Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as “IBC”) has been introduced by the Government of India in 2016, as an Act to consolidate and amend the laws relating to reorganization and insolvency resolution in a time-bound manner for maximization of value of assets, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders. The Supreme Court has elaborately discussed the scope and applicability of the IBC[1].
Introduction:
The Insolvency and Bankruptcy Board of India amended regulations regarding Corporate Insolvency Resolution Process wherein it has stated that the resolution plans with respect to Section 30 and Section 31 of the Insolvency and Bankruptcy Code, 2016, will be required to contain details of the resolution applicant as well as the connected Persons.
The Financial Resolution and Deposit Insurance Bill 2017 – which was referred to a joint committee of both houses of Parliament in early October 2017 – has recently attracted significant attention. This is mainly due to the objections raised by the Insurance Regulatory and Development Authority of India (IRDAI), among other parties.
Background
The partly liberalized Indian economy has been aptly referred to in the Economic Survey of India 2015-16 as one that had transitioned from ‘socialism with limited entry to “marketism” without exit.
Given the vexed ‘twin balance sheet’ problem chafing both banks and corporates in India, the Insolvency and Bankruptcy Code, 2016 (IBC/Code) was a critical structural reform. Many issues have surfaced since the Code was operationalised and the courts and the Central Government have stepped in to iron out such issues in the last one year.
Introduction
The Insolvency and Bankruptcy Board of India (hereinafter referred to as the “IBBI”) has constituted the Insolvency law Committee vide notification no. 35/14/2017 dated November 16, 2017 (hereinafter referred to as the “Committee”).
In order to protect honest creditors against the unscrupulous debtors who are using insolvency as a shield to evade of their liabilities, the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”) was incorporated. The IBC works in pursuit of insolvency resolution process in a time-bound manner for maximization of value of assets which promotes entrepreneurship, availability of credit and balance the interests of all the stakeholders.
Introduction –
The Delhi High Court in the case of Power Grid Corporation of India Ltd. vs Jyoti Structures Ltd.[1], vide its order dated December 11, 2017, ruled that Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as the ‘IBC’) would not apply to proceedings which are beneficial to the corporate debtor.
Legal provision –
Introduction:
The objective of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ’Code’) is multi-faceted. Not only does it seek to promote entrepreneurship, by making availability of credit more transparent, but it also balances the interests of all stakeholders by consolidating and amending the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals, in a time bound manner and for maximization of the value assets of such persons and other related matters.
Introduction
Recently, in Neelkanth Township and Construction Pvt. Ltd. v.Urban Infrastructure Trustees Ltd, Company Appeal (AT) (Insolvency) No. 44 of 2017 (Neelkanth Township), the National Company Law Appellate Tribunal (NCLAT) addressed several issues with regard to the Insolvency and Bankruptcy Code, 2016 (IBC).