After observing the current situation of the corporate debtor no creditor is willing to infuse more funds as they are afraid of losing the same through the enforcement of any law or authority under law.
Under section 14 of the code, the moratorium order is passed. Accordingly till the time moratorium period exists no other action or suit or case or proceedings against the corporate debtor can take place.
Earlier the winding up of the company was initiated and conducted under the Companies Act, 1956 while the same has got annulled after the advent of Insolvency and Bankruptcy Code.
The Corporate Insolvency Resolution Process has to be completed in 180 days along with the provision of 90 days of extension or maximum allowed time is 270 days.
RERA or IBC- Both the laws provides with the subjective approach depending upon the facts of the case and the situation of the developer.
Home buyers who had invested in housing projects by JIL, were permitted by the Interim Resolution Professional (IRP) to submit their claims as ‘other creditors’, subordinate to financial and operational creditors of JIL.
Once NCLT has issued moratorium under section 14 of Insolvency Code in respect of Company in liquidation, Bank cannot pursue proceedings for recovery of loan.
The latest amendment bill of Insolvency & Bankruptcy, 2017 has been passed by the Lok Sabha to deal with recovery and reorganization in a speedy, reliable process.
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