The Adjudicating Authorities have been given discretionary powers under section 7(5)(a) of I&B Code, 2016. The Authorities are required to apply their mind and take into consideration all facts and circumstances.
The interest component can include in the principal debt to acquire a minimum threshold limit i.e., 1 crore if delayed payment stipulated in the agreement or invoice.
Claim of the rental lease will be treated as operational debt under Section 5(21) of the code as per the decision given by the Hon’ble NCLAT.
Article 137 is having a wider scope than Article 1 of the Limitation Act and is not applicable to the proceedings under the Insolvency and Bankruptcy Code. Article 1 is also not applicable to the petition filed by the Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code.
The apex court held that the Code isn’t a machinery for recovery though its usage in several perspectives still be within the nature of a recovery system.
‘Financial Debt’ would have to be construed to include interest free loans advanced to finance the business operations of a corporate body.
The NCLAT ruling, on the other hand, may present some difficulties for banks that have extended bank guarantees. When the IBC imposes a moratorium period, recouping funds paid under bank guarantees from a corporate debtor may be difficult.
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.
Since the Limitation Act is applicable to applications filed under Sections 7 and 9 of the Code from the inception of the Code, Article 137 of the Limitation Act gets attracted. “The right to sue”, therefore, accrues when a default occurs.
The Adjudicating Authorities have affirmed the IBC’s goals through a series of judgments and further proved its prevalence over the other laws of land.
The Supreme Court of India defined Section 60(5) of the Code as a residuary jurisdiction vested in the NCLT, allowing the NCLT to decide all questions of law or fact arising out of or in relation to the corporate debtor’s insolvency resolution or liquidation under the Code.
Insolvency Professionals eligible to be appointed as Liquidator alongside written consent form within 10 days of the direction issued, and upon receipt of the proposal, the order of appointment of Liquidator is passed.
The resolution professional, as proposed respectively in the application under section 7 or section 10 of IBC, shall be appointed as the interim resolution professional under Section 16(2) of IBC, if no disciplinary proceedings are pending against him.
If any individual has any outstanding claims against an organization and the said organization has been exposed to CIRP, the primary thing that must be finished by such bank immediately is to document his/her cases before any IRP/RP.
The Committee of Creditors (CoC) has complete wisdom and right to decide the fate of the company under CIRP. Lets understand all about Committee of Creditors under Insolvency Laws
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