The cases in which the Adjudicating Authority or Appellate Tribunal could not decide the claim on merit, such claims or issues can be raised before an appropriate forum in terms of Section 60(6) of the Code. The Financial Creditors and the Operational Creditors whose claims have been decided by the Adjudicating Authority or this Appellate Tribunal, such decision being final and is binding on all such Financial Creditors and the Operational Creditors in terms of Section 31 of the Code. Their total claims stand satisfied and, therefore, they cannot avail any remedy under Section 60(6) of the Code. The Financial Creditors in whose favour guarantee were executed as their total claim stands satisfied to the extent of the guarantee, they cannot reagitate such claim from the Principal Borrower.
Section 12A is inserted by second amendment in IBC on recommendation by Insolvency Law Committee Report submitted in Mar, 2018 to provide facility to withdraw application made under section 7, 9 or 10 on settlement even if CIRP has been initiated. Before the Section 12A, there was no provision in the Code or the regulations in relation to permissibility of withdrawal post admission of a CIRP application. As discussed above, only rule 8 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016t provide facility to withdraw the application on a request by the applicant before it is admitted by the NCLT.
“Decoding the Code” Analysis on time limit under section 12 of the Code for completion of insolvency resolution process (Updated up to 02.07.2019) As per the Insolvency and Bankruptcy Code, 2016 (the Code), the procedure involved in the Corporate Insolvency…
"Decoding the Code" All about the Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 including judicial pronouncements (Updated up to 18th July, 2019) Since the enforcement of the Insolvency and Bankruptcy Code, 2016 ('IBC' or 'the Code'),…
"Decoding the Code" Persons who may initiate Corporate Insolvency Resolution Process(CIRP) Chapter-II of the Insolvency and Bankruptcy Code, 2016 (referred as 'IBC' or 'the Code') covers Corporate Insolvency Resolution Process(CIRP). As per Section 6 of the Code, following persons may…
A financial creditor or an operational creditor cannot file application for initiating CIRP against financial service provider even if they maybe corporate entities because these are not corporate debtors under the Insolvency and Bankruptcy Code, 2016. Financial Service provider can file application to initiate CIRP against any corporate debtor, if the corporate debtor commits defaults. However, if a bank takes loan from the another (bank) or from any financial service provider, the debt taker bank cannot file application for initiating CIRP against other bank(or against financial service provider) as debt owned bank is out of purview of the Code as a financial service provider as discussed in the this article. Similarly, insurer is out of purview of the Code.
The Insolvency and Bankruptcy Code, 2015 was introduced in Lok Sabha on 21st December, 2015 and
referred to the Joint Parliamentary Committee. The Committee had presented its recommendations
and modified the Bill based on its suggestions. Later the Insolvency and Bankruptcy Code, 2016
was passed by both the Houses of Parliament in May 2016 and the same has been notified. This is
one of the major economic reforms Bill moved by the Government. The objective of the Insolvency
and Bankruptcy Code, 2016 is to consolidate and amend the laws relating to reorganisation and
insolvency resolution of corporate persons, partnership firms and individuals in a time bound
manner so as to make it easy for the investors to exit within a fixed time frame in an effort to
improve the ease of doing business in India. Since there is no single law in India that deals with
insolvency and bankruptcy, one of the most important reforms envisaged in this bill is to make
substantive changes in eleven enactments and repealing some to avoid conflicting rules, i.e., now
only 1 Act to be followed, instead of 11 different Acts. It also opens up a new window of professional
opportunity for Chartered Accountants as Insolvency Professionals. Read on to know more...