INTRODUCTION 

The Supreme Court has recently in its judgment dated 21 January 2020, in the case of Standard Chartered Bank v MSTC Limited [SLP (C) No 20093 of 2019], provided clarity on the interplay between the provisions of Recovery of Debts and Bankruptcy Act 1993 (RDB Act) and Limitation Act 1963 (Limitation Act). Supreme Court has in doing so refused to condone a delay of 28 days in filing of a review application by the government borrower entity against a decree in favour of the bank.  

BRIEF BACKGROUND: 

INTRODUCTION  

With the much awaited-judgment in the Insolvency and Bankruptcy regime; the Supreme Court of India (hereinafter “SC” or “apex court”) cleared off the long-standing confusions encompassing the Insolvency and Bankruptcy Code, 2016 (hereinafter the “Code” or “IBC”) with its landmark in Committee of Creditors of Essar Steel Ltd. v. Satish Kumar Gupta & Orsi on November 15, 2019.  

In order to protect the Corporate Debtor and its assets from liabilities for offences committed prior to the commencement of Corporate Insolvency Resolution Process (CIRP), the President of India has on 28th of December 2019 promulgated an Ordinance – Insolvency and Bankruptcy (Amendment) Ordinance, 2019.

At the end of December, the Indian government promulgated the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019 (the “Ordinance”) to iron out certain issues faced by buyers of assets in a corporate insolvency resolution process (the “CIRP”).

While the Insolvency and Bankruptcy Code, 2016 (the “Code”) has largely achieved its objectives, certain aspects of the Code have caused bottlenecks in the CIRP, which has, inter alia, deterred last-mile funding to distressed corporate debtors.

In a big move to strengthen norms for the Insolvency Resolution Professionals (IRP‘s), the governing body for the Insolvency Professionals, the ‘Insolvency and Bankruptcy Board of India (herein referred to as ‘the Board’) has notified amendments to the (i) the Insolvency and Bankruptcy Board of India (Insolvency Professional) Regulations, 2016 and (ii) the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016.

The terms of the transaction documents for mergers and acquisitions are often dictated by the economics of investment and the bargaining position of the parties. The terms so contractually agreed upon must, however, always be within the operative legal framework. Liquidation Preference (“LP”) is a tool often used to embolden investors seeking security of their investment. LP is crucial, especially where the investors anticipate exit at a value lower than their initial investment.

The National Company Law Appellate Tribunal (“NCLAT”) vide its order dated 23.09.2019 passed in the matter ofVinayaka Exports and another Vs. M/s. Colorhome Developers Pvt. Ltd., overturned the decision of the National Company Law Tribunal, Chennai Bench (“NCLT”) dismissing an application filed by two financial creditors under Insolvency and Bankruptcy Code (“Code”) owing to the pendency of a civil suit and pre-existing dispute between the parties.

FACTS:

The enactment of the Insolvency and Bankruptcy Code, 2016 (IBC) has been often cited as one of the key economic reform of the present government . Undoubtedly the new enactment resulted in large corporate entities queuing up to acquire distressed companies and their assets, put on block following initiation of IBC proceedings, thereby infusing efficiencies in the economy due to likely revivals of such companies .

INTRODUCTION 

Background