Exemption from the strict adherence to the timeline of 270 days of the Insolvency and Bankruptcy Code, 2016

The Corporate Insolvency Resolution Process has to be completed in 180 days along with the provision of 90 days of extension or maximum allowed time is 270 days.

Persons upon whom the Insolvency code is applied

The code is not applicable to corporates in finance sector. Thus no petition shall be entertained by NCLT filed against Banks, Financial Institutions, Insurance Company, Asset Reconstruction Company, Asset Reconstruction Company, Mutual Funds, Collective Investment Schemes or Pension Funds.

When can Insolvency proceedings commence?

When the corporate debtor starts making default in the payment of the amount to its creditors and it goes on for some time, subsequently that corporate debtor/company is deemed as insolvent.

Defense by the Corporate Debtor

In case of financial creditor being an applicant to the insolvency process, an application would be made to Adjudicating Authority and a copy of such application would be sent to the corporate debtor.

Nirav Modi and ICICI cases to get special attention from Ministry of Corporate Affairs

Nirav Modi scam and the ICICI Bank controversy were amongst the top notch cases that the NCLT is dealing with and Government is taking keen interest in resolving these issues.

Operational Creditors still unable to gain from Insolvency Resolution

According to the terms of loan resolution in the Insolvency and Bankruptcy Code, the first preference on recovery is to secured financial creditors, followed by unsecured financial creditors, and then operational creditors.