Section 7 of IBC may be amended to clarify that while considering an application for initiation of the CIRP by the financial creditors, the AA is only required to be satisfied about the occurrence of a default and fulfilment of procedural requirements for this specific purpose (and nothing more). Where a default is established, it is mandatory for the AA to admit the application and initiate the CIRP. b. All debts owed to Central Government and the State Government, irrespective of whether they are secured creditors pursuant to a security interest created by a mere operation of statute, shall be treated equally with other unsecured creditors. These all judgments which referred Vidarbha Industries Power and Rainbow Papers judgment can be access using sub-subject in IBC Laws’s Case Law Portal.

SEBI vs. IBC – A post CIRP anomaly – By Akshit Gupta

On November 11, 2022, The Securities and Exchange Board of India (SEBI) released a consultation paper[1] on the modalities of the Insolvency and Bankruptcy law, when the process was applied to publicly listed companies . It was an attempt to streamline the interests of a private equity  investor or shareholder with that of a financial creditor, associated with an entity undergoing the Corporate Insolvency Resolution Process (CIRP).  The notification was in response to the grievances expressed by the shareholders of delisted entities post liquidation vis-a-vis the asset distribution process.

Implications of PUFE Transactions on Independent Directors under IBC – By CA. D Arvind, Insolvency Professional

Implications of PUFE Transactions under IBC on Independent Directors  Authored by:CA. D Arvind, Insolvency Professional The principal object of Insolvency and Bankruptcy Code is to keep the corporate as a going concern and in case of an insolvency the rescue…

Cross-Border Insolvency with reference to the ‘Centre of Main Interest’ – By Archit Bhadani

Cross-Border Insolvency with reference to the ‘Centre of Main Interest’ - Authored by: Archit BhadaniGraduate Insolvency Programme at the Indian Institute of Corporate Affairs The introduction of Insolvency and Bankruptcy Code, 2016 in India is being considered as the biggest…

The law will assist only those who are vigilant about their rights and not those who sleep over them – Article authored by Adv. Pratik Sarkar

The law will assist only those who are vigilant about their rights and not those who sleep over them -Sagufa Ahmed v. Upper Assam Plywood Products (P) Ltd., (2021) 2 SCC 317 -Article authored by Adv. Pratik Sarkar It is…

Standard of pre-existing dispute under IBC in Rajratan Babulal Agarwal vs Solartex India Pvt. Ltd. – By Adv Nipun Singhvi and Adv. Vishal J Dave

Warranty comes to rescue of Corporate Debtor : ‘Sale of Goods Act (SOGA)’  Vs IBC Authored by:Adv Nipun Singhvi,Adv. Vishal J Dave The Hon’ble Supreme Court (“SC”) verdict in Rajratan Babulal Agarwal vs Solartex India Pvt. Ltd. & Ors. (Civil…

Analysis of PPIRP Process and Its benefits as compared to CIRP – By Mallika Tiwary

Analysis of PPIRP Process and Its benefits as compared to CIRP - By Mallika Tiwary INTRODUCTION Pre- Packaged Insolvency Resolution Process (PPIRP) came into existence in April 2021 by way of an amendment in the Insolvency and Bankruptcy Code, 2016[1].…

Accounting for the Right of the Personal Guarantor: Critique of the Plea Challenging Validity of IBC – By Lolita Delma Crasta

On August 2022, Anil Ambani filed a plea challenging the constitutionality of certain IBC provisions in response to the insolvency proceedings initiated against Reliance Group. The validity has been raised against Section 95 (Application by creditor to initiate insolvency resolution process), 96 (Interim-moratorium), 97 (Appointment of resolution professional), 99 (Submission of report by resolution professional), 100 (Admission or rejection of application) of the IBC Code, 2016.

Fresh Start Process in India and United Kingdom – By Hariharran

“Fresh start” is a first step to free up the debtors from the old legislation of the colonial era such as the Presidency-Towns Insolvency Act of 1909 and the Provincial Insolvency Act of 1920 but the debtors need some guidance and assistance from misuse of the law. Many institutions from microfinance industry and commercial banks which lend money to such institutions apprehend that such a legislation in India will encourage small unsecured debtor to default which will eventually destroy the credit culture. It is important to understand that this process do not “erase” a debt; the discharge order is an injunction that makes a debt uncollectible. But this process will provide relief to small debtors there are various concerns in its implementation procedure. One of the major drawbacks to seek a fresh start, that the debt recovery tribunals (DRT) and there are very less than across the country.

Does the Supreme Court need to clarify the applicability of the increased Insolvency Threshold? – By Naman Khatwani

On March 24, 2020, an amendment in the insolvency threshold was notified by the MCA to increase the amount of default from 1 lakh rupees to 1 crore rupees for initiating insolvency process against corporate debtors. Since the notification, it has been interpreted differently by various benches of the NCLT despite there being precedent set out by the NCLAT. The article aims to determine why the notification dated March 24, 2020 has been interpreted differently by various benches, and whether it needs settling by the Supreme Court.