5 Important Cases of Jan 2024 on IBC, 2016

 5 Important Cases of Jan 2024 on Insolvency and Bankruptcy Code (IBC, 2016) :

Developments have taken place in the first 10 days of Jan 2024 as far as interpretation of IBC, 2016 is concerned.

From 2016 to 2024, many decisions on IBC, 2016 have been pronounced.

Here are the 5 (five) important decisions on IBC, 2016 pronounced in January 2024 : -

◼ "Provisions of the Limitation Act in certain regard is equally applicable to both Section 7 and 9 of IBC". It was reiterated that "Limitation Act is applicable to applications filed under Sections 7 and 9 of the Code from the inception of the Code, Article 137 of the Limitation Act gets attracted. “The right to sue”, therefore, accrues when a default occurs." - In Style Fashion v Aditya Birla Fashion and Retail Limited [2024] GCtR 143 (NCLAT)

◼ The submission that the secured creditor’s entitlement to distribution under Section 53(1)(b)(ii) of IBC, 2016 is applicable where the secured creditor relinquishes its security interest under Section 52 of the Code, and, therefore, is not applicable to dissenting financial creditors is erroneous and unacceptable.  - DBS Bank Ltd v Ruchi Soya Industries Ltd [2024] GCtR 26 (SC)

◼ "Under the ambit of Section 7 of IBC, 2016, the Adjudicating Authority is to only determine whether a ‘default’ has occurred and whether the ‘debt’, which may still be disputed, was due and remained unpaid. A debt may not be due if it is not payable in law or in fact. The moment the Adjudicating Authority is satisfied that a default has occurred, the Application must be admitted unless it is incomplete." - Narendrabhai v PNB Housing Finance Ltd. [2024] GCtR 144 (NCLAT)

◼ Scope of initiating proceedings under S.9 of IBC, 2016 has been explained and clarified in Alpa Rajeev Shah v Kevin Ventures LLP [2024] GCtR 145 (NCLAT).

◼ "The claims of incentives and subsidies at the best, can be treated as contingent future probable receipts which may or may not happen". - Ajay Kumar Baheti v Axis Bank Ltd [2024] GCtR 146 (NCLAT)

Written by 

Vishal

Delhi

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