In a decision delivered by Delhi High Court on June 24, 2024 in the case of The National Sewing Thread Company Limited v. Deputy Commissioner of Income Tax (2024 DHC 4771-DB) it was held that once a resolution plan is approved by the adjudicating authority, the claims not included in the resolution plan stand extinguished, and the same is binding on all stakeholders, including the Central and State governments.
The issue of release/enforcement of third party guarantees as part of a resolution plan of the borrower has been the subject of litigation across various judicial forums in India.
To clarify this issue, the Insolvency and Bankruptcy Board of India (IBBI) has proposed amendments to IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 as part of its recent discussion paper.
The Principal Bench of the National Company Law Appellate Tribunal, New Delhi (“NCLAT”) in the case of Pooja Mehra v Nilesh Sharma (RP for Dream Procon Pvt. Ltd.)1, while examining the validity of the appellant homebuyers' claim, dismissed an appeal for condonation of delay of 552 (five hundred and fifty-two) days in filing a claim against the corporate debtor.
On July 2, 2024, the Hon’ble Delhi High Court (“Delhi HC”), in the case of Sanjay Dhingra vs.
In the matter of BRS Refineries vs. . Mr. Supriyo Kumar Chaudhari, the NCLAT New Delhi upheld the order passed by the Adjudicating Authority (National Company Law Tribunal), Allahabad Bench, rejecting an appeal filed by BRS Refineries. The earlier appeal had challenged the action of the liquidator for JVL Agro Industries Ltd., to forfeit the earnest money deposit (EMD) of Rs. 96 lakhs pursuant to the e-auction of the assets of JVL Agro Industries Ltd.
Under the framework of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), an asset reconstruction company (ARC) has wide powers to revive a company facing financial difficulties. It can use securitisation, reconstruction and recovery for quick resolution of distressed debt. As an alternative, the Insolvency and Bankruptcy Code, 2016 (IBC), allows ARCs with access to a formal resolution process, which has the advantage of the borrower emerging debt-free with a clean slate.
The intention of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘IBC’) is to rehabilitate the companies and individuals by way of the Corporate Insolvency Resolution Process (hereinafter referred to as ‘CIRP’).
The IBBI Working Group on Group Insolvency (under the chairmanship of UK Sinha) and the MCA Cross Border Insolvency Rules/Regulations Committee having submitted their reports (collectively “Reports”) had recommended the introduction of a framework governing the resolution of enterprise groups under the Insolvency and Bankruptcy Code, 2016 (“IBC”) in September 2019 and December 2021 respectively.
This article analyses the extent to which dissenting financial creditors are protected under the Indian insolvency regime.
The Insolvency and Bankruptcy Code, 2016 ("the Code" & “IBC”) has been widely acclaimed as a transformative legislative framework in India, representing a significant departure from previous insolvency laws by emphasizing efficient resolution processes and the professionalization of insolvency services.