The Insolvency and Bankruptcy Code (Amendment) bill 2017, describes the Financial Creditor and the Operational Creditor and the ambit of its applicability on creditor-debtor relationship.
The IBC has introduced new and distinct concepts of ‘Financial Creditor’ and ‘Operational Creditor’ as opposed to the Companies Act, 2013 which merely introduced the term ‘creditor’, without any classification thereof.
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.
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.
The provisions Insolvency and Bankruptcy Code, 2016 specifically provides for treatment for all sums due to any workman or employee from the provident fund
The IBC would prevail over The Customs Act, to the extent that once the moratorium is imposed in terms of Sections 14 or 33(5) of the IBC, as the case may be, the respondent authority has a limited jurisdiction to assess/determine the quantum of custom duty and other levies.
A key element that differentiates the IBC from previous legislation governing corporate insolvency is the distribution waterfall in the event of liquidation.
Case of “Sundaresh Bhatt, Liquidator of ABG shipyard vs. Central Board of Indirect Taxes and Customs, in which it was held that the IBC provisions will prevail over the provisions laid down in the “Customs Act, 1962” and also set aside the order of the NCLAT”.
Confused between the Insolvency Process & Liquidation? The procedure and differences between Insolvency Process and Liquidation is explained.
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 Hon’ble NCLAT, Principal Bench, New Delhi held that the IBC does not vest the power to NCLT to Suo-moto classify a transaction as Preferential Transaction under Section 44 r/w Section 45 of IBC.
The issue of existence of a dispute when the application under Section 9 of IBC is filed before the Adjudicating Authority. These actions raise doubt regarding the veracity of the dispute and its pre-existence.
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.
No further legal action shall be permissible by creditor, whose claim has been rendered unsatisfied as per the resolution plan.
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