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).
Owing to the dynamic nature and demand of the business, the entities require to constantly modify their business model. Corporate restructuring is an instrument to effectively implement the strategies devised by changing the business model, management team or financial structure of the corporations. Growth of these corporations is either through organic means (through internal means like financial restructuring) or inorganic means in order to obtain accelerated growth (through external sources like mergers, acquisition).
Need for Merger
The efficacious implementation of the comprehensive and systematic Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as “IBC”) has instilled confidence in the creditors being a comprehensive, systemic and speedy reform thereby paving way for development and progress. The latest revision in the IBC by the Insolvency and Bankruptcy Board of India (hereinafter referred to as “IBBI”) has further tightened the reins over the dishonest and fraudulent debtors by implementation of stricter policies controlling their conduct.
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.
Debt recovery in India has been a challenge with creditors and debtors disputing rights and obligations in legal wrangles under various provisions under applicable laws making the process time consuming and costly.
Written by Ashmi Mohan at Clasis Law
In its recent judgment of Kirusa Software Private Ltd. vs. Mobilox Innovations Private Ltd. Company Appeal (AT) (Insolvency) 6 of 2017, the National Company Law Appellate Tribunal of India (“Appellate Tribunal”) has adjudicated upon the issue as to what does “dispute” and “existence of dispute” mean for the purpose of determination of a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“Code”).
Introduction |