Insolvency Law : Supreme Court Explains Important Principles of IBC, 2016 in its Recent Judgment

Insolvency Law : Supreme Court Explains Important Principles of IBC, 2016 

Application of Limitation Act, 1963 on IBC, 2016 

Law on Debt and its Acknowledgment

"In view of Section 238A of the IBC, 2016 that the Limitation Act, 1963 shall, as far as may be, apply to the proceedings under the IBC, 2016. It is also well settled that Article 137 of the first schedule to the Limitation Act providing a period of 3 years from the date when the right to apply accrues will govern the situation. An acknowledgment of debt merely renews the debt and does not create a new right of action. It is further essential that the acknowledgment must relate to a subsisting liability and must indicate the jural relationship between the parties such as that of debtor and creditor, and it must appear that the statement is made with the intention to admit such jural relationship." - IL&FS Financial Service Ltd v. Adhunik Meghalaya Steels Ltd [2025] GCtR 1382 (SC)

Property Sale, Housing Loans and The Fundamentals of Law

Property Sale, Housing Loans and The Fundamentals of Law

It has been explained in Union Bank of India v. Rajasthan RERA [2021] GCtR 3445 (Jaipur, Rajasthan) that in the event of direct conflict between the two central statutes giving overriding effect to the Act, ordinarily the subsequent legislation would prevail. As per S.11 of R E(R&D) Act, 2016 after a promoter executes an agreement for sale for any apartment, plot or building he shall not mortgage or create a charge on such apartment, plot or building and if any such mortgage or charge is made or created then notwithstanding anything contained in any other law for the time being in force, it shall not affect the right and interest of the allottee who has taken or agreed to take apartment, plot or building, as the case may be. RERA authority has the jurisdiction to entertain a complaint by an aggrieved person against the bank as a secured creditor if the bank takes recourse to any of the provisions contained in S. 13(4) of the SARFAESI Act, 2002.

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

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters/blogs without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made by the violator. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957. This is not to be considered as any professional legal advice and does not constitute client-attorney relationship.

Whether Insolvency Professionals (IPs) are Public Servants ? HC Answers the Issue

 Whether the Insolvency Professionals (IP) are Public Servants ? HC Answers the Issue

There are many decisions which deal with insolvency professionals.

In Dr. Arun Mohan v CBI [2023] GCtR 2169 (Delhi), it was held that an Insolvency Professional does not fall within the meaning of “public servant” as ascribed in any of the clauses of sub-section (c ) of section 2 of the Prevention of Corruption Act, 1988.

Complete judgment can be downloaded free of cost from https://delhihighcourt.nic.in/judgment - Date of Judgment is 18 December 2023.

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters/blogs without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957. This is not to be considered as any professional legal advice and does not constitute client-attorney relationship.  

110 Landmark Judgments of Supreme Court of 2023 ; Part 4

110 Landmark Judgments of Supreme Court of 2023 ; Part 4

There are many interesting judgments which were pronounced by Hon'ble Supreme Court in 2023. One can download full copy of judgment Free of cost from the website www.sci.gov.in.

The list [Part 4] is as follows :  

1. Boby v State of Kerala [2023] GCtR 2157 (SC).

2. Fisherman Care v Govt of India [2023] GCtR 237 (SC).

3. Prakash Nayi @ Sen v State of Goa [2023] GCtR 303 (SC). 

4. Stalin @ Satalin Samuvel v State [2023] GCtR 2158 (SC). 

5. Deepak Gaba v State of UP [2023] GCtR 17 (SC). 

6. Ex-Const Mukesh Kumar Raigar v Union of India [2023] GCtR 139 (SC).

7. Hirenkumar Chandulal Aghara v SBI [2023] GCtR 2159 (SC).

8. Pankaj Dhar Dubey v Union of India [2023] GCtR 2160 (SC). 

9. Sidrathul Munthana v Tharik [2023] GCtR 2161 (SC). 

10. Dalbir Singh v State of Punjab [2023] GCtR 2162 (SC). 

Previous List is shared again for more clarity and convenience : - 

1. Godrej Sara Lee Ltd v Excise and Taxation Officer [2023] GCtR 2136 (SC)
2. SEBI v V. Shankar [2023] GCtR 2137 (SC)
3. Aman Semi Conductors (Pvt) Ltd v HSIDC [2023] GCtR 2138 (SC)
4. Rana Ayyub v Directorate of Enforcement [2023] GCtR 332 (SC)
5. C. Yamini v High Court for State of AP [2023] GCtR 2139 (SC)
6. Telangana State Level Police Recruitment Board v Narimetla Vamshi [2023] GCtR 2140 (SC)
7. Ashutosh Sanyasi v State of MP [2023] GCtR 2141 (SC)
8. Sahil Raj v The State of Tamil Nadu [2023] GCtR 2142 (SC)
9. UT of J&K & Anr v Jugal Kishore Sharma & Ors [2023] GCtR 2143 (SC)
10. Neha v State of Maharashtra [2023] GCtR 2144 (SC).
11. AMD Industries v Commissioner of Trade Tax [2023] GCtR 52 (SC).
12. Shekhar Resorts Ltd v Union of India [2023] GCtR 41 (SC)
13. Association of Old Settlers of Sikkim v Union of India [2023] GCtR 114 (SC)
14. Sunil Saini v State of Haryana [2023] GCtR 2133 (SC)
15. Alpine Housing Dev. Corpn. Ltd v Ashok S. Dhariwal [2023] GCtR 190 (SC)
16. John Anthonisamy @ John v State [2023] GCtR 191 (SC)
17. K.L. Suneja v Dr. Manjeet Kaur Monga [2023] GCtR 2134 (SC)
18. Rajaram v Maruthachalam [2023] GCtR 176 (SC) 
19. M/s Sidha Neelkanth Paper Industries Pvt Ltd v Prudent ARC Limited & Others [2023] GCtR 2135 (SC) 
20. IFB Agro Industries Ltd v SICGIL India Ltd & Ors [2023] GCtR 31 (SC) 
21. Authum Investment and Infrastructure Ltd v R.K. Mohatta Family Trust [2023] GCtR 2145 (SC)
22. State of Karnataka v Ecom Gill Coffee Trading Pvt Ltd [2023] GCtR 2146 (SC).
23. Super Diamond Tools v K. Mohan Rao [2023] GCtR 2147 (SC). 
24. State of Haryana v Satpal [2023] GCtR 514 (SC).
25. Anoop Baranwal v Union of India [2023] GCtR 2148 (SC).
26. State Bank of India v Rajesh Agarwal [2023] GCtR 688 (SC). 
27. Ankit Kumar Singh v State of MP [2023] GCtR 2149 (SC).
28. Farmax India Ltd v SEBI [2023] GCtR 2150 (SC).
29. Vipulkumar Ramanbhai Makwana v State of Gujarat [2023] GCtR 2151 (SC). 
30. Greater Mohali Area Dev. Authority v Surinder Kaur [2023] GCtR 2152 (SC).  

 

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters/blogs without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957. This is not to be considered as any professional legal advice and does not constitute client-attorney relationship.  

110 Landmark Judgments of Supreme Court of 2023 ; Part 3

110 Landmark Judgments of Supreme Court of 2023 ; Part 3

There are many interesting judgments which were pronounced by Hon'ble Supreme Court in 2023. One can download full copy of judgment Free of cost from the website www.sci.gov.in.

The list [Part 3] is as follows :  

1. Authum Investment and Infrastructure Ltd v R.K. Mohatta Family Trust [2023] GCtR 2145 (SC)

2. State of Karnataka v Ecom Gill Coffee Trading Pvt Ltd [2023] GCtR 2146 (SC).

3. Super Diamond Tools v K. Mohan Rao [2023] GCtR 2147 (SC). 

4. State of Haryana v Satpal [2023] GCtR 514 (SC).

5. Anoop Baranwal v Union of India [2023] GCtR 2148 (SC).

6. State Bank of India v Rajesh Agarwal [2023] GCtR 688 (SC). 

7. Ankit Kumar Singh v State of MP [2023] GCtR 2149 (SC).

8. Farmax India Ltd v SEBI [2023] GCtR 2150 (SC).

9. Vipulkumar Ramanbhai Makwana v State of Gujarat [2023] GCtR 2151 (SC). 

10. Greater Mohali Area Dev. Authority v Surinder Kaur [2023] GCtR 2152 (SC). 

Previous List is shared again for more clarity and convenience : - 

1. Godrej Sara Lee Ltd v Excise and Taxation Officer [2023] GCtR 2136 (SC)
2. SEBI v V. Shankar [2023] GCtR 2137 (SC)
3. Aman Semi Conductors (Pvt) Ltd v HSIDC [2023] GCtR 2138 (SC)
4. Rana Ayyub v Directorate of Enforcement [2023] GCtR 332 (SC)
5. C. Yamini v High Court for State of AP [2023] GCtR 2139 (SC)
6. Telangana State Level Police Recruitment Board v Narimetla Vamshi [2023] GCtR 2140 (SC)
7. Ashutosh Sanyasi v State of MP [2023] GCtR 2141 (SC)
8. Sahil Raj v The State of Tamil Nadu [2023] GCtR 2142 (SC)
9. UT of J&K & Anr v Jugal Kishore Sharma & Ors [2023] GCtR 2143 (SC)
10. Neha v State of Maharashtra [2023] GCtR 2144 (SC).
11. AMD Industries v Commissioner of Trade Tax [2023] GCtR 52 (SC).
12. Shekhar Resorts Ltd v Union of India [2023] GCtR 41 (SC)
13. Association of Old Settlers of Sikkim v Union of India [2023] GCtR 114 (SC)
14. Sunil Saini v State of Haryana [2023] GCtR 2133 (SC)
15. Alpine Housing Dev. Corpn. Ltd v Ashok S. Dhariwal [2023] GCtR 190 (SC)
16. John Anthonisamy @ John v State [2023] GCtR 191 (SC)
17. K.L. Suneja v Dr. Manjeet Kaur Monga [2023] GCtR 2134 (SC)
18. Rajaram v Maruthachalam [2023] GCtR 176 (SC) 
19. M/s Sidha Neelkanth Paper Industries Pvt Ltd v Prudent ARC Limited & Others [2023] GCtR 2135 (SC) 
20. IFB Agro Industries Ltd v SICGIL India Ltd & Ors [2023] GCtR 31 (SC) 

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters/blogs without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957. This is not to be considered as any professional legal advice and does not constitute client-attorney relationship.  

110 Landmark Judgments of Supreme Court of 2023 ; Part 2

110 Landmark Judgments of Supreme Court of 2023 ; Part 2

There are many interesting judgments which were pronounced by Hon'ble Supreme Court in 2023. One can download full copy of judgment Free of cost from the website www.sci.gov.in

The list is as follows : 

1. Godrej Sara Lee Ltd v Excise and Taxation Officer [2023] GCtR 2136 (SC)
2. SEBI v V. Shankar [2023] GCtR 2137 (SC)
3. Aman Semi Conductors (Pvt) Ltd v HSIDC [2023] GCtR 2138 (SC)
4. Rana Ayyub v Directorate of Enforcement [2023] GCtR 332 (SC)
5. C. Yamini v High Court for State of AP [2023] GCtR 2139 (SC)
6. Telangana State Level Police Recruitment Board v Narimetla Vamshi [2023] GCtR 2140 (SC)
7. Ashutosh Sanyasi v State of MP [2023] GCtR 2141 (SC)
8. Sahil Raj v The State of Tamil Nadu [2023] GCtR 2142 (SC)
9. UT of J&K & Anr v Jugal Kishore Sharma & Ors [2023] GCtR 2143 (SC)
10. Neha v State of Maharashtra [2023] GCtR 2144 (SC).

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters/blogs without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957. This is not to be considered as any professional legal advice and does not constitute client-attorney relationship. 

110 Landmark Judgments of Supreme Court of 2023 ; Part 1

 110 Landmark Judgments of Supreme Court of 2023 ; Part 1

There are many interesting judgments which were pronounced by Hon'ble Supreme Court in 2023. One can download full judgment Free of cost from the website www.sci.gov.in

The list is as follows : 

1. AMD Industries v Commissioner of Trade Tax [2023] GCtR 52 (SC).
2. Shekhar Resorts Ltd v Union of India [2023] GCtR 41 (SC)
3. Association of Old Settlers of Sikkim v Union of India [2023] GCtR 114 (SC)
4. Sunil Saini v State of Haryana [2023] GCtR 2133 (SC)
5. Alpine Housing Dev. Corpn. Ltd v Ashok S. Dhariwal [2023] GCtR 190 (SC)
6. John Anthonisamy @ John v State [2023] GCtR 191 (SC)
7. K.L. Suneja v Dr. Manjeet Kaur Monga [2023] GCtR 2134 (SC)
8. Rajaram v Maruthachalam [2023] GCtR 176 (SC) 
9. M/s Sidha Neelkanth Paper Industries Pvt Ltd v Prudent ARC Limited & Others [2023] GCtR 2135 (SC) 
10. IFB Agro Industries Ltd v SICGIL India Ltd & Ors [2023] GCtR 31 (SC) 

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters/blogs without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957. This is not to be considered as any professional legal advice and does not constitute client-attorney relationship. 

 

 

NCLT's Order Unsustainable : Appeal Filed by Resolution Applicant Allowed

 NCLT's Order Unsustainable : Appeal Filed by Resolution Applicant Allowed

According to S.31 (2) of IBC, 2016, NCLT has the power to reject the resolution plan. The process of fast track CIRP can be seen from the provisions of S.56 (1) where a time period of 90 days has been mentioned. 

Sec. 60 (1) of IBC, 2016 for territorial jurisdiction is linked with the place where the registered office of the corporate person is located. 

In a recent case of December 2023 arising out of litigation under IBC, 2016, the appeal was filed by resolution applicant challenging the Order of the NCLT. 

In Express Resorts and Hotels Ltd v Amit Jain [2023] GCtR 2127 (NCLAT), the approach of NCLT in dealing with applications filed by resolution applicants was exposed. Finally, the appeal filed by Resolution applicant was allowed and NCLT's Order was termed as "unsustainable" at page 13. 

Surprisingly, the entire discussion makes absolutely no mention about the ratio of Innoventive Industries Ltd v ICICI Bank [2017] GCtR 1171 (SC). 

One can download full copy of the decision free of cost from the following link : - 

https://nclat.nic.in/display-board/judge 

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters/blogs without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957. This is not to be considered as any professional legal advice and does not constitute client-attorney relationship.

IBC, 2016 : Suspended Director's Appeal Challenging Order of NCLT Dismissed

 IBC, 2016 : Suspended Director's Appeal Challenging Order of NCLT Dismissed

Litigations under Insolvency and Bankruptcy Code, 2016 ("IBC, 2016") occurs at various levels. 

According to S.5(7) of IBC, 2016, “financial creditor” means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to. It is important to note that under S.14 (2) of IBC, 2016 "the supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period". S.16 (1) of IBC, 2016 permits NCLT to appoint an IRP. 

In a recent case [Citation : Mehulkumar Arvindbhai Patel and Anr. v Vinod Tarachand Agarwal [2023] GCtR 2126 (NCLAT)], the suspended Director had filed the appeal. 

The appeal was filed challenging the Order of NCLT. After untangling one of the most controversial issues related to IBC, 2016, the appeal filed by suspended director was dismissed in December 2023. 

One can download full copy of the decision free of cost from the following link : - 

https://nclat.nic.in/display-board/judge 

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters/blogs without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957. This is not to be considered as any professional legal advice and does not constitute client-attorney relationship.

IBC, 2016 : Resolution Professional Is a Public Servant

 IBC, 2016 : Resolution Professional Is a Public Servant

A recent Judgment has been passed on 5 April 2023 by Hon'ble Jharkhand High Court in Cr.M.P. 1048 of 2021.

In Sanjay Kumar Agarwal v CBI [2023] GCtR 837 (Jharkhand), it has been held that the resolution professional will come within the meaning of a public servant under Section 2(c) the PC Act.

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction. Reproduction of judgment or publication of judgment unless expressly prohibited by Court according is not an infringement of copyright according to S. 52 (1)(q)(iv) of Copyright Act, 1957.

IRP has to Constitute a Committee of Creditors (CoC) under IBC, 2016

IRP has to form a Committee of Creditors under IBC, 2016 

Insolvency and Bankruptcy Code, 2016 is interesting. 

Section 18 (c) of IBC, 2016 indicates that Interim Resolution Professional has to constitute a committee of creditors. 

One can go through Innoventive Industries Ltd v ICICI Bank Ltd [2017] GCtR 1171 (SC) for more details about IBC, 2016. 

Written by 

Vishal

Delhi

Notice : Copyright of above blog and its content including headline vests with Vishal. Above should Not be reproduced in any form in newspapers/websites/Ph.D. thesis/College projects/ law firms' newsletters/law journals/books/book chapters without prior written permission. Fair use should be in terms of Copyright Act, 1957. Any violation will make violator liable for Pecuniary compensation with interest towards the author irrespective of the profit made. All disputes shall be subject to Delhi Jurisdiction.