1. Introduction     

The longstanding debate surrounding the prioritization of crown debts vis-à-vis private debts has entered a new chapter with the advent of the Insolvency and Bankruptcy Code, 2016 (“IBC”). Prior to the IBC, the common law principle generally granted crown debts preferential status over unsecured debts. This historical primacy stemmed from the sovereign's role as the embodiment of the public good, requiring unimpeded revenue collection for the smooth functioning of the State.

Introduction

Barely six years since the enactment of the Insolvency and Bankruptcy Code, 2016 (“Code”), the Code has already undergone various amendments from to time, to aid its broad objective of time bound insolvency resolution, maximisation of value of assets of corporate debtors and balancing the interests of all stakeholders. Besides the amendments, judicial pronouncements have also played an instrumental role in shaping the Code in its present form.  

The extant regulatory framework for Asset Reconstruction Companies (“ARCs”) has been amended by the Reserve Bank of India (“RBI”), vide its notification titled ‘Review of Regulatory Framework for Asset Reconstruction Companies (ARCs)’ dated 11^th October 2022 (“Framework”).

Key Changes:

Some of the key changes brought about by the Framework are as follows:

The pre-existing dispute which may be ground to thwart an application under Section 9 of the I&B Code, 2016 (“Code”)has to be a real dispute, a conflict or controversy. Such conflict of claims or rights should be apparent from the reply to Demand Notice as contemplated by Section 8(2) of the Code. Essentially meaning that the Corporate Debtor is not to raise bogie of disputes but there has to be a real substantial dispute.

The Reserve Bank of India (“RBI”) has, in its capacity as the regulator of non-banking financial companies and under the powers conferred to it pursuant to Section 45-IE (1) of the Reserve Bank of India Act, 1934 (“RBI Act”), superseded the Board of Directors of RCAP (“Board”).

The press release of even date from the RBI also stipulates the following:

The Hon’ble Supreme Court of India (“SC”) has held that National Company Law Tribunal (“NCLT”) cannot exercise its residuary jurisdiction under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 (“IBC”) to adjudicate upon the contractual dispute between the parties.

The Reserve Bank of India (“RBI”) has, in its capacity as the regulator of non-banking financial companies and under the powers conferred to it pursuant to Section 45-IE (1) of the Reserve Bank of India Act, 1934 (“RBI Act”), superseded the Board of Directors of SIFL and SEFL.

The press release of even date from the RBI also stipulates the following:

1) The step has been taken owing to governance concerns and defaults by SIFL and SEFL in meeting their various payment obligations.

2020年の初めに新型コロナウイルス感染症（COVID-19）パンデミックが広がり始めてから、その拡散を抑えるために全米の州知事が事業の閉鎖を命じる行政命令を出しました。多くの事業主が、事業閉鎖期間の賃料の支払義務から逃れるための救済手段を探ろうとして賃貸借契約書、特にその不可抗力(force majeure)条項を調べました。事業体やその弁護士は、今まで経験したことのない性質のパンデミックと相次ぐ事業閉鎖を目の当たりにしていますが、そのような重要事項の指針となる判例はわずかしかありませんでした。しかし、イリノイ州J.B.プリツカー知事がCOVID-19危機の対応策として、レストランに対して同施設で食事をする客に料理を出す(on-premises consumption)ことを禁じる行政命令を出した結果1、 Hitz Restaurant Group事件において、イリノイ州北部地区連邦破産裁判所は、近時、賃貸借契約書に含まれる不可抗力条項に基づき、テナント（賃借人）‐債務者の賃料支払義務は一部免除されると判示しました。

概要

Executive Summary