IBC / Insolvency Law : Elementary Features

 IBC, 2016 : Elementary Aspects of Insolvency Law

S.4 fixes amount of Rs. 1 crore (min.). Insolvency resolution process period is 180 days. S.6 gives power to CD also to initiate CIRP. S.7 gives power to financial creditor. S.8(2) for time limit of 10 days to CD. Under S.7 (4) time limit is 14 days with NCLT. Under S.9, OC files application. Under S.10, Corporate applicant can also file application. Time limit to complete CIRP under S.12 is 180 days ; this time can be extended if more than 66% votes in CoC say so. Proviso to S. 12 says it has to be completed within max. 330 days. Moratorium is declared under S.14 by NCLT. Under S.21 (2) all Financial creditors constitute CoC. Within 7 days, first meeting of COC has to be undertaken [See S.22]. A wilful defaulter cannot become a Resolution Applicant under S.29A. Fast Track CIRP under S.56 is to be done in 56 days. Appeal under S.61 can be filed before NCLAT within 30 days extendable to 15 days. Appeal to Supreme Court under S.62 is to be filed within 45 days extendable to 15 days [from date of receipt of Order]. S.238A deals with applicability of Limitation Act, 1963 and S.238 gives effect to provisions of IBC. 

Under S.61 (1) of IBC, "any person aggrieved by Order of Adjudicating Authority" can file appeal to NCLAT.

According to S.17 (1) of IBC, 2016, management of affairs of corporate Debtor shall vest in IRP from the date of appointment of IRP. An undischarged insolvent is not eligible to submit a Resolution Plan under S.29A of IBC, 2016. The Order under S.31 of IBC is to be passed by NCLT approving the resolution plan which was approved by CoC (Committee of Creditors). NCLT has power under S.31 (2) to even reject the R-plan. The appeal against order approving resolution plan is, as per S.32 of IBC, has to be contains grounds given in S.61 ; there are 5 grounds contained in S.61 (3) of IBC, 2016 which are relevant for filing appeal against an Order approving Resolution Plan.

Innoventive Industries v. ICICI Bank [2017] GCtR 1171 (SC) has held that "it is clear that the later non-obstante clause of the Parliamentary enactment will also prevail over the limited non-obstante clause contained in Section 4 of the Maharashtra Relief Undertakings (Special Provisions Act), 1958. For these reasons, Maharashtra Act, 1958 cannot stand in the way of the corporate insolvency resolution process under the IBC, 2016".