In a recent case, the National Company Law Appellate Tribunal (“NCLAT”) permitted exit or withdrawal from Corporate Insolvency Resolution Process ("CIRP") after Interim Resolution Professional ("IRP") was appointed and moratorium was imposed in the case. The said order by NCLAT acted as a relief to corporate debtors, as it has paved way for out of Court settlement between the disputed parties. The said order was passed by NCLAT in the case of Vivek Bansal vs Burda Druck India Pvt. Ltd.

In a recent case, the National Company Law Tribunal ("NCLT"), New Delhi in M/s Brand Reality Services Ltd. v. M/s Sir John Bakeries India Pvt.

The Insolvency and Bankruptcy Board of India (hereinafter referred to as ‘IBBI’) vide its notification dated March 29, 2020^[1] has issued clarification regarding the period of exclusion for Insolvency Resolution Process. Through, the issuance of the above mentioned notification, the IBBI has amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 to include the following:

The Union Cabinet on December 11, 2019^[1] approved the amendment to the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘IBC’) and the same was introduced in the Lok Sabha on December 12, 2019. The amendment aims at streamlining issues of troubled companies, protect corporate debtors and prevent unnecessary revocation of insolvency proceedings under the IBC.

In a big move to strengthen norms for the Insolvency Resolution Professionals (IRP‘s), the governing body for the Insolvency Professionals, the ‘Insolvency and Bankruptcy Board of India (herein referred to as ‘the Board’) has notified amendments to the (i) the Insolvency and Bankruptcy Board of India (Insolvency Professional) Regulations, 2016 and (ii) the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016.

The Ministry of Corporate Affairs (“MCA”) notified the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 (hereinafter referred to as the “Rules”) on 15 November 2019. The objective of notifying the Rules was to provide a framework for insolvency and liquidation proceedings of Financial Service Providers (hereinafter referred to as “FSPs”) other than banks.

In as much as the Government has been in the consistent process of encouraging business operations in the nation, it also has the objective to create more transparent and systematic mechanism ensuring time bound manner and for maximization of the value assets. One of the major challenges faced by the modern commercial sector is the reposition of faith of the creditors who put their hard-earned investments at the fate of the success of the business transactions undertaken.

Resolution Procedure

In order to facilitate the smooth conduct of business transactions the Government has put in numerous efforts in the form policies and regulations. While the greatest threat posed to the lenders in the modern market operations is the impact of non-performing assets or bad loans. In order to maximize the value assets in a time bound manner, the Government enforced the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the 'IBC').

The Government has been working to facilitate the conduct of business in the country, thereby permitting a rapid boost to the Indian economy. Attributable to multiple factors such availability of multiple resources, friendly regulatory mechanism, easy availability of labour, has contributed towards the growth of the industrial sector. Numerous efforts made by the employees of the business corporates have accelerated the pace of development in the nation.

Labour welfare

The best practices in business require the establishment faith of fulfilment of obligations by the transacting parties. However, change in circumstances may often hinder the proper discharge of the duties undertaken by the parties. Situations such as insolvency and bankruptcy of one party not only obstruct the desired performance of the agreed promises but render the other party helpless for the losses it may suffer to that account.

Monitoring regime