In a recent decision, the NCLAT in the case of Beetel Teletech Ltd. v. Arcelia IT Services Private Limited made 2 (two) relevant findings on the maintainability of applications under Insolvency and Bankruptcy Code, 2016 (“IBC”):

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:

In the recent case of Vistra ITCL (India) Limited & Ors. v. Mr. Dinkar Venkatasubramanian & Anr., the Supreme Court re-affirmed the legal position that persons who are merely beneficiaries of security by a corporate debtor do not qualify as financial creditors in the corporate insolvency resolution process (“CIRP”) of the corporate debtor. However, the Supreme Court also held that a resolution plan cannot dilute the security interest provided by the corporate debtor in favour of such beneficiaries.

Brief Facts

In a significant decision, the NCLAT in the case of Agarwal Polysacks Ltd. vs K. K. Agro Foods & Storage has recently held that a written financial contract is not the only basis for proving the financial debt. Financial debt can be proved from other relevant documents such as the balance sheet entries of the financial creditor, the corporate debtor’s balance sheet and the Form 26AS showing TDS deductions on the interest.

Brief Facts

In a recent decision the NCLAT, in the case of IDBI Trusteeship Services Ltd. vs. Direct Media Distribution Ventures Pvt. Ltd. held that even if the creditor realizes certain amounts after the original date of default / invocation, the date of a subsequent demand notice (for the adjusted amount) cannot be treated as the “date of default” for purposes of the Insolvency and Bankruptcy Code, 2016 (“IBC”).

Brief Facts

The National Company Law Appellate Tribunal, Principal Bench, New Delhi (“NCLAT”) has in the case of SVA Family Welfare Trust & Anr v. Ujaas Energy Limited & Ors inter alia held that a resolution plan can contain a clause which extinguishes security interest, such as personal guarantees, after paying compensation to the financial creditor in whose favour such security interest was created.

INTRODUCTION

One of the biggest changes brought in by the Insolvency and Bankruptcy Code, 2016 (“Code”) was the demarcation between treatment of interest vis-à-vis financial debt and operational debt. Over time, Courts have interpreted the Code with the aim to strengthen the foundation and resolve uncertainties. One such exercise, which has greatly impacted the insolvency regime, is the inclusion of interest in operational debt.

PHASE 1 – EXCLUSION OF INTEREST

Introduction

Introduction

On April 26, 2024, in what has been hailed as a pivotal moment for Indian aviation and insolvency law, the Delhi High Court (“High Court”) directed the Directorate General of Civil Aviation (“DGCA”) to deregister planes leased to Go First within five working days, providing much-sought after relief to the lessors of the aircraft.