Brief Facts
The Department of Telecommunications is seeking to overhaul the law governing the provision of telecommunication services through the Draft Telecommunication Bill, 2022. The Bill also seeks to govern the provision of telecom services and, or, availability of network during insolvency proceedings in respect of a telecom licensee or assignee. While the DoT’s rationale for this is understandable, the proposed provisions may conflict with the Insolvency and Bankruptcy Code, 2016.
This article examines the NCLT and NCLAT’s power to exercise contempt jurisdiction under the Insolvency and Bankruptcy Code, 2016, and the inconsistent approach taken by different benches.
Although the Insolvency and Bankruptcy Code, 2016 (Code) was initially hailed as a welcome reform that would enable timebound and effective insolvency resolution, its tenure has been fraught with issues and uncertainty. One of the issues that remains open is the power to punish for contempt under the Code.
The Insolvency and Bankruptcy Code, 2016 was enacted, amongst others, to facilitate timely insolvency resolution. While the Supreme Court has always upheld the sanctity of timelines under the Code for corporate insolvency resolution, it has held the prescribed timelines for actions prior to the commencement of the corporate insolvency process as merely directory. This article explores the impact of such decisions on the proceedings under the Code which already suffer from inordinate delays.
The Department of Telecommunications (DoT) has on 21 September 2022 released the Indian Telecommunication Bill, 2022 (Bill) which consolidates and amends the Indian Telegraph Act 1885, Indian Wireless Telegraphy Act 1933, and The Telegraph Wires, (Unlawful Protection) Act 1950. In Chapter 5 (Restructuring, Defaults in Payment and Insolvency), the Bill addresses situations wherein payment defaults or insolvency proceedings have been initiated against a telecommunication company (Telco or Corporate Debtor).
The Insolvency and Bankruptcy Code, 2016 was enacted to facilitate insolvency resolution in a timebound manner, and maximise value realisation for stakeholders. Although it has been amended 6 times since its notification, issues remain. As the Legislature appears set to amend the Code once again, this article examines stakeholders’ issues and explores the issues the amendments may address.
Introduction
The Insolvency and Bankruptcy Board of India (IBBI) on 16 September 2022 promulgated the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2022 (CIRP Amendment Regulations) amending the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations).
The key amendments introduced by the CIRP Amendment Regulations are as follows:
Introduction
In a recent order passed by the National Company Law Appellate Tribunal, Principal Bench, New Delhi (“NCLAT”) in Somesh Choudhary v Knight Riders Sports Private Limited & Anr. under Company Appeal (AT) Insolvency No.