When the Corporate Debtor defaults in making payments to its creditors the process of Corporate Insolvency Resolution Process (CIRP) can be initiated against it by its creditors. The Insolvency and Bankruptcy Code, 2016 (hereafter “the Code”) provides the process for insolvency resolution process (IRP). For this purpose the government also enacted the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and  Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereafter “the Rules”).

State Bank of India v. M/s. Metenere Limited^[1]

In a recent case, the National Company Law Appellate Tribunal ("NCLAT"), vide its ruling dated May 22, 2020 upheld the order passed by respective National Company Law Tribunal ("NCLT") dated January 4, 2020 with respect to substitution of appointment of an ex-employee of the Financial Creditor as the Interim Resolution Professional (IRP).

Factual Background