the Insolvency Law Committee in 2020 constituted a sub-committee to study Pre-packaged Insolvency Resolution Process (PPIRP). On the basis of this subcommittee’s recommendations, the Insolvency and Bankruptcy Code was amended on 4/4/2021 through an ordinance to bring effect to this change.
CIRP is a process to determine the capability of repayment of the defaulted corporate. For this purpose, IRPs are appointed. They evaluate the assets and liabilities to determine the capability of repayment.
Section 29A of the Insolvency and Bankruptcy Code has emerged as one of the key aspects in determining the Eligibility of the Potential Resolution Applicants in a tedious attempt to save the company in question under the Corporate Insolvency Resolution Process (CIRP).
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.
Section 10A proceedings are not applicable against the Personal Guarantor under section 95 of the Insolvency and Bankruptcy Code, 2016.
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 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.
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.
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.
To provide a relief to MSME and to offer them some respite from this pandemic, the process of pre-packaged insolvency resolution was introduced. This PIRP was introduced by way of ordinance dated 04.04.2021 by the Ministry of Law and Justice.
the interest of the allottees is protected and the survival of real estate companies and completion of projects is ensured. As the amendment in the IBC has brought much needed clarity and provided the much-needed right to the home buyers/allottee.
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.
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.
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.
join For Updates