INTRODUCTION
This is in succession to our previous con-call held on August 9, 2019. The Supreme Court in its judgment of Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta dated November 14, 2019 (“Judgment”) has set aside the decision of the National Company Law Appellate Tribunal (“NCLAT”).
INTRODUCTION
Various Indian judicial fora, including the Supreme Court, have affirmed that a creditor may proceed against a guarantor on failure of the principal debtor to repay a loan without first exhausting his remedies against the principal debtor.
The Reserve Bank of India (RBI) issued a revised prudential framework for resolution of stressed assets on 7 June 2019 (Revised Circular) in supersession of the erstwhile circular on Resolution of Stressed Assets dated 12 February 2018 (Feb 12 Circular) which was struck down by the Hon’ble Supreme Court on 2 April 2019.
I. NCLAT approves the resolution plan submitted by ArcelorMittal in the resolution proceedings in respect of Essar Steel India Limited while modifying the distribution of money to the financial and the operational creditors
In State Bank of India v Moser Baer Karamchari Union [Company Appeal (AT) (Insolvency) Number 396 of 2019] (Moser Baer), the National Company Law Appellate Tribunal, New Delhi (NCLAT), ruled on the scope of ‘workmen’s dues’ under Section 53 of the Insolvency and Bankruptcy Code, 2016 (IBC) from the perspective of the dues of an employer towards provident fund, pension fund and gratuity. Background |
I. Institutional changes
Supreme Court has held that:
The Supreme Court in its recent decision in K Kishan v M/s Vijay Nirman Company Private Limited, Civil Appeal No 21825 of 2017, has put to rest the question of whether an arbitral award that has been challenged under Section 34 of the Arbitration and Conciliation Act, 1996 (Act) by the award debtor can form the basis for an action under Section 9 of the Insolvency and Bankruptcy Code, 2016 (Code).
Relying on Report of Insolvency Law Committee, Supreme Court of India has held that insertion of Section 238A in the Insolvency and Bankruptcy Code (IBC) is retrospective.
Setting aside the NCLAT Order, the court in its judgement dated 11-10-2018 held that Limitation Act, 1963 will apply to the applications made under Section 7 and/or Section 9 of the IBC on and from its commencement on 1-12-2016 till 6-6-2018 when the provisions of applicability of Limitation Act were incorporated.