Pre Packaged Insolvency under IBC, 2016
Chapter III-A is in Part 2 of IBC, 2016. Part 2 of IBC is titled as Insolvency Resolution and Liquidation for Corporate Persons.
Chapter III-A of IBC, 2016 deals with pre packaged insolvency resolution process under IBC, 2016. This chapter was introduced through an Amendment Act, 2021. This chapter was introduced in IBC after COVID.
S.54A (3) of IBC requires approval of financial creditors representing not less than 66% in value of financial debt.
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 : NCLT's Order passed in Contravention of Rules Set Aside
Section 3 (11) of Insolvency and Bankruptcy Code, 2016 ("IBC, 2016") defines debt and says that “debt” means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt." Sec. 6 of IBC, 2016 permits even a corporate debtor initiate CIRP.
In a recent case related to IBC, 2016 in Jasti Samba Siva Rao v SREI Equipment Finance Ltd [2023] GCtR 2125 (NCLAT, Chennai), the Order of National Company Law Tribunal ("NCLT") was challenged.
Explaining the effect of applicable Rules, the Order passed by NCLT was set aside.
One can download full copy of 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.
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