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

Recently, in K. Kishan v. Vijay Nirman Company Pvt. Ltd. [See endnote. 1] the Supreme Court had an occasion to decide whether the provisions of the Insolvency and Bankruptcy Code, 2016 (‘IBC’) can be invoked in respect of an Operational Debt where an Arbitral Award has been passed in favour of the Operational Creditor in respect of such Operational Debt, but, the objections against the said Arbitral Award are pending under Section 34 of the Arbitration & Conciliation Act, 1996 (‘A&C Act’).

In order to tackle the problem of unscrupulous debtors escaping and delaying the repayment of debts, the Government of India brought forth the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the 'IBC'). Not only does it seek to promote the availability of credit in a more transparent and systematic manner, but, it also balances the interests of all stakeholders by making the legal framework stronger in terms of reorganization and insolvency resolution of corporate persons, insolvent entity in a time bound manner and for maximization of the value assets.

MUMBAI          SILICON VALLEY          BANGALORE          SINGAPORE          MUMBAI BKC          NEW DELHI           MUNICH           NEW YORK

Deal Destination 

Market for Stressed Assets: Truly

‘Stressed’ or Disguised ‘Desserts’ Spelt

Backwards?

August 2018

© Copyright 2018 Nishith Desai Associates

Supreme Court has held that:

The Supreme Court in its recent decision in K Kishan v M/s Vijay Nirman Company Private Limited, Civil Appeal No 21825 of 2017, has put to rest the question of whether an arbitral award that has been challenged under Section 34 of the Arbitration and Conciliation Act, 1996 (Act) by the award debtor can form the basis for an action under Section 9 of the Insolvency and Bankruptcy Code, 2016 (Code).

The enforcement of the Insolvency and Bankruptcy Code (hereinafter referred to as “IBC”) has reinforced the resolution of insolvency in a time bound manner and for maximization of the value assets. In furtherance of a more organized resolution process, the Insolvency and Bankruptcy Board (hereinafter referred to as “IBBI”) brought forth the Insolvency Resolution Process for Corporate Persons Regulations, 2016 (hereinafter referred to as the “Regulations”).

Committee of Creditors

The company being an independent legal entity is recognized for distinguished identity. The specialized corporate structure is monitored under the provisions of the Companies Act, 2013 (hereinafter referred to as the “Act”).

National Company Law Tribunal