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.
As per the settled law there is no law or provision which states that either the Adjudicating or the Appellate Authority has the powers to question the resolution plan approved by the COC until and unless the same is barred by some irregularity.
The IBBI has disclosed that work is in progress to amend the IBC to make it compliant with cross border insolvency processes.
The matter is that in a situation where the Applicant is unable to prove the amount advanced as loan without proper documentations, such loan amount would not meet the requirements of a “Financial Debt”.
The Appellants cannot be permitted to pursue alternative remedy of suit/arbitration proceeding even if pending as Resolution Plan is binding on all the stakeholders.
Order deliverd by NCLAT is a relief for creditors to invoke the jurisdiction of IBC and seek appropriate redressal for their long-awaited grievances against the debtor.
The institution of Insolvency proceedings against DHFL will result in Courts to venture out over new dimensions of prospective rights and liabilities of the financial service providers.
A financial creditor(s) may file an application for initiating CIRP u/s 7 of IBC against a corporate debtor when a default has occurred.
It is to be understood that the objective of IBC is not to provide benefit only to selective creditors but to protect the interests of all the stakeholders.
The homebuyers who wish to seek refund of their amount are legally entitled to approach National Company Law Tribunal (NCLT) under IBC.
The shareholders and promoters are not the creditors and thereby the resolution plan cannot balance the maximization of the value of assets of the corporate debtor
operational creditors are those creditors where liabilities arise from transactions on operations.
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.
The homebuyers have got a huge sigh of relief, and are finding it easier to get their money back which was a big deal before the enactment of IBC.
Initiation process of Insolvency Resolution by a financial creditor in the easiest possible manner along with the time line that is required to be followed.
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