CIRP is a process to determine the capability of repayment of the defaulted corporate. For this purpose, IRPs are appointed. They evaluate the assets and liabilities to determine the capability of repayment.
In the present case, debt pertaining to unpaid license fee was fully covered within the meaning of ‘operation debt’ under Section 5(21), and the Adjudicating Authority committed an error in holding that the debt claimed by the Operational Creditor is not an ‘operational debt’
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.
NCLT held that the “interest” component alone cannot be claimed or pursued, in absence of the debt, to trigger a CIRP against the corporate Debtor. Further, the application pursued realization of the interest amount alone is against the intent of the IBC, 2016.
The NCLAT had to decide whether the NCLT/CoC may provide resolution applicants repeated chances to alter their individual resolution plans and whether the CoC was authorised to entertain fresh or revised resolution plans without exhausting available bids.
If the Application filed under Section 7 meets all the requirements, then also the Adjudicating Authority has to exercise discretion carefully to prevent and protect the Corporate Debtor from being dragged into the Corporate Insolvency Resolution Process mala fide.
The Supreme Court of India issued its first comprehensive ruling on the operation and functioning of the Insolvency and Bankruptcy Code, 2016 in the case of Innoventive Industries Limited vs ICICI Bank Limited.
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.
The purpose of an information memorandum is to support ‘decision making’ and to make a better decision in a particular problem situation that might otherwise have made without the analysis.
Creditors who fails to the submit the claims with proof within 14 days can submit their claims within 90 days from the Insolvency Commencement date as per the amendment of Regulation 12(2).
An insolvency professional shall make a public announcement immediately on his appointment as an interim resolution professional and that the word ‘immediately’ means not later than three days from the date of his appointment.
whereas legislation like RERA provides for individual remedies against the Builder, the IBC Code gives collective control over the affairs and management of the Corporate Debtor to its financial creditors.
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 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