The COVID-19 crisis has caused distress and failure in the MSME sector. The insolvency law since its enactment in 2016 has been amended several times in order to protect the interest of MSMEs as well as the future and growth of the Country.
Category: Debt Recovery Management
Parties other than those who triggered CIRP cannot be creditors
There is no such provision to implead creditors other than the ones which triggered the Corporate Insolvency Resolution Process.
Personal Guarantor under section 95 is exempted from section 10A of IBC, 2016
Section 10A proceedings are not applicable against the Personal Guarantor under section 95 of the Insolvency and Bankruptcy Code, 2016.
Supreme Court holds that section 7(5) Of IBC is discretionary
VIPL sought for a stay on the proceedings before the NCLT on the pretext of pendency of proceeding before the Supreme Court and resultantly, VIPL was unable to realize a substantial sum of Rs. 1730 crores which would enable the Appellant to clear the debt towards Axis Bank.
Apex Court redefines the ambit of the definition of a consumer with reference to commercial transactions
It was held that the Consumer Complaint of the appellant is not maintainable as the appellant is not a consumer as per section 2(1) d of the Consumer Protection Act,1986.
Tax authorities can’t issue notice to freeze accounts of the company during liquidation: NCLAT
The Corporate Debtor went into CIRP vide the Adjudicating Authority (AA) order dated 20.09.2019 and Mr. Hemant Mehta (Appellant) got appointed as Interim Resolution Professional (IRP).
Whether the license fee can be claimed as Operational Debt
In the present case, debt pertaining to unpaid license fee was fully covered within the meaning of ‘operation debt’ under Section 5(21), and the Adjudicating Authority committed an error in holding that the debt claimed by the Operational Creditor is not an ‘operational debt’
Resolution Plan has to be completed within the stipulated period
As per proviso to Section 12 of the IBC, the insolvency resolution process shall mandatorily be completed within a period of 330 days from the insolvency commencement date, including any extension of the period of CIRP granted under Section 12 of the IBC.
The Corporate Guarantor can initiate CIRP against the Corporate Debtor under “Right to subvention”
Proceeding against the Corporate Debtor for the recovery of the dues and hence can file a petition against the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the Adjudicating Authority.
Supreme Court’s Road Map to interpret The IBC Code for better Resolution
Hon’ble Supreme court declared that the provisions of IBC (Code) to be interpreted liberally to expand the objective of the Statute.
Debts incurred during CIRP are also a part of IRP costs, says NCLAT
the Resolution Plan in question is in violation of section 30(2) (a) of the IBC. The NCLAT subsequently modified the Resolution Plan to include this claim in accordance with the law.
Is Adjudicating Authority under obligation to accept an application against a Corporate Debtor u/s 7?
The Adjudicating Authorities have been given discretionary powers under section 7(5)(a) of I&B Code, 2016. The Authorities are required to apply their mind and take into consideration all facts and circumstances.
IBC Pecuniary Threshold: – Interest Component to Be Merged with Principal Debt?
The interest component can include in the principal debt to acquire a minimum threshold limit i.e., 1 crore if delayed payment stipulated in the agreement or invoice.
Is the Principle of Natural Justice applicable to the Insolvency and Bankruptcy Code, 2016?
The actions of the CoC by not accepting the Applicant’s Resolution Plan were void in nature and held that the Applicant must be given a fresh opportunity to participate in the process of submission of the Resolution Plan.
Hon’ble NCLAT declares claim of the license fee will be covered under the ambit of IBC
Claim of the rental lease will be treated as operational debt under Section 5(21) of the code as per the decision given by the Hon’ble NCLAT.
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