The objective of this article is to analyze the role of directors in corporate governance by looking at the old and new Act (1956 and 2013 Act respectively), how the Indian Courts have interpreted the director’s duties through the help of landmark rulings that will give you an in-depth knowledge on the same.
Category: Comprehensive Analysis
Modification of claims post approval of Resolution Plan: can NCLT exercise equity-based jurisdiction? – By Adv. Srivatsava Reddy Beerapalli
The Code as it exists in our country has consciously limited the jurisdiction of the Adjudicatory Authority in approving resolutions plans under Section 31 and the legislature has not conferred independent equity-based jurisdiction on the NCLT. Primarily, this helps reduce delays and increase time bound resolution ensuring value maximization. On the contrary, the remarks made by the NCLAT in Paramvir and continued litigation for equitable treatment in distribution of proceeds under the resolution plan to certain stakeholders leaves room for discussion on the treatment of all stakeholders under approved resolution plans in the prevailing status quo.
Examining the Right of Subrogation under IBC: Current Status and Implications – By Adv. Yash Gupta and Adv. Vishawjeet Singh
The IBC prioritizes the revival and rehabilitation of the corporate debtor over the recovery of debt by the personal guarantor. This means that the personal guarantor's right of subrogation is sacrificed to achieve the IBC's objective. The extinguishment of the personal guarantor's right of subrogation is a departure from the established principles of contracts of guarantee. This has led to debates and discussions about the fairness of the IBC towards personal guarantors. Once the Principal Debtor's creditors have been reimbursed by the guarantor, the IBC regime does not provide for the right to subrogation, and the guarantor cannot proceed against the Principal Debtor under the IBC. Denying the right of subrogation to guarantors may have a negative impact on the credit market, as guarantors may be reluctant to participate in transactions without recovery rights.
Withdrawal of CIRP application under Section 12A of IBC: A Comprehensive Guide – By Adv. Yash Gupta
A comprehensive analysis of withdrawal of CIRP application under Section 12A of IBC at various stage with judicial pronouncements.
Decoding the Commercial Wisdom of Committee of Creditors (CoC) : An analysis of Indian & Global Scenarios – By Adv. Vishawjeet Singh
The focus of this article is to compare the “Indian Scenario vis-à-vis Global Scenario” relating to commercial wisdom of Committee of Creditors during the resolution process of a distressed company and whether the judiciary is required to interfere with the commercial decisions of the Committee of Creditors during or after the completion of process or not. The NCLT, NCLAT & Supreme Court have time & again stressed upon the ‘supremacy’ of the commercial wisdom of the Committee of Creditors. However, on numerous occasions, the courts have been tempted to decide on their scope of interference with the commercial decisions of the CoC.
Crypto Assets and Insolvency – By Alokita Tangri and Akshat Sinha
This article aims to provide valuable insights for individuals and organizations operating in the rapidly evolving cryptocurrency field. Its goal is to bring clarity to the intricacies of insolvency in the crypto world and assist in informed decision-making within this dynamic and exciting landscape.
Limiting the Jurisdiction of NCLT under Section 60(5) of Insolvency Code: A Jurisprudential Trend – By Prarthana Gupta and Tanya Shukla
NCLT has so far applied 60 (5) as a comprehensive remedy for all issues pertaining to a Corporate Debtor undergoing CIRP or liquidation. Through the cases discussed below, the authors argue that though the Court/Tribunal has acknowledged the limitations inherent to NCLT’s powers, several concerns surrounding Section 60 (5) require further clarification.
Distinction in Treatment of Financial Creditors vs. Operational Creditors under IBC – By Vidushi Puri
The distinction between financial and operational creditors is crucial under the Code. When both Operational and Financial Creditors are unsecured, it is clearly a matter of discrimination as opposed to differentiation. The ultimate purpose of every creditor, whether financial or operational, is to maximise recovery. The IBC contains no incentive mechanism to encourage such a transition and ensure that financial creditors do not act only in their own self-interest.
Personal Guarantors – Liability beyond Death and Borders : An analysis of the legal position of a guarantor upon death and change of citizenship – By K M Thomas and Ananya Arun
This article attempts to shed light on two such circumstances. The article will talk about the position of a personal guarantor when he attains citizenship in another country. Further, the article addresses whether the legal heirs of a Personal Guarantor can be held liable on the death of the Personal Guarantor
Statutory Omissions of Rights of Debtors under the Indian Contract Act, 1872 in Contra-distinction to the Insolvency and Bankruptcy Code, 2016: A Qualitative Analysis – By Anish Gupta
In this paper, the author looked at the question of whether the Indian Contract Act effectively safeguards the rights of debtors and considering the arguments advanced in Section I of this paper, came to the conclusion that the debtor’s rights are not adequately protected under a contract of guarantee u/s 126 and the sections that follow. This is to say that there is a noteworthy lack of jurisprudence around this matter and thus the rights of debtors remain largely unexplored under the Act.