Introduction

The division bench of the Supreme Court of India (Supreme Court) comprising of Hon’ble Justice Mr R.F. Nariman and Hon’ble Justice Mr Vineet Saran, in its judgment dated 30 April 2019 in J.K. Jute Mill Mazdoor Morcha v Juggilal Kamlapat Jute Mills Company Ltd & Ors has held that a trade union  is an operational creditor for the purpose of initiating the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC).

Brief Facts

It is now a settled position that the prime objective of the Insolvency and Bankruptcy Code, 2016 (“IBCâ€) is resolution or revival of the Corporate Debtor; followed by maximising the value of the assets of the Corporate Debtor; and lastly to promote entrepreneurship and availability of credit. The proceedings under the IBC are not intended to substitute recovery proceedings.

The Reserve Bank of India (“RBI”) has issued the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 (“New Framework”) on June 07, 2019[1] in which the RBI has continued the core principles of its circular dated February 12, 2018 (“February 12 Circular”) and has added provisions encouraging both informal and formal restructuring in India.

The Insolvency and Bankruptcy Code 2016 (the ‘Code’) provides the creditors with a comprehensive solution for recovery of dues from willful defaulters. While this legislation has been facing teething issues and inconsistencies from its inception, the proactive approach of the government in amending this liquidation law from time to time has led to its significant implementation.

Supreme Court has upheld constitutional validity of various provisions of Insolvency and Bankruptcy Code, 2016. It noted that the Code is a beneficial legislation which puts corporate debtor back on its feet, not being a mere recovery legislation for creditors.

Observing that there is no liquidation, even in the preamble, the court noted that the Code is first and foremost, a Code for reorganization and insolvency resolution of corporate debtors. Unless such reorganization is effected in a time-bound manner, the value of the assets of such persons will deplete.

In Forech India Ltd. v. Edelweiss Assets Reconstruction Co. Ltd., the Supreme Court has held that an Insolvency Petition may be filed against a corporate debtor irrespective of the pendency of a winding-up petition before a High Court

Revision of ECB framework: The Reserve Bank of India (RBI) on December 17, 2018 revised and consolidated the provisions related to borrowing and lending transactions into one single regulation i.e. the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 ("ECB Regulations").       

On 11 February 2019, the Supreme Court dismissed the Civil Appeal bearing No...

Banning of Unregulated Deposits Schemes Ordinance, 2019 By Sudish Sharma and Vishakha Singh

Indian economy in the recent times has witnessed a plethora of fraudulent corporate malpractices. The issue of illegal deposit-taking activities has been a concerning one, causing various financial frauds in forms of 'ponzi' schemes, 'chit funds' scams etc. There has been

a dire need to counter such illicit practices, and to

initiate another deterrent action against the black

money generated out of such illicit-deposit taking

Introduction: