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.
The code has helped the creditors to recover their amount from defunct companies and bring them back to their actual position. IBC was introduced so as to reduce India’s long-standing problem of NPAs.
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.
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.
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 allottees are left helpless when the developers stands either insolvent or incapable of delivering the possession even after passage of years beyond the date of delivery.
The enforcement proceedings for the foreign award (under S. 47-48) are the last and final stage where the debtor can resist the award from becoming binding/ enforceable for grounds listed under Section 48 of the Arbitration Act.
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 Code was enacted in 2016 to consolidate and amend the laws governing corporate reorganization and insolvency resolution for corporations, partnerships, and individuals.
IBC is economic legislation and that when it comes to economic legislation, flexibility should be given to the legislature because no economic law can be fool proof at its inception.
IBC was introduced to reorganise, restructure or to consolidate the existing framework into a single law for the purpose of Insolvency and Bankruptcy.
PPIRP (Pre-packaged Insolvency Resolution Process) is an alternate for normal Insolvency Process. It has been announced for MSME Sector.
The NCLT and the National Company Law Appellate Tribunal (NCLAT) have to ensure that they do not usurp the legitimate jurisdiction of other courts, tribunals and for when the dispute is one which does not arise solely from or relate to the insolvency of the Corporate Debtor.
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