This article is an attempt to discuss and see what lead to in Arpan packaging Pvt. Ltd. vs Regma Ceramics Pvt. Ltd. (2023) ibclaw.in 240 NCLAT judgment of the NCLT and NCLAT.
Category: Experts Corner
Decoding the Doctrine of Antecedent Debt : A Condition to Preference – Pathik Choudhury, Advocate
Section 43 of the Insolvency and Bankruptcy Code, 2016 (IBC) defines a transaction as a “preferential transaction” if the transaction is in relation to transfer of the property or interest of the Corporate Debtor for the benefit of a creditor, surety or guarantor “in relation to an antecedent debt” and if the transaction has the effect of putting such creditor, surety or guarantor in a beneficial position in the distribution of assets as prescribed under Section 53 of the IBC. Further, the transaction ought to have taken place two years prior to the insolvency commencement date in the case of a related party, or one year otherwise. However, the IBC does not specify when a “debt” should be treated as an “antecedent” debt.
Insolvency Code – Progress and Challenges – By Adimesh Lochan, Arjun Gupta and Sahil Kanuga, Nishith Desai Associates
The article provides our analysis on (a) empirical data on recoveries and investments under the Code, and (b) judicial pronouncements and their impact on the stakeholders.
Bad Bank kicks off with Jaypee for systemic resolution of large complex assets – By Kajal Bhatia, Legal Analyst at India Debt Resolution Company Ltd.
The Hon'ble NCLT Principal Bench, Delhi approved the Resolution Plan on 07.03.2023. Jaypee Infratech Limited becomes the first acquisition of India’s revolutionary Bad Bank, signalling a promising future for distressed assets. The Bad Bank, which is a twin structure comprising of National Asset Reconstruction Company Limited (NARCL) and India Debt Resolution Company Limited (IDRCL), has been established to facilitate the effective resolution of large and complex non-performing assets (NPAs), in line with the announcement made by the Hon'ble Finance Minister in the Union Budget of February 2021.
The stamp duty payable during assignation of debt by Asset Reconstruction Companies – By Adv. Haaris Moosa
In Phoenix Arc Private Limited, Mumbai Vs. M/S. Cherupushpam Films Pvt Limited, Ernakulam (2023) ibclaw.in 48 NCLT (hereafter Phoenix ARC) the question raised before the NCLT, Kochi Bench was whether stamp duty has to be paid on a deed assigning debt to an Asset Reconstruction Company (ARC). The NCLT Kochi Bench has held that the ARC is bound to pay the appropriate stamp duty as per the relevant state legislation, in this case the Kerala Stamp Act, 1959 (KSA, 1959
EPFO Vs Banks – The Priority in Payment of Debts – By Chidambaram Ramesh
Recently, the Madras High Court ruled that the banks claiming as secured creditors under the SARFAESI Act cannot seek a ‘first charge’ over the lien on the money deposit because the lien is not covered under the SARFAESI Act as a security interest. Two arguments support the ruling of the Madras High Court. First, the term “lien” is notably omitted from Section 2(z)(f) of the SARFAESI Act. Second, Section 31 of the SARFAESI Act specifies that the Act’s provisions do not apply to the lien.
Personal Guarantors’ Insolvency: An Analysis of Recent Judicial Trends – Adv. Akshay Goel and Adv. Nipun Gautam
The problem with this interpretation of Section 96 is two fold; firstly, the presumption that a liability under Section 66-67 of IBC is a future debt, and secondly, a practical impossibility arising out of the judgment. Addressing the first, it is pointed out that under Section 66, a resolution professional reports such transactions which in his opinion are fraudulent in nature and seeks a direction that the management of the corporate debtor be directed to make contribution to the assets of the corporate debtor to the extent of the impact of such fraudulent transactions.
A Curse to Personal Guarantors under Insolvency Law – By Adv. Senguttuvan K and Adv. Anu Viswanath
In this article, the authors are trying to analyse the plight of the personal guarantors after the IBC Amendment Act 2018.
Treatment of Auto Loan charge by Loan Financers under the Insolvency Code – By Adv. Gaurav Mitra and Adv. Lavanya Pathak
Pending consideration by the Supreme Court of India, the decision in the case of Volkswagen Finance Pvt. Ltd. v. Sree Balaji Printopack Pvt. Ltd. (2020) ibclaw.in 302 NCLAT will have a colossal effect on the auto loan industry of the country. The matter, currently being heard by a bench headed by Justice DY Chandrachud, shall be determinative of the legal position regarding the admissibility of a ‘claim’ before the liquidator, based on a hypothecation ‘charge’ over a vehicle where the charge is registered with the Regional Transport Office under VAHAN, in accordance with Section 51 of the Motor Vehicle Act, 1988. While the NCLAT has answered the said question in the negative, stating that registration with the Registrar of Companies under Section 77(3) of the Companies Act is necessary, the authors are of the view that the same is neither a legal requirement nor does it bode harmoniously with the scheme of applicable laws.
A Critical Analysis of NCLAT’s Recent Decision on Provident Fund Dues- By Chidambaram Ramesh
This article explains and evaluates the recent judgement of the NCLAT in Mr B.Parameshwara Udpa, RP of M/s Easun Reyrolle Ltd. vs. Assistant Provident Fund Commissioner, EPFO.[1] Initially, the article describes the case’s facts. Second, the article explains and analyses the NCLAT’s ruling, including how the decision contradicts the language and spirit of the Insolvency legislation and Supreme Court decisions. The article finishes with some views on the repercussions and negative impacts of the ruling on workers’ social security rights.