Corporate Insolvency Resolution Process

Lease and Rentals - Are these Operational Debt under the IBC

INTRODUCTION

The Insolvency and Bankruptcy Code, 2016 (‘Code’) recognises two types of debts — financial and operational– to enable the creditors to make an application for initiating insolvency proceedings against a corporate debtor. A financial creditor and an operational creditor can initiate a Corporate Insolvency Resolution Process (‘CIRP’) under Section 7 and Section 9 of the Code, respectively. If there is a debt, other than a financial debt or an operational debt, the creditor will not qualify to apply under Sections 7 or 9 of the Code, as the case may be. Therefore, it becomes important to determine the nature of debt/claim while considering the application of an admission under the Code.
Continue Reading Lease and Rentals: Are these Operational Debt under the IBC?

‘CASH ONLY’ to dissenting financial creditors - Supreme Court in Jaypee

The Supreme Court’s judgment in Jaypee Kensington Boulevard Apartments Welfare Association & Ors vs. NBCC (India) Ltd. & Ors.[1] (“Jaypee Decision”) has laid down some new requirements whilst reinforcing several old ones in relation to the insolvency resolution regime of the country. In this article, we examine and discuss the implications of the rights of dissenting financial creditors as held in the Jaypee Decision on the corporate insolvency resolution process.
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Home Buyers are equivalent toFinancial Creditors Supreme Court Reigns

The Supreme Court in Pioneer Urban Land and Infrastructure Limited vs. Union of India (Pioneer Judgment)[1], has upheld the constitutionality of the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 (Amendment Act)[2]. Through the Amendment Act[3], the ‘real estate allottees’ (home buyers), as defined under Section 2(d) of the Real Estate (Regulation and Development) Act, 2016 (RERA), were brought within the ambit of ‘financial creditor’ under the Insolvency and Bankruptcy Code, 2016 (IBC).

A three judges’ bench headed by Hon’ble Mr. Justice Rohinton Nariman disposed off a batch of over 150 petitions filed by the real estate developers challenging the constitutional validity of the Amendment Act. The Supreme Court also held that the RERA has to be read harmoniously with the IBC and, in the event of a conflict, the IBC will prevail over the RERA.


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Sashidhar v. Indian Overseas Bank and Ors. – Commercial Wisdom Reigns Supreme

The Supreme Court’s decision in K. Sashidhar v. Indian Overseas Bank and Ors.[1]addressed a critical issue in the corporate insolvency resolution process (CIRP) – i.e. the scope of judicial scrutiny over a commercial decision taken by the committee of creditors (“CoC”) to approve or reject a resolution plan.
Continue Reading Sashidhar v. Indian Overseas Bank and Ors. – Commercial Wisdom Reigns Supreme

Swiss Ribbons vs. Union of India – The Foundation for Modern Bankruptcy Law

The authors instructed Mr. Tushar Mehta, Solicitor General of India, on behalf of the respondent Banks and Financial Institutions in the proceeding before the Supreme Court.

The Supreme Court’s decision in Swiss Ribbons v. Union of India upholding the constitutionality of the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC or the Code) is a landmark in the development of the Code.
Continue Reading Swiss Ribbons v. Union of India – The Foundation for Modern Bankruptcy Law

By utilising its powers under Article 142 of the Indian Constitution, the Supreme Court of India has delivered an unprecedented decision on August 09, 2018 in Chitra Sharma & Ors. v. Union of India and Ors[1]., and other connected matters (the Jaypee / homebuyers Case)[2]. In this era of evolving jurisprudence on the Insolvency and Bankruptcy Code, 2016 (IBC), the Supreme Court, by this landmark decision, has settled some highly debated issues with respect to its implementation and has provided much required certainty. This has been achieved by the Supreme Court paving the way to reset the clock by re-commencing the Corporate Insolvency Resolution Process (CIRP).

Continue Reading Resetting the Clock: Supreme Court Sends Jaypee Infratech Limited Back to NCLT for CIRP