On October 4, 2023, a 2 (two) judge bench of the Hon’ble Supreme Court of India (“Supreme Court”) in the case of Union Bank of India v. Rajat Infrastructure Pvt. Ltd and Sunview Assets Pvt Ltd. held that the powers of the Supreme Court under Article 142 of the Constitution of India, 1950 ("Constitution”), being inherent in nature, are complementary to those powers which are specifically conferred by statute.

Brief Facts

The National Company Law Tribunal, Kolkata Bench (“NCLT”), in EPC Constructions India Limited through its Liquidator – Abhijit Guhathkurtha v. M/s Matix Fertilizer and Chemicals Limited has ruled that preference shareholders cannot step into the shoes of a financial creditor unless their preference shares become redeemable.

Brief Facts

Rainbow Papers: The Judgment

In State Tax Officer (1) v. Rainbow Papers Ltd., 2022 SCC OnLine SC 1162 ("Rainbow Papers"), the Supreme Court dealt with the question as to whether the provisions of the Insolvency and Bankruptcy Code, 2016, ("IBC") (specifically Section 53) overrides Section 48 of the Gujarat Value Added Tax Act, 2003 ("GVAT Act").

Section 48 of the GVAT Act provides as follows.

Section 48. Tax to be first charge on property:

The changes corresponding to the proposals are suggested in the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and the IBBI (Liquidation Process) Regulations, 2016. The draft regulations have been annexed to the proposals.

Comments on the proposals and the draft regulations have been sought by November 28, 2023.

The Board’s proposals are as follows: –

• Registration of corporate debtor’s real estate projects under RERA

In a recent decision in the case of Infrastructure Leasing and Financial Services Ltd. v. HDFC Bank Ltd. and Another, the Supreme Court of India (“Supreme Court”) has held that the rents receivable by a borrower which was assigned to a lender of a lease rental discounting facility would not be treated as an asset of the borrower, and thus fall outside the purview of the asset and security freeze order of the National Company Law Appellate Tribunal (“NCLAT”).

Brief Facts

On 31 October, 2023, in Sanjay Kumar Agarwal v State Tax Officer 1, 2023 SCC OnLine SC 1406, the Supreme Court of India (SC) in the exercise of its powers of review under Article 137 of the Constitution of India, (Rainbow Review) affirmed the view expressed by another bench of the SC in State Tax Officer (I) v. Rainbow Papers Limited 2022 SCC OnLine SC 1162 (Rainbow Judgment) that may have far reaching effects on the treatment of dues to the Government or governmental authorities in insolvency resolution proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC).

In an application filed by Vishram Narayan Panchpor, resolution professional of Blue Frog Media Private Limited (“Corporate Debtor”) in the matter of M/s Blue Frog Media Private Limited¹ for approval of a resolution plan, the Mumbai bench of the National Company Law Tribunal (“NCLT Mumbai”) ruled that the object of Section 29A of the Insolvency and Bankruptcy Code, 2016 (“IBC”) requires a resolution professional to conduct adequate due diligence on a prospective resolution applicant and its related parti

The Supreme Court has held that the ‘doctrine of election’, stemming out of the law of evidence that bars prosecution of the same right in two different fora based on the same cause of action, cannot be applied to prevent a financial creditor from approaching the adjudicating authority for initiation of Corporate Insolvency Resolution Process against a corporate debtor.

While the Insolvency and Bankruptcy Code, 2016 (“IBC”) provides for insolvency resolution and liquidation of ‘corporate persons’, it excludes ‘financial service provider’ (“FSP(s)”) from the said provision.

The National Company Law Appellate Tribunal (New Delhi Bench) (“NCLAT”) in two recent judgments passed in Raiyan Hotels and Resorts Pvt. Ltd. vs. Unrivalled Projects Pvt. Ltd. [Company Appeal (AT) (Insolvency) No. 1071 of 2023] and Aryan Mining & Trading Corpn Pvt. Ltd. vs Kail limited and Anr. [Company Appeal (AT) (Insolvency) No.