In 2016, the insolvency and bankruptcy landscape in India was radically overhauled by the introduction of the new Insolvency and Bankruptcy Code (IBC). In addition to consolidating the complex set of existing laws and regulations on insolvency and bankruptcy into a single law, the IBC introduced time bound and creditor driven resolution process for distressed companies overseen by the newly formed National Company Law Tribunal (NCLT).

Virtual Currency: State of pandemonium continues

The business entities in India are confronted by changing circumstances attributable to variation in the governmental policies and ever-growing competition requiring them to opt for corporate restructuring to maximize their profitability. In furtherance to fulfilment of the said purpose two or more enterprises may come together sharing their liabilities, responsibilities, assets and trade objectives.

Merger… A corporate restructuring

Leasing of aircrafts is a prevalent market practice in the aviation industry, and all existing airline operators in India have currently leased a significant number of aircrafts in their fleet. In fact, a sizeable debt in the books of these operators is in connection with such leasehold arrangements.

India is increasingly becoming one of favoured business destinations on the international scale. This is attributable to a number of factors including the schemes and policies introduced by the Government from time to time. One of the major reasons for the improvement of the country’s position in the parameter of ‘Ease of Doing Business’ is the development of an efficient insolvency and bankruptcy resolution mechanism.

Insolvency and Bankruptcy Resolution

The NCLAT has held that without initiating Corporate Insolvency Resolution Process (CIRP) against the principal borrower, financial creditor can initiate CIRP against the Corporate Guarantors.

It noted that as per IBC Section 5(8)(h), counter-indemnity obligation in respect of a guarantee comes within the meaning of a ‘financial debt’.

Prime Minister Narendra Modi, elected in May 2014, will turn the corner again in May 2019 as he completes his first five year term. We visit some of the recent developments in his government’s legal and tax policies that have potentially mended a broken administrative process from the previous administration.

In the market of changing scenarios, the companies are faced by numerous challenges on the business front. At times they may be confronted with such financial crisis that it is no longer practical to continue the business operations and deal with the mounting losses. In such situations, the companies may be referred for insolvency resolution.

Guiding light

Relying on Report of Insolvency Law Committee, Supreme Court of India has held that insertion of Section 238A in the Insolvency and Bankruptcy Code (IBC) is retrospective.

Setting aside the NCLAT Order, the court in its judgement dated 11-10-2018 held that Limitation Act, 1963 will apply to the applications made under Section 7 and/or Section 9 of the IBC on and from its commencement on 1-12-2016 till 6-6-2018 when the provisions of applicability of Limitation Act were incorporated.

Supreme Court ruling in ArcelorMittal case — An analysis

By Mitali Daryani

The Supreme Court on 4-10-2018 allowed yet another opportunity to mining major ArcelorMittal and Russia's VT B Capital-backed NuMetal to bid for Essar Steel provided they clear their Non-Performing Asset (NPA) dues in two weeks. The bench comprising Justice R. F. Nariman and Justice Indu Malhotra, has also taken this opportunity to interpret and clarify Section 29A of the Insolvency and Bankruptcy Code, 2016. However, the Essar saga is far from over.