According to S.4 of the IBC, the minimum default required to initiate insolvency proceedings against a corporate debtor is Rs. 1 Lakh.
In this case the recovery proceedings were pending before the debt recovery tribunal and the amount claimed by the claimant was in dispute.
After observing the current situation of the corporate debtor no creditor is willing to infuse more funds as they are afraid of losing the same through the enforcement of any law or authority under law.
Moratorium Period under section 14 of the code shall not apply upon such proceedings under the prevention of money laundering act.
Insolvency and bankruptcy Law 2016, has categorised the home buyers debt as financial debt to the real estate company/builder and therefore, homebuyers can claim their dues as bank claims its debt.
As per section 8 of IBC an operational creditor, if does not receive amount from corporate debtor, has to deliver a demand notice of unpaid amount along with the copy of invoice demanding payment of the amount involved.
In the light of the provisions and section 238 of IBC, when there arises any inconsistency between the aforementioned two laws the provision of IBC will prevail over the provisions of SARFAESI Act, 2002.
Under section 14 of the code, the moratorium order is passed. Accordingly till the time moratorium period exists no other action or suit or case or proceedings against the corporate debtor can take place.
The Apex court of the country has denied to put stay on the NCDRC’s order allowing the homebuyers of JayPee Infratech Ltd. to move against the parent company Jai Prakash and Associates for compensation and possession of their respective flats.
The former directors of the corporate debtor shall not merely provide the financial status of the corporate debtor but more than that so that they are aware of the terms to which they are bound.