Recently, the Hon'ble High Court of Delhi (“High Court”) caused yet another bend in the meandering interplay between the Insolvency and Bankruptcy Code, 2016 (“IBC”) and the Prevention of Money Laundering Act, 2002 (“PMLA”). The High Court held that a moratorium imposed under Section 14 of the IBC (“Section 14”) will not preclude the Enforcement Directorate (“ED”) from attaching properties under Sections 5 and 8 of the PMLA.

FACTS

Introduction

This monthly legal roundup is a compilation of our thought leadership articles and primers published in the month of December 2022 on key legal and regulatory topics. Please click on the access links to read more.

A. INSOLVENCY LAWS

1. Leasehold right: An intangible asset

The Insolvency and Bankruptcy Code, 2016 (Code) was introduced as a one stop solution for resolving insolvencies, which previously was a long-drawn process that did not offer an economically viable arrangement. In Swiss Ribbons Pvt. Ltd. v.

December, 2022 For Private Circulation - Educational & Informational Purpose Only Between the lines... A BRIEFING ON LEGAL MATTERS OF CURRENT INTEREST KEY HIGHLIGHTS ⁎ NCLAT: Adjudicating authority has no jurisdiction to evaluate the decision of the committee of creditors to enquire into the justness of the rejection of a resolution plan. ⁎ NCLAT: Advance paid towards service is operational debt. ⁎ NCLAT: Provident fund dues are not assets of the Corporate Debtor; they have to be paid in full. ⁎ CCI: Google’s Play Store Payment Policies are anticompetitive and discriminatory.

The Hon’ble Delhi High Court (“Delhi HC”) in Insolvency and Bankruptcy Board of India vs State Bank of India & Ors. has held that the National Company Law Tribunal (“NCLT”) cannot assume to itself the power of declaring any provision of the Insolvency and Bankruptcy Code, 2016 (“IBC”) or the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) as illegal or ultra vires.

By recognising the state government as a secured creditor, the Rainbow Papers judgment exposes the Insolvency and Bankruptcy Code to incongruous uncertainty

Introduction

In a recent decision, the Delhi High Court ("Delhi HC”) has stayed 2 (two) summary suits against a personal guarantor on the ground that interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016 ("IBC”) arising out of another creditor’s IBC proceedings has the effect of staying all pending legal proceedings in respect of ‘all of the debts’ of the particular guarantor.

Brief Facts

In the recent decision of Base Realtors Private Limited v. Grand Realcon Private Limited, the National Company Law Appellate Tribunal, New Delhi (“NCLAT”) has upheld the maintainability of an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) relating to the component of interest due and payable, without asking for the principal amount which has not yet become due and payable.

Brief Facts