Supreme Court: Interest free term loans advanced to a corporate person are not excluded from the purview of a financial debt under Section 5(8) of the Insolvency and Bankruptcy Code, 2016. II. Bombay High Court: A secured debt shall take priority over the ‘Government’ dues/tax dues under the SARFAESI Act. III. NCLAT: Rejects application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 on grounds of collusion between the corporate debtor and the financial creditor. IV.
INTRODUCTION
今回のニュースレターでは、2021 年 7月の破産倒産法関連の主なアップデートについて取り扱っていま す。最高裁判所（＝SC）、会社法上訴審判所（＝NCLAT）、会社法審判所（＝NCLT）の各裁判所におい て下された重要な判決についてまとめました。
1) DEMAND NOTICE ISSUED BY OPERATIONAL CREDITOR BASED ON INVOICES CAN BE ISSUED IN FORM-3 INSTEAD OF FORM-4.
Matter: Tudor India Pvt. Ltd. v. Servotech Power Systems Ltd.
Order dated: 02 July 2021.
Summary:
This newsletter covers key updates about developments in the Insolvency Law during the month of July 2021.
We have summarized the key judgments passed by the Supreme Court of India (SC), National Company Law Appellate Tribunal (NCLAT) and the National Company Law Tribunals (NCLT). Please see below the summary of the relevant regulatory developments.
1) DEMAND NOTICE ISSUED BY OPERATIONAL CREDITOR BASED ON INVOICES CAN BE ISSUED IN FORM-3 INSTEAD OF FORM-4.
Facts
INTRODUCTION:
The Supreme Court of India (SC) in Orator Marketing Private Limited v Samtex Desinz Private Limited, Civil Appeal No. 2231 of 2021, judgment dated 26th July 2021 has held that an interest free term loan constitutes a financial debt under the Insolvency and Bankruptcy Code, 2016 (IBC).
The IBC provides that a financial debt is “a debt along with interest, if any, which is disbursed against the consideration for the time value of money” furthered by an inclusive list of examples that may be considered as a financial debt.
The Upper House of Parliament in India, being the Rajya Sabha passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2021 (“Amendment”) on 3rd August 2021 which introduces a Pre-Packaged Insolvency Resolution Process (“PIRP”) within the scheme of the Insolvency and Bankruptcy Code, 2016 (“Code”). The Amendment had already cleared the Lower House of Parliament, the Lok Sabha on 28th July 2021. The Amendment replaces the Ordinance passed by the President of India on 4th April 2021.
The Insolvency & Bankruptcy Code, 2017 (‘Code’) was,inter alia, enacted for the resolution or liquidation of companies defaulting on their debts. These debts may include claims subject to an arbitration or sums determined in the form of an award. In the present article, we identify some potential scenarios where parties to an arbitration agreement must be conscious of the interplay between arbitration and the Code.
1.Initiating Insolvency Proceedings for contractual defaults
In 2016, the Insolvency and Bankruptcy Code (“IBC”) was enacted with the objective to bring the insolvency law in India under a single unified umbrella and to ensure speedy resolution of an entity (“Corporate Debtor”) which has defaulted in payment to its creditors (including the statutory authorities). Under the IBC, the Corporate Debtor is required to undergo a Corporate Insolvency Resolution Process (“CIRP”).
INTRODUCTION
This newsletter covers key updates about developments in Insolvency Law during the month of June 2021.
We have summarized the key judgments passed by the National Company Law Appellate Tribunal (“NCLAT”) and the National Company Law Tribunals (“NCLT”). Please see below the summary of the relevant regulatory developments.
1) INELIGIBILITY TO SUBMIT RESOLUTION PLAN UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (“CODE”) IS APPLICABLE AT THE TIME WHEN THE RESOLUTION PLAN IS SUBMITTED BY THE RESOLUTION APPLICANT.