The Supreme Court (“SC”) in the case of M. K. Rajagopalan v. Dr. Periasamy Palani Gounder & Anr., has held that, while commercial wisdom of the Committee of Creditors (“CoC”) must be respected, certain factors having a material bearing on the process of approval of the resolution plan should also be borne in mind.

The Supreme Court of India, in its recent judgment passed in the case of M. Suresh Kumar Reddy v Canara Bank and Ors., has held that the existence of a financial debt and proof of default on the part of Corporate Debtor are the only factors to be considered by the Adjudicating Authority to admit an Application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“Code”).

May, 2023 For Private Circulation - Educational & Informational Purpose Only A BRIEFING ON LEGAL MATTERS OF CURRENT INTEREST KEY HIGHLIGHTS * Supreme Court: Directors cannot escape penal liability in cheque dishonoring cases by citing company's dissolution. ⁎ Bombay High Court: A share purchase agreement containing option to sell the shares does not amount to derivative contract, thereby does not violate provisions of SCRA. * NCLAT: Fraud for the purpose of Section 66 of the IBC includes a debt where the debtor has no intention to repay.

The original version of this article was first published in the Trilegal Quarterly Roundup.

These FAQs delve into some key aspects that prospective resolution applicants must consider while devising a robust resolution plan for a corporate debtor.​

Introduction

Recently, the Supreme Court, in the case of Gaurav Agarwal vs CA Devang P. Sampat, has issued notice to the parties for adjudicating the crucial question of law pertaining to the ‘Period of Limitation’ for preferring an appeal under Section 61 of Insolvency and Bankruptcy Code, 2016 (“theCode”).

While the inclusion of interest amounts in ‘financial debt’, for the purposes of the Insolvency and Bankruptcy Code, 2016 (‘IBC’), is clearly provided for in the IBC, the interest component in the case of operational debt has always been a point of contention.

April, 2023 For Private Circulation - Educational & Informational Purpose Only A BRIEFING ON LEGAL MATTERS OF CURRENT INTEREST KEY HIGHLIGHTS ⁎ Bombay High Court: Arbitration clause can be invoked by assignee of rights under contract. * NCLT: Dissenting secured creditor cannot be treated higher than other creditors under Section 53 of the IBC just because they enjoy security interest. * Bombay High Court: “One-ness of interest”- the touch-stone for defendant to be transposed as plaintiff in case of part abandonment of suit claim. April, 2023 http://www.vaishlaw.com/ I.

A two-judge bench of the Supreme Court of India (“Supreme Court”) in its recent judgment Abhishek Singh v. Huhtamaki PPL Ltd.

Introduction