The Hon’ble NCLAT, Principal Bench, New Delhi held that the IBC does not vest the power to NCLT to Suo-moto classify a transaction as Preferential Transaction under Section 44 r/w Section 45 of IBC.
The Adjudicating Authority dismissed the Application and held that it is a case of collusive Application whereby the Corporate Debtor is trying to seek benefits of Moratorium u/s 14 of the IBC and other advantages in accordance with other provisions of IBC 2016.
The Supreme Court clarified the code’s object while keeping legislative intent in mind. The court, through this judgement, has struck a balance between creditors’ rights and debtor companies’ remedies.
Calcutta High Courts held that moratorium under Section 14 of IBC also includes criminal proceedings for cheque bounce cases under Section 138 of the Negotiable Instruments Act, thus parallel proceedings against a corporate debtor cannot be allowed.
SBI initiated proceedings against Veesons under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), demanding an outstanding amount of approximately INR 61 crores as Veesons did not pay its debts on time.
IBC was introduced to reorganise, restructure or to consolidate the existing framework into a single law for the purpose of Insolvency and Bankruptcy.
The Committee of Creditors (CoC) is the preeminent dynamic body in a Corporate Insolvency Resolution Process (CIRP). Choices with respect to the organization of the corporate borrower are taken at the gatherings of the Committee, in light of a dominant part vote of the individuals.
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.
Resolution applicants enter the CIRP and prepare “Resolution Plans,” which are effectively instruments for taking over a corporate debtor, paying its creditors’ debts, and completing its recovery and restructuring.
Hon’ble SC clarified the position of the homebuyers similar to that of a “financial creditor” under the IBC, after this the homebuyers were at a par with banks and financial institutions.
These two judgements would be of great importance because they have paved a way for the transfer of post-notice winding up petitions pending before the different High Courts.
It is advisable to the creditors to make a plea of initiating Group Insolvency while filing an application for initiation of CIRP against a corporate debtor.
an Insolvency Professional having all the aforementioned requirements may be chosen as An IRP for the corporate debtor. However it may have an advantage over other IRP if the person had already dealt in that specific industry being an RP/IRP.
The NCLAT held that CIRP against Real Estate Company shall be limited to Project concerned and will not affect other projects of the developers.
The term Moratorium is nowhere defined in the Code, however, the term in basic parlance means, ”a stopping of activity for an agreed amount of time”.
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