The Hon’ble National Company Law Appellate Tribunal (‘NCLAT’) in its order in Standard Chartered Bank v. Satish Kumar Gupta, R.P. of Essar Steel Limited & Ors. has dealt with various important legal issues in relation to the corporate insolvency resolution process (‘CIRP’). Some of the key aspects of this judgment have been summarised below:
1. Validity of Guarantee
I. NCLAT approves the resolution plan submitted by ArcelorMittal in the resolution proceedings in respect of Essar Steel India Limited while modifying the distribution of money to the financial and the operational creditors
The Insolvency and Bankruptcy Code, 2016 (IBC) has been widely considered a landmark legislation that has brought about a paradigm shift in the recovery and resolution process.
However, during the implementation of the IBC over the past two years and eight months, several challenges have emerged, including:
Introduction
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].
In recent times, there have been multiple instances of delay in completion of the corporate insolvency resolution process (“CIRP”) as per the timelines prescribed under the Insolvency and Bankruptcy Code, 2016 (“Code”). This is primarily due to the filing of multiple legal proceedings by stakeholders, and their long continuing pendency.
The Hon’ble National Company Law Appellate Tribunal (‘NCLAT’), has recently in its suigeneris judgment in UI Pulp and Paper Industries Pvt. Ltd. vs. M/s Roxcel Trading GMBH Company Appeal (AT) (Insolvency) No. 664 of 2019 (‘Roxcel Trading’), affirmed the view of the National Company Law Appellate Tribunal, wherein, it had imposed ‘moratorium’ on the Corporate Debtor even before initiation of corporate insolvency resolution process.
Analysis of the Judgement- Imposition of Pre IBC ‘Moratorium’
In State Bank of India v Moser Baer Karamchari Union [Company Appeal (AT) (Insolvency) Number 396 of 2019] (Moser Baer), the National Company Law Appellate Tribunal, New Delhi (NCLAT), ruled on the scope of ‘workmen’s dues’ under Section 53 of the Insolvency and Bankruptcy Code, 2016 (IBC) from the perspective of the dues of an employer towards provident fund, pension fund and gratuity. Background |
Corel Corporation vs. Mahabali Innovative Technologies Private Limited, CS (COMM) 711/2016
A suit was instituted for permanent injunction, against the Defendant to restrain the Defendant from infringing the copyright of the Plaintiff in various software programmes of the Plaintiff including the Corel DVD MovieFactory 7 software and for ancillary reliefs.
The Reserve Bank of India (RBI) issued a revised prudential framework for resolution of stressed assets on 7 June 2019 (Revised Circular) in supersession of the erstwhile circular on Resolution of Stressed Assets dated 12 February 2018 (Feb 12 Circular) which was struck down by the Hon’ble Supreme Court on 2 April 2019.