Limitation and Insolvency Laws (IBC)
The apex court held that the Code isn’t a machinery for recovery though its usage in several perspectives still be within the nature of a recovery system.
The apex court held that the Code isn’t a machinery for recovery though its usage in several perspectives still be within the nature of a recovery system.
‘Financial Debt’ would have to be construed to include interest free loans advanced to finance the business operations of a corporate body.
Different forums provide for different reliefs and one must be cautious enough before choosing an appropriate forum. Before choosing the appropriate forum, points to be analyzed are type of violation by the builder, what relief is prayed for, urgency, repetitive nature, financial condition of the builder, status of other projects, etc.
The NCLAT ruling, on the other hand, may present some difficulties for banks that have extended bank guarantees. When the IBC imposes a moratorium period, recouping funds paid under bank guarantees from a corporate debtor may be difficult.
A dispute arose after the completion of the liquidation proceeding and whether the dispute relates to special legislation, such as the Copyright Act, where civil courts have been granted exclusive jurisdiction.
This judgement is a step in the right direction because it recognizes the authority of a non-petitioning creditor to request for a transfer of the winding up proceedings. It assures that A creditor is not deprived of their right just because they didn’t participate in the initial winding up procedure against corporate debtor.
The Supreme Court clarified the code’s object while keeping legislative intent in mind. The court, through this judgement, has struck a balance between creditors’ rights and debtor companies’ remedies.
Since the Limitation Act is applicable to applications filed under Sections 7 and 9 of the Code from the inception of the Code, Article 137 of the Limitation Act gets attracted. “The right to sue”, therefore, accrues when a default occurs.
The NCLAT, in its Order dated 23.04.2019, ruled that GMSPL’s (Ghanshyam Mishra and Sons Pvt. Ltd.) Resolution Plan is better compared to the other Applicants. However, NCLAT noted that the parties’ claims that are not covered in the Resolution Plan may be raised before the relevant forums.
The Adjudicating Authorities have affirmed the IBC’s goals through a series of judgments and further proved its prevalence over the other laws of land.
The Supreme Court of India defined Section 60(5) of the Code as a residuary jurisdiction vested in the NCLT, allowing the NCLT to decide all questions of law or fact arising out of or in relation to the corporate debtor’s insolvency resolution or liquidation under the Code.
Introduction of Insolvency and Bankruptcy Code, 2016 has decreased the idea of Subordinate Charge as Form H and Section 53 of Insolvency and Bankruptcy Code (“IBC”) recognizes only secured creditors.
The resolution professional, as proposed respectively in the application under section 7 or section 10 of IBC, shall be appointed as the interim resolution professional under Section 16(2) of IBC, if no disciplinary proceedings are pending against him.
Creditors who fails to the submit the claims with proof within 14 days can submit their claims within 90 days from the Insolvency Commencement date as per the amendment of Regulation 12(2).
Any person aggrieved by the decision of NCLT, or is not satisfied with the decision or if there is any mistake or error on part of NCLT then such a person can appeal NCLAT u/s 61 of IBC for its corrections and proper disposal of judgement/order.