Recently, by a judgment dated 30 May 2022, a three-judge bench of the Supreme Courtin the case of Kotak Mahindra Bank Limited versus A. Balakrishnan & Anr (Judgment dated 30 May 2022 in Civil Appeal No. 689 of 2021) held that a recovery certificate issued the Recovery of Debts and Bankruptcy Act, 1992 (RDB Act) would qualify as a “financial debt” under the Insolvency and Bankruptcy Code, 2016 (IBC), and give rise to a fresh cause of action under section 7 of the IBC.

The National Company Law Appellate Tribunal (NCLAT) vide its order dated 3 January 2022 in Jayanthi Ravi v Chemizol Additives Pvt Ltd ruled that the advance extended by a director to the company which is recorded as a loan in the minutes of the meeting of the board of directors would be classified as financial debt under the Insolvency and Bankruptcy Code, 2016 (IBC).

The National Company Law Appellate Tribunal, New Delhi (NCLAT) on 7 November 2017 passed a judgment in the case of M/s Speculum Plast Private Limited v. PTC Techno Private Limited, putting to rest the question of the applicability of the Limitation Act, 1963 (Limitation Act) to the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 (IBC). The present judgment comes in the wake of the decision of the NCLAT in Neelkanth Township and Construction Pvt. Ltd.