March, 2024 For Private Circulation - Educational & Informational Purpose Only A BRIEFING ON LEGAL MATTERS OF CURRENT INTEREST KEY HIGHLIGHTS * NCLT: Corporate insolvency resolution process cannot be initiated under Section 7 of IBC based on transfer agreement for purchase of debentures from financial creditors. ⁎ NCLAT: Security for refund of advance amount cannot change the nature of transaction for supply of goods into financial debt.

As we continue our journey through the evolving insolvency landscape of 2023, we will delve into two landmark cases that further shaped the legal framework governing insolvency proceedings in India. Building upon the foundations laid in Part 1 of this series, we now turn our attention to M/s. Next Education India Pvt. Ltd. Vs. M/s. K12 Techno Services Pvt. Ltd and Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation India Ltd.

M/s. Next Education India Pvt. Ltd. Vs. M/s. K12 Techno Services Pvt. Ltd.

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.

Introduction:

INTRODUCTION

India has been grappling with an increase in non-performing assets (NPA) and defaults of loans since at least the 1990s. As per recent reports, gross NPAs of public sector banks have doubled in the last 7 (seven) years, 1 which is indicative of the issues being faced by lenders against recalcitrant borrowers.