Hon’ble Supreme Court verdict in State Tax Officer (1) v. Rainbow Papers Limited (2022) ibclaw.in 107 SC has declared State Tax (Gujarat VAT department) as secured creditor within the ambit of IBC recognising under Section 3(30) of the Insolvency and Bankruptcy Code, 2016 (IB Code). Hon’ble Supreme Court has categorically held that definition of secured creditor in the IBC does not exclude any Government or Governmental Authority. Further, another important issue discussed is relating to claims by the Statutory authority is that claims should be considered in plan as per books of account and also prefers liquidation in case the interest of State is not taken care in the resolution plan. This article attempts to analyse the judgment keeping in mind objectives of the Code.
The scope of adjudication in an application seeking release of assets attached by the ED does not extend to a determination of legality or validity of an attachment order under PMLA. Instead, the scope is limited to a determination as to whether an attachment order is sustainable pursuant to Section 14 and Section 32A of the IBC. As per Section 60, such an application is, prima facie, a question of law and/or priority arising out of or in relation to a CIRP. Therefore, such applications must be adjudicated by an NCLT itself.
Endeavour of the instant article is to highlight few aspects related to moratorium and issuance of sale certificate for the processes initiated prior to CIRP, while the CIRP qua Corporate Debtor is ongoing.
A recent pronouncement of the Supreme Court in Mahendra Kumar Jajodia v. State Bank of India (2022) ibclaw.in 32 SC provides further clarity on the (a) right of creditors to initiate insolvency resolution process against personal guarantors of the principal borrower; and (b) timing and jurisdiction to exercise such a right. We have discussed these aspects in this article.
The Orders passed in Francis John Kattukaran, Brilliant Alloys Pvt. Ltd., Swiss Ribbons Pvt. Ltd. held common position that the RP cannot file an application for withdrawal of an application made under section 7, 9 or 10 of the Code. It held that Regulation 30A cannot override the substantive provisions of section 12A. Accordingly, the applicant can only move an application for withdrawal of the application before the Adjudicating Authority, while the RP can’t do so. The interplay between these sections has transitioned in three years where Section 12A has gained more stringency.
SUPREME COURT RULES ON COMMERCIAL WISDOM OF CREDITORS TO ALLOW WITHDRAWAL OF INSOLVENCY PROCEEDINGS Authored by: Adimesh Lochan, Arjun Gupta, Sahil Kanuga, Nishith Desai AssociatesThe authors would like to thank Aryan Sharma (Student, Institute of Law, Nirma University) for his…
This Research Paper decodes the amendments with respect to the existing provisions in the Code and Regulations, impact on initiation/filing of new CIRP application after these amendments came into force, impact of amendments in Information Utility Regulations on filing of CIRP application and covers other relevant issues: Furnishing of Copy of Form GSTR-1, Form GSTR-3B and Copy of e-Way Bill is mandatory for filing CIRP under Section 9 of IBC; Submissions GSTRs and e-Way Bill with filing of claim; Cases where the generation of e-Way Bill is not a requirement; Submission of PAN and email address of Financial/Operational Creditor alongwith CIRP application; Fixing the responsibility of Promoters/Management to submit information within time and as per format sought by IRP/RP; Creditors’ Assistance: Assist in preparing the information memorandum, getting valuation determined and in conducting the CIRP and Assist in dealing with avoidance applications after closure of a CIRP; Difference in valuations during a CIRP and a threshold for appointment of a third valuer; Dealing with avoidance applications after closure of a CIRP; Amendments in Information Utilities Regulations regarding filing of CIRP; Brief about the process of Information of Default and Record of Default in an Information Utility
The ruling of the Calcutta High Court in the SREI Equipment Finance Ltd. (supra) case is in direct violation of the Supreme Court precedent, both in language and spirit. The decision to suspend the assessment proceeding during the moratorium period would effectively postpone the assessment, which may ultimately result in operational creditors being unable to collect their dues. This violates the law and natural justice's fundamental precepts. The judgment needs a re-look in light of the Supreme Court's rulings.
Personal Guarantor Insolvency insights, through case laws - By Rajesh Kumar Sehrawat, CA, Insolvency Professional and Prakash V. Kukreja, CA, CMA, Insolvency Professional, Registered Valuer(SFA) Recently, a personal guarantor (Mr. Sodhi) filed a writ petition with Supreme Court under Article 32…
Understanding the excluded assets and Liabilities: Insolvency Process of Personal Guarantor under the Code - By Gaurav Joshi, CS, Ll.b, I.D The provisions under Insolvency and Bankruptcy Code’ 2016 with respect to insolvency resolution and bankruptcy process for Individuals have…