On February 21, 2024, the Hon’ble National Company Law Appellate Tribunal, Chennai (“NCLAT”) in the case of Kiran Martin Gulla RP of Vardharaja Foods Pvt. Ltd. held that when an extension to complete the corporate insolvency resolution process (“CIRP”) is granted by the Adjudicating Authority, then such period will be calculated form the date on which the Adjudicating Authority passes such an order.

Brief Facts

The Insolvency and Bankruptcy Board of India (IBBI) has come out with certain measures pertaining to the professional services rendered and availed byinsolvency professionals (IPs), and the framework for insolvency professional entities (IPEs).[1]

The Insolvency and Bankruptcy Board of India (IBBI), vide notifications dated February 12, 2024, and February 15, 2024, amended the IBBI (Liquidation Process) Regulations, 2016,[1] and the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016,[2] respectively, in order to streaml

Introduction

With the objective of facilitating a smoother process for liquidation, ensuring accountability, and bolstering the confidence of stakeholders in the liquidation process, the Insolvency and Bankruptcy Board of India (IBBI) has introduced changes in the liquidation process. The same was implemented through the IBBI (Liquidation Process) (Amendment) Regulations, 2024, which were notified on February 12, 2024.

The Insolvency and Bankruptcy Code, 2016 (“IBC”) is silent on the treatment of a disputed or contingent claim, which is pending adjudication before a judicial or quasi-judicial body, giving rise to a contentious issue. The decision of the Hon’ble Supreme Court in Committee of Creditors of Essar Steel Limited v.

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

The changes proposed seek to address the existing issues and safeguard the interests of stakeholders. The comments on the proposals and the draft regulations may be shared by November 10, 2023.

The sixteen proposals put forward by the Board are as follows: –

• No verification of prospective bidders

On September 18, 2023, the Insolvency and Bankruptcy Board of India (“IBBI”) notified the IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023 (“CIRP Amendment Regulations”) amending the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) under the Insolvency & Bankruptcy Code, 2016 (“IBC”).

In a nutshell, the CIRP Amendment Regulations: