The Polyvocal Court
In its decision in Ghanashyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd., a bench of three Judges of the Supreme Court held that “Harmonious construction of clause (10) of Section 3 of the I&B Code read with clauses (20) and (21) of Section 5 thereof would reveal, that even a claim in respect of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority would come within the ambit of ‘operational debt’.
Introduction
The Supreme Court has held that if the Resolution Plan ignores the statutory demands payable to any State Government or legal authority, the Adjudicating Authority is bound to reject the same.
The Apex Court in State Tax Officer v.Rainbow Papers Limited [Judgement dated 6 September 2022] was of the view that the Committee of Creditors, which might include financial institutions and other financial creditors, cannot secure their own dues at the cost of statutory dues owed to any Government or Governmental Authority or for that matter, any other dues.
The Hon’ble Supreme Court vide its order dated May 18, 2022 in Indian Overseas Bank Versus M/S Rcm Infrastructure Ltd. And Another[1] observed that the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) cannot be continued once the Corporate Insolvency Resolution Process (CIRP) has been initiated and moratorium is ordered under the Insolvency and Bankruptcy Code, 2016.
Under the Insolvency and Bankruptcy Code, 2016 (Code) and under the Companies Act, 2013 (Act), an order of the National Company Law Tribunal (NCLT) can be appealed before the National Company Law Appellate Tribunal (NCLAT). The time-period for filing such an appeal is maximum of 45 days under the Code and 90 days under the Act.
Under the Insolvency and Bankruptcy Code, 2016 (Code), if a corporate debtor is unable to pay its debts, then insolvency resolution proceedings (CIRP) may be initiated against the corporate debtor and attempts are made to revive the corporate debtor by inviting resolution plans. If the revival process fails, the corporate debtor must be liquidated.
In a recent order passed by the National Company Law Appellate Tribunal, Principal Bench, New Delhi (“NCLAT”) in Somesh Choudhary v Knight Riders Sports Private Limited & Anr. under Company Appeal (AT) Insolvency No.
A. INTRODUCTION
Introduction