IBC Laws - In case of assignment of debt during CIRP application pending before NCLT, there is no prohibition in the IBC from continuing the proceeding by an assignee - Siti Networks Ltd. Vs. Assets Care and Reconstruction Enterprises Ltd. & Anr.

In case of assignment of debt during CIRP application pending before NCLT, there is no prohibition in the IBC from continuing the proceeding by an assignee – Siti Networks Ltd. Vs. Assets Care and Reconstruction Enterprises Ltd. & Anr. – NCLAT New Delhi

December 16, 2022

In this case, HDFC Limited filed CP under Section 7 of the IBC seeking initiation of CIRP against the Corporate Debtor. HDFC Ltd. assigned the debt to the Assets Care and Reconstruction Enterprise Ltd. Assets Care and Reconstruction Enterprise Limited filed an I.A. seeking to be substituted as Financial Creditor in place of original Applicant and to be permitted to pursue the C.P. filed by the HDFC Limited. Learned Counsel for the Appellant submits that the assignee could not have been permitted to continue Section 7 proceedings although it is open for the assignee to file a fresh Application under Section 7 which was permissible on the strength of assignment. NCLAT held that the order of the Bengaluru Bench NCLT dated 26.08.2019 on which reliance has been placed by the Appellant cannot be said to be laying down a correct law to be followed as a precedent. As has been observed rightly by the Adjudicating Authority, there is no prohibition in the IBC or any of the Regulations from continuing the proceeding by an assignee. Section 5(7) of the IBC which defines Financial Creditor also includes a person to whom such debt has been legally assigned or transferred to.

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Chapter	Topic	Content
CH-2: General & Definitions
		Short Note on Insolvency and Bankruptcy Code, 2016 (IBC, 2016)
		Dispute and Existence of a Dispute
		Operational Debt and Operational Creditor
		Persons who may initiate Corporate Insolvency Resolution Process(CIRP)
		Analysis provisions of Limitation Act, 1963 with respect to Insolvency and Bankruptcy Code, 2016
CH-3: CIRP
	Topic-1 : CIRP Application & Withdrawal
		Analysis of Minimum amount of default under Section 4 of IBC
		Procedure of filing application by Financial Creditor before NCLT under Section 7 of the IBC
		Procedure of filing application by Operational Creditor before NCLT under Section 8 & 9 of the IBC
		Initiation of CIRP by corporate applicant under Section 10 of the IBC
		Analysis of withdrawal of CIRP proceeding pursuant to settlement under Section 12A of Insolvency and Bankruptcy Code, 2016 (IBC)
	Topic-2 : Declaration of moratorium and public announcement
		Declaration of moratorium and public announcement [Section 13, 14 & 15 of the IBC]
		All about the Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 including judicial pronouncements
	Topic-3 : Appointment and tenure of IRP & RP
		Appointment and tenure of Interim Resolution Professional and Resolution Professional [Section 16, 22 & 27 of the IBC]
		Role of an Interim Resolution Professional and Resolution Professional
	Topic-4 : Management of affairs by IRP
	Topic-5 : Receive and collate all the claims submitted by creditors
	Topic-6 : Committee of creditors and meetings
		Constitution of Committee of Creditors under Section 21 of IBC
		Role of Committee of Creditors & It’s Commercial Wisdom
		Analysis of provisions on Authorised Representative under IBC
		Meetings & Voting of the Committee of Creditors under Section 24 of the IBC
	Topic-7 : RP to conduct the CIRP and manage the operations
		Resolution Professional to conduct the CIRP and manage the operations of the Corporate Debtor
		Insolvency Resolution Process Costs & Essential supplies
		To identify preferential transactions under Sec. 43 of the Code in any CIRP, step to be taken by a Resolution Professional
	Topic-8 : CIRP and Resolution Plan
		Information Memorandum, Expression of Interest, Request for Resolution Plans & Resolution Plans
		Role of the prospective resolution applicant
		Persons not eligible to be Resolution Applicant [Sec. 29A of IBC]
		Submission and approval of the Resolution Plan
		Liability for prior offences under Section 32A of the IBC
CH-4 : Liquidation Process
	Topic-1 : Initiation of Liquidation
	Topic-2 : Appointment & Remuneration of Liquidator
		Appointment & Remuneration of Liquidator under Sec. 34 of IBC
		Powers and duties of Liquidator under Sec. 35, 37 of IBC
	Topic-3: Liquidation Estate
	Topic-4: Public announcement, Preliminary report, Early dissolution and Progress reports under Liquidation
	Topic-5: Claims under Liquidation
	Topic-6: Preferential, undervalued and Extortionate Credit Transactions
		Preferential, Undervalued and Extortionate Credit Transactions under Sec. 43, 44, 45, 46, 47, 48, 49, 50, 51 of IBC
		To identify preferential transactions under Sec. 43 of the Code in any CIRP, step to be taken by a Resolution Professional
	Topic-7: Secured Creditor in Liquidation Proceedings
	Topic-8: Realisation of Assets in Liquidation Proceedings
	Topic-9: Proceeds of Liquidation and Distribution of Proceeds
CH-5 : Personal Guarantor
		Chapter VIII Indemnity and Guarantee of Indian Contract Act, 1872
		All about Personal Guarantor under IBC Part-I
		All about Personal Guarantor under IBC Part-II
		Insolvency Resolution Process Regulation
		Bankruptcy Process for PG Regulation
		IRP Application to AA Rules
		Bankruptcy Process Application to AA Rules

In case of assignment of debt during CIRP application pending before NCLT, there is no prohibition in the IBC from continuing the proceeding by an assignee – Siti Networks Ltd. Vs. Assets Care and Reconstruction Enterprises Ltd. & Anr. – NCLAT New Delhi

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