NCLT clarified many controversial legal issues surrounding telecom spectrum, including whether it could be subjected to IBC proceedings whether the bankrupt telcos could sell spectrum rights allotted to them as part of the IBC resolution process.
Homebuyers are now considered financial creditors, whereas operational creditors, who are from the business world, may have a better understanding of the industry but still lack those rights.
This isn’t the first time the NCLAT has ruled that, IBC rules take precedence over other laws, such as the attachment of corporate debtor’s assets under the PMLA.
The IBC’s applicability to NBFCs is a welcome legislative effort, and the new rules have extended the RBI’s role in performing an NBFC’s CIRP.
The IBC is favoured over the SARFAESI Act, primarily because it offers a quick solution and is also effective in reviving the company and safeguarding the interests of all stakeholders.
A perfect decision by the SC where the parties perform activities to avoid any commercial transactions which are collusive in nature or where financial creditor escape the bar under Section 21(2) first proviso of the IBC.
The IBC recognizes homebuyers under financial creditors to protect their rights even when a creditor, other than a homebuyer, invokes insolvency proceedings against the builder.
Since IBC enactments, it is necessary to consider the hits and misses of this momentous legislation so as to truly exploit the potential of the insolvency regime.
In the case of Ashok Tripathi and Anr Vs. Ansal Properties and Infrastructure Ltd. that a decree-holder/homebuyer having refund order from RERA or other courts shall not be deemed as a homebuyer but a financial creditor.
NCLAT, New Delhi Bench has held that claims towards rent of leasehold property do not fall within the definition of the operational debt under IBC.
Claims towards rent of leasehold property do not fall within the definition of the operational debt in terms of Section 5(21) of the Insolvency and Bankruptcy Code, 2016.
A judgement has been held by Hon’ble Supreme Court that the powers of the NCLT under the IBC do not extend to adjudicating disputes relating to quasi- judicial or statutory authorities.
The Ministry of Corporate Affairs may soon likely to move amendments to the code, including protection for new buyers and tighter norms for home buyers in terms of taking developers to the NCLT.
Flipkart approached the Karnataka High Court for a stay on the CIRP process initiated by the NCLT. Further, the Karnataka High Court stayed the CIRP process.
As per section 14 of the IBC 2016 and in the judgments it has been determined that during the moratorium period the invocation of guarantee against the ‘Company under Insolvency Proceedings/ CIRP.
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