Hon’ble NCLT Delhi held that the breach of the Settlement Agreement by the parties does not fall within the ambit of Operational Debt provided under Section 5(21) of the Insolvency Bankruptcy Code, 2016.
There is no such provision to implead creditors other than the ones which triggered the Corporate Insolvency Resolution Process.
A banker’s certificate is not mandatorily required for an operational creditor to begin Corporate Insolvency Resolution Process (CIRP) under section 9 of Insolvency and Bankruptcy Code, 2016.
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.
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.
Section 7 of the Code permits a financial creditor to initiate a CIRP procedure against the guarantor being a corporate debtor in accordance with the default committed by the principal borrower.
If the corporate debtor’s resolution plan was authorised and declared binding on the corporate debtor and its workers, members, creditors, guarantors, and other stakeholders under Section 31 of the Code, criminal proceedings under Section 138 will continue.
Section 5(8)(f) Explanation makes it clear that any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing.
If the Application filed under Section 7 meets all the requirements, then also the Adjudicating Authority has to exercise discretion carefully to prevent and protect the Corporate Debtor from being dragged into the Corporate Insolvency Resolution Process mala fide.
The rationale of the Ordinance is certainly to ensure that Insolvency and Bankruptcy Code, 2016 lives up to its preamble that is – maximization of value of assets. The newly inserted Section 10A certainly brings about a balance of interest between creditors and debtors.
Withdrawal of money by a Company director from the accounts of the company during the CIRP, the same will attract criminal proceedings against the Directors
The new framework allows Creditors to continue recovery process with Personal Guarantor after completion of the Corporate Insolvency Resolution Process.
This article is all about the insolvency process which has been initiated which may include filing of claims, acceptance of claims, making of the committee of creditors and resolution plan
NCLT held that the “interest” component alone cannot be claimed or pursued, in absence of the debt, to trigger a CIRP against the corporate Debtor. Further, the application pursued realization of the interest amount alone is against the intent of the IBC, 2016.
The court fined the suspended director of the corporate debtor (the applicant) Rs. 1 lakh for starting several legal actions to obtain the same remedy and wasting valuable judicial time.
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