Title: Understanding of the IBC, 2016.

Author: Kunam Shreya Reddy

Abstract
The corporate insolvency resolution process(CIRP) in India has in the past involved the
simultaneous operation of several statutory instruments. These include the Sick Industrial
Companies Act, 1985, the Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002, the Recovery of Debt Due to Banks and
Financial Institutions Act, 1993, and the Companies Act, 2013. Broadly, these statutes
provided for a disparate process of debt restructuring, and asset takeover and realization in
order to facilitate the satisfaction of outstanding debts. As is evident, the inefficient dealing
with insolvency and liquidation led to immense confusion in the legal system, and there was
an increased necessity to modify the insolvency process. All of these multiple legal
procedures and a court system led to India witnessing a huge piling up of non-performing
assets, and creditors waiting for years to recover their money. The Bankruptcy Code is an
effort to reform the corporate insolvency process, in order to allow credit to flow more freely
and inculcating faith in investors for speedy disposal of their claims. The Code combines the
existing laws relating to insolvency of corporate firms and individuals into a single
legislation. The Code has unified the law relating to the enforcement of statutory rights of
creditors and modifies the manner in which a debtor company can be revived to sustain its
debt without suppressing the rights of creditors. To explain the Insolvency and Bankruptcy
Code which is the cornerstone of CIRP various cases under different benches have been
explained in the paper to understand the rights of various parties in initiating the Corporate
insolvency resolution process and how does it benefit the companies involved in it.

Key Words: Corporate Insolvency Resolution Process(CIRP), Debt Restructuring,

Liquidation, Insolvency And Bankruptcy Code.

1. Introduction
The object of the present Insolvency and Bankruptcy Code ,2016 is to consolidate the
existing framework by creating a single law for Insolvency and Bankruptcy.It has replaced
the long tedious and complex legal process by a speedy and effective mechanism for recovery
of dues from corporate and non –corporate debtors. With almost two years since the
introduction of the Insolvency and Bankruptcy Code, 2016 (―IBC‖ and ―Code‖), there have
been various challenges in the effective implementation of the Code. However, constructive
interpretation by the judiciary coupled with effective amendments to the Code has helped in
eliminating many of these budding issues. The Insolvency and Bankruptcy Board of India
(―IBBI‖) which is the regulatory and supervisory body in charge of the IBC, has done a
commendable job in proactively spreading awareness and regulating the space. Many
important judgments were pronounced throughout the year, including certain landmark cases,
where the Supreme Court has tried to ensure that the spirit of the Code is given primacy over
procedural requirements.

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I. Applicability
The Code provides creditors with a mechanism to initiate an insolvency resolution
process if a debtor is unable to pay its debts. The Code makes a distinction between
Operational Creditors and Financial Creditors. A Financial Creditor is one whose
relationship with the debtor is a pure financial contract, where an amount has been
provided to the debtor against the consideration of time value of money (―Financial
Creditor‖). Recent reforms have addressed the concerns of homebuyers by treating
them as ‗financial creditors‘. In the absence of the applicants having a clear status as
to whether the applicant is a financial or an operational creditor, there may be
uncertainty about their priority when receiving dues from the insolvency proceedings.
An Operational Creditor is a creditor who has provided goods or services to the
debtor, including employees, central or state governments (―Operational Creditor‖). A
debtor company may also, by itself, take recourse to the Code if it wants to utilize the
mechanism of revival or liquidation. In the event of inability to pay creditors, a
company may choose to go for voluntary insolvency resolution process – a measure
by which the company can itself approach the NCLT for the purpose of revival or
liquidation.

II. Institutional Framework

The Board will regulate insolvency professionals, insolvency professional agencies and
information utilities set up under the Code. The Board will consist of representatives of
Reserve Bank of India, and the Ministries of Finance, Corporate Affairs and Law. It Includes:
a.Insolvency Professionals: A specialized cadre of licensed professionals is proposed to be
created. These professionals will direct the resolution process, manage the assets of the
debtor, and provide information for creditors to assist them in decision making.
b.Insolvency Professional Agencies: insolvency professionals will be registered with
insolvency professional agencies. The agencies conduct examinations to certify insolvency
professionals and enforce a code of conduct for their performance.
c.Information Utilities: Creditors will report financial information of the debt owed to them
by the debtor. Such information will include records of debt, liabilities and defaults.
Features of IBC
•Exclusive Jurisdiction of Adjudicating Authority: Adjudicating Authority (NCLT and DRT)
will have exclusive jurisdiction in insolvency-related matters. No ruling can be granted by
any Civil Court, Tribunal or Authority in respect to action taken by Adjudicating Authority.
•Appointment of Registered IPs: The board of directions are suspended and creditor approved
resolution professional is appointed to manage the Company as a going concern.

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•Committee of Creditors: A committee of creditors is formed and it will work along with
Insolvency Professional.
•Time-bound Resolution Process: The entire process should be completed within 180 days
(270 days in case of extension).
•Duties and Functions of Insolvency Professional (IP):
a) To take reasonable care and diligence while performing his duties b) To comply with all
requirements and terms and conditions specified in the bye-laws c) To submit a copy of the
records of every proceeding before the Adjudicating Authority to the Board as well as to the
insolvency professional agency of which he is a member d) To perform his functions in such
manner and subject to such conditions as may be specified.

III. Framework of the code

All proceedings under the Code in respect of corporate insolvency are to be adjudicated by
the NCLT, which tackles all aspects of insolvency resolution. The NCLT is referred to as the
Adjudicatory Authority in relation to the insolvency of corporate persons under the Code. No
other court or tribunal can grant a stay against an action initiated before the NCLT. Appeals
from the orders of the NCLT lie before the National Company Law Appellate Tribunal
(―NCLAT‖). All appeals from orders of the NCLAT lie to the Supreme Court of India. The
jurisdiction of civil courts is taken away by the Code with regard to matters addressed by the
Code.
The provisions of this Code apply to— (a) any company incorporated under the Companies
Act, 2013 or under any previous company law; (b) any other company governed by any
special Act for the time being in force, except in so far as the said provisions are inconsistent
with the provisions of such special Act; (c) any Limited Liability Partnership incorporated
under the Limited Liability Partnership Act, 2008; (d) such other body incorporated under
any law; and (e) partnership firms and individuals, in relation to their insolvency, liquidation,
voluntary liquidation or bankruptcy, as the case may be.

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2. Insolvency Resolution Process

I. Initiation by Financial Creditor

A Financial Creditor may by itself or jointly with other financial creditors or any other person
on behalf of the financial creditor, as may be notified by the Central Government, seek to
initiate Insolvency Resolution Process by filing an application before the NCLT, once a
default has occurred. Interestingly, under the Code, the adjudication process in respect of a
Financial Creditor does not require a notice to be served on the debtor. However, the
Supreme Court has in its judgement of Innoventive Industries v IDBI Bank made it
mandatory for a notice to be served on the debtor, as well as to provide the debtor with the
right to be heard. The Code provides that within fourteen days of an application having been
filed, NCLT shall ascertain the existence of the debt and default and either admit or reject the
application, after which consequences under the Code would follow. Where the application
itself is incomplete or suffers from other defects, the application may be rejected. The
Bankruptcy Code does not mention the degree of proof required for the NCLT to ‗ascertain‘
default in respect of a debt owed by a debtor. Neither does the Bankruptcy Code provide an
indication of the nature of satisfaction that is required by the NCLT with respect to the
existence of a default. However, the Supreme Court in Innoventive Industries v IDBI Bank
has stated that the NCLT has to only ascertain the existence of the outstanding debt in respect
of which there has been a default and not deliberate into its extent or composition. From the
experience so far, it can be noted that the NCLT would generally admit an application if it is
compliant with the provisions of the Bankruptcy Code, despite having the discretion to
entertain other considerations.

II. Initiation by an Operational Creditor

The Bankruptcy Code has laid down a two-step process for the initiation of insolvency
proceedings by an Operational Creditor. An Operational Creditor would upon the occurrence
of default have to demand payment of the unpaid debt. The Corporate Debtor may within 10
days of receipt of the Demand either Dispute the debt or pay the unpaid debt. If the corporate
debtor does not reply or repay the debt, an application could be filed by the Operational
Creditor before the NCLT to initiate Insolvency Resolution Process. However, the existence
of a dispute can act as a barrier to such an application. The term ―dispute‖ may include a suit
or arbitration proceedings relating to (a) the amount of debt; (b) the quality of goods or
service; or (c) the breach of a representation or warranty.

III. Initiation by a Corporate Applicant

In the case of default by the corporate debtor, the corporate applicant may file an application
for the initiation of insolvency proceedings. The applicant must submit information relating
to the books of account and the Resolution professional to be appointed. Additionally, a
special resolution must be passed by the shareholders of the corporate debtor or a resolution

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must be passed which should be approved by at least three-fourths of the total number of
partners for approving the resolution process.

IV. Corporate Insolvency Resolution Process

Step 1: Application to the NCLT
A financial or operational creditor of a company, or the company itself, can apply to the
National Company Law Tribunal (NCLT) for an order to admit that company (Corporate
Debtors) into the corporate insolvency resolution process (CIRP). The creditor has to show
that there has been a default in the payment of its debt exceeding 1 lakh rupees. The NCLT
has to pass an order either admitting or denying the application within 14 days although
NCLAT said that it is directory.
Step 2:CIRP starts; Interim Resolution Professional takes over; moratorium sets in
•Corporate debtor is admitted into the CIRP.and the board of directors is suspended and its
management is placed under an independent ―interim resolution professional‖.Until the end
of the CIRP, the erstwhile management ceases to have any control over the affairs of the
company.and finally, moratorium takes effect.
Step 3 – Verification and classification of claims, the appointment of the resolution
professional:
•The IRP invites and verifies claims made by the corporate debtor‘s creditors .within 30 days
of the admission into CIRP, the Committee of Creditors (COC), comprising all the financial
creditors of the corporate debtor is formed.
Step 4 – Appointment of the resolution professional
•The COC then appoints a person to function as the ―resolution professional‖. He may be the
same person as the interim resolution professional, or someone else, depending on the needs
of COC.
Step 5 – Approval of the ―resolution plan‖ or liquidation
•Within 180 days from the start of the CIRP, a resolution plan needs to be approved by
creditors holding 75% of the financial debt. The NCLT can extend this period by another 90
days provided a plan is submitted within the initial 180 days. Any person, including the
former management, the creditors, or a third party can propose such a plan. If a plan is
approved within this period and is sanctioned by the NCLT, it is adopted and becomes
binding on all ―stakeholders‖ involved in the CIRP. And if no resolution plan is approved in
this period, the NCLT is required to order the liquidation of the corporate debtor. If an order
of liquidation is passed, a liquidator will be appointed by the COC to sell the assets of the
corporate debtor and distribute the assets among the stakeholders. The distribution will be
made in accordance with a ―priority waterfall‖ set out in Section 53 of the IBC.

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 3. Analysis
After studying the different cases under IBC, 2016 a summary of 30 different cases under
different heads is been made to gain an insight into the rights of different creditors in
initiating the corporate insolvency resolution process, the effect of existing disputes between
the parties during CIRP, the time limit for submitting the resolution plan, the rights of
resolution applicants.
The different heads are as follows:
A. IBC Case laws- Relating to Dispute
B. IBC Case laws- Liquidation
C. IBC Case laws- Moratorium
D. IBC Case laws- Nature of Creditors
E. IBC Case laws-Parallel Initiation of CIRP
F. IBC Case laws- Resolution Plan
G. IBC Case laws- Resolution Professional
H. IBC Case laws- Tax
I. IBC Case laws- Winding up
J. IBC Case laws- Withdrawal
K. IBC Case laws- Other Cases

A. IBC CASE LAWS- RELATING TO DISPUTE

S. No Date of Bench Locatio Petitioner Respondent Fact of the case order Pronounced
Order Name n

1 14-08-2018 NCLAT Delhi Jagmoha Shivam Financial Creditor NCLAT said that
n Bajaj- Fragrances filed a case for non the existence of
Share Private payment of debt by internal dispute
holder of Limited Corporate Debtor. does not effect the
Corporate (Respondents The arbitral Initiation of CIRP
debtor / Corporate proceeding in 2016 by the financial
Debtor), was in favor of creditors and also
Amiga financial creditor imposed a fine of 1
Informatics(F .Though the lakh on Shivam
inancial Corporate debtor did Pvt Ltd.
Creditor) not dispute the
existence of the
arbitral award they
question the legality
of initiation of CIRP
by Financial Creditor
when there is an
internal dispute
among directors?

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2 13-11-2018 NCLAT Delhi Sudhi APPL An appeal has been NCLAT held that
Sachdev- Industries preferred by the pendency of
Corporate Limited Corporate debtor dispute amounts to
Debtor (Respondent - against the acceptance of debt
Operational moratorium issued by and it is not a
Creditor) the adjudicating dispute. So, the
authority. The order of
corporate debtor moratorium is
submits that there is applicable.
an existence of
dispute , so the
moratorium cannot be
issued.

3 6/7/2018 NCLAT New Aditya Rajratan Aditya Enterprises The adjudicating

Delhi Enterpris Exim Pvt. filed an application authority said that
es Ltd- due to non payment mere receipt of a
Corporate of debt owed to them loan cannot be
Debtor by corporate debtor treated to be an
operational /
Financial debt but
the purpose of the
loan is also
important. As the
receipt does not
mention that
corporate debtor
has taken the loan
for the purpose of
business. The
existence of
dispute does not
give the question
of existence of
default, there is no
evidence as to the
existence of due .

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 B. IBC CASE LAWS- LIQUIDATION

S.no Date Bench Loca Petitioner Responden Fact of the case Order pronounced
of Name tion t
Order

4 27-02- NCLAT Delhi Y. S. In the absence of The NCLAT

2019 Shivram Dhanapal approved resolution declared that at this
Prasad & & Ors.- plan for Corporate stage i.e. after the
Ors.- Corporate Debtor even after completion of 270
Promoter Debtor completion of 270 days days either
NCLT passed order for liquidation can be
liquidation. The carried out or the
Promoter said that the liquidator can sell
order was unreasonable the business of the
and that time should corporate debtor as
be given to the a going concern
promoters to pay off
the debts

5 26-03- NCLT Allah Bank of Rotomac The resolution The resolution for
2018 abad Baroda Global Pvt. professional extension of CIRP
Ltd and recommended the coc failed as there was
Rotomac for the extension of 90 no resolution plan
Exports Pvt days for the CIRP . But within the 180 days
Ltd - it was voted against by of initiation of
Corporate the COC. So, the RP CIRP. So, the
debtor filed for liquidation of liquidation of
the corporate debtor. corporate debtor
was admitted.

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 C.IBC CASE LAWS- MORATORIUM

S. Date of Bench Location Petitioner Respondent Fact of the case order Pronounced
No Order Name

6 14-08- Suprem Delhi SBI- Ramakrishn Corporate Debtor initiated The supreme Court
2018 e Court Corporat a -Personal CIRP and entered the held that the period of
e Debtor Guarantor moratorium period and the moratorium under
personal guarantor argued Section 14 of the IBC
that the moratorium period will not be applicable
will be applicable to him too to personal Guarantor

7 23-10- Suprem Delhi Alchemis M/s Hotel Arbitration was initiated by Supreme court has
2017 e Court t Asset Gaudavan Alchemist during the ruled that arbitration
Reconstr Pvt ltd- moratorium period of the proceedings initiated
uction Corporate corporate Debtor, will it be after the imposition
Debtor applicable? of the moratorium
under Section 14 of
the Insolvency and
Bankruptcy Code,
2016 (―IBC‖) is non
est in law.

8 31-07- NCLAT Delhi Shah P. Shah Brothers filed a The proceeding cant
2018 Brothers Mohanraj & criminal Proceeding against be filed under section
Ispat Pvt. Ors.- Corporate Debtor during the 14 of the IB code
Ltd. Directors of moratorium period will it be
Corporate applicable?
Debtor

9 8/3/201 NCLT Mumbai Andhra Provogue Application filed by The tribunal holds
9 Bank, (India) Resolution professional for that the payment
Amit Limited- the encashment of refund on received by financial
Gupta- Corporate account of post dated creditor from
Resolutio Debtor cheques from financial corporate debtor by
n SREI creditor during the CIRP issue of post dated
Professio Infrastructu which were issued before cheques in 2015
nal re Finance the admission of petition for during CIRP is
Limited - CIRP effected by
Financial moratorium and
Creditor financial creditor is
directed to repay the

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 amount.

D. IBC CASE LAWS- NATURE OF CREDITORS

S. Date of Bench Location Petitioner Respondent Fact of the case order Pronounced
No Order Name

10 21-07- NCLA Delhi Nikhil AMR Nikhil &Sons filed an NCLAT declared that
2017 T Mehta Infrastructu application under Nikhil &Sons were playing
&Sons re Ltd- Section 7 to deem the role of investors , there
Corporate themselves as was a debt under
Debtor Financial creditors and section(5)8 of IBC and
for their rights to Nikhil& Sons were
initiate CIRP process declared as Financial
on default of payments Creditors
from Corporate Debtor

11 30-04- Suprem Delhi JK Jute Juggilal Trade Union issued a The supreme court has
2019 e Court mill Kamlapat demand notice on declared that a trade union
Mazdoor Jute Mills behalf of 3000 for the purpose of
Morcha- Ltd- workers on account of declaring insolvency can
Trade Corporate section 8 of the code be an operational creditor
Union Debtor for outstanding dues of and can issue demand
the workers , Can a notice on behalf of the
trade union act as an workers.
operational creditor
and issue demand
notice on behalf of the
workers?

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12 5/2/2019 NCLT Mumbai Dr. CS Prakash Dr. Ramakanth claims The mere fact that there
Ramakant K. to be the financial was no express agreement
Suryanath Pandya- Creditor and asks the as to financial debt does
Pande - Resolution Corporate debtor for not mean that it is quasi
Financial Professiona the repayment of loan. capital, it is also to be
Creditor l Chaubey Resolution noticed that the role of a
Milestone Realties professional says that Resolution Professional is
Real Private he has treated the just verifying and not
Estate Limited - amount advanced by enquire into the factual
Fund - Corporate Milestone real estate scenario between the
Financial Debtor in the nature of quasi parties. The tribunal
Creditor capital and challenges declared the debt to be a
the application filed. financial debt and the
applicant to be considered
as financial creditor for the
further process of CIRP.

13 22-02-2019 NCLT New M/s. Mansfield An application is The explanation given is

Delhi Khandelwal Cable filed by creditor that the payment made to
Busar Company to admit the corporate debtor is an
Industries Limited - claim amount advance and need not be a
Pvt. Ltd- Corporate along with financial debt and the mere
Creditor Debtor interest, join the inclusion of interest doesnot
COC make creditor a financial
creditor, but is included in
other categories of creditors
.so, the payment should be
made to the creditor as per
the code.

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14 5/7/2018 NCLAT New Mitcon Vitthal Appeal has been The tribunal is of the view
Delhi Consultanc Corporation preferred by that NCLT wrongly rejected
y& Ltd. operational the appeal by operational
Engineering creditor against creditor claiming legal
Services the order passes expenses as there was no
Ltd.- by NCLT dispute prior to the issuance
Operational rejecting the of demand notice.
Creditor application on
the ground that
appellant has
claimed legal
expenses.
Respondent
submits that they
have disputed the
claim in response
to the demand
notice.But there
is no proof of
existence of
dispute prior to
issuing demand
notice.

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 E. IBC CASE LAWS- PARALLEL INITIATION OF CIRP

S. Date of Bench Location Petitioner Respondent Fact of the case order Pronounced
No Order Name

15 6/2/2018 NCLT Mumbai Jai Ambe S.N Plumbing The resolution The tribunal said that it
Enterprise- Pvt Ltd- professional of is a rightful action by
Operational Corporate corporate debtor the resolution
Creditor Debtor filed a petition professional of
Mr.Sanjay against a corporate debtor to
Kumar - Respondent initiate CIRP against
Resolution debtor which has the corporate debtor of
Professional a debt due to be S.N plumbing as an RP
,IL&FS paid to it, for the has all the rights to
Engineering initiation of CIRP cover outstanding debts
&Construction to an operational owed to the corporate
Team- debt. Whereas debtor .Hence, it is
Respondent the CIRP of approved.
Debtor of S.N corporate debtor
Plumbing is already in
process.

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 F. IBC CASE LAWS- RESOLUTION PLAN

S. Date of Bench Location Petitioner Respondent Fact of the case order Pronounced
N Order Name
o

16 5/2/2019 Supreme Delhi K. Sashidhar- Indian Overseas The NCLT has the The supreme court
Court Resolution Bank & Ors. jurisdiction and declared that
Professional authority to NCLT has no
analyze or jurisdiction
evaluate the
commercial
decision of the
CoC to enquire
into the justness or
the rejection of the
resolution plan by
the creditors

17 5/7/2018 NCLAT New Tomorrows Rajiv Khurana- Resolution The tribunal

Delhi Sales Agency R.P. for Power Applicant declared that the
Pvt. Ltd.- Himalayas Ltd. challenged the amended
Resolution & order passed by resolution plan
Applicant Ors.(Corporate NCLT rejecting was approved by
Debtor) the resolution the coc and it
plan. should not have
been rejected by
NCLT. So,
Resolution
applicant can carry
on with the
resolution plan.

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 G.IBC CASE LAWS- RESOLUTION PROFESSIONAL

S. Date of Bench Location Petitioner Respondent Fact of the case order Pronounced
No Order Name

18 28-02-2018 NCLAT Kolkata Sandeep Stewarts & Corporate Debtor to Adjudicating Authority
Kumar Lloyds of change the RP was not satisfied with
Gupta- RP India Ltd. & though there was no the performance of the
Anr.- default on the RP'S ‗Resolution
Corporate side, but no Professional‘, we hold
Debtor resolution plan was that the Adjudicating
submitted, is it Authority was well
possible to change within its jurisdiction to
the RP? engage another person
as ‗Resolution
Professional‘ or
‘Liquidator‘

19 12/11/2018 NCLT New Hitech M .I. Operational Creditor The tribunal agreed on
Delhi Enterprise Buildtech filed a petition appointing Mr . Anil as
s- Pvt Ltd pointing out the error the Resolution
Operation in appointing the Professional as his
al Interim resolution name was suggested by
Creditor professional ( operational creditor and
Hemant Sharma). also the period from the
Though the name of date of order
Mr . Anil Tayal was 30.10.2018 till
suggested by appointment of Mr .
operational creditor. Anil is excluded from
Will Mr . Anil be the CIRP of 180 days.
appointed as the
Resolution
Professional.

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 H. IBC CASE LAWS- TAX

S. Date of Order Bench Location Petitioner Respondent Fact of the case order Pronounced
No Name

20 20-03-2019 NCLAT New Sales Tax Parte The appellant filed The tribunal
Delhi Departmen Casters Pvt against the judgement declared that
t, State of Ltd & Ors.- of the NCLT which operational debt is a
Maharashtr Corporate approved the resolution debt arising out of
a and Ors. Debtor plan though the tax the operations of the
dues were settled at 1 company. In this
% against the case also, the tax
Corporate Debtor and arises only when the
the other questions company is a going
raised were if Income concern . So, tax
tax, Value added tax or can be taken as an
other statutory dues operational debt and
come with the meaning for the same reason
of operational debt and Central Government
whether Central or State
Government, State Government with
government with statutory dues are
statutory claims operational
classify as operational creditors.
creditors?

I. IBC CASE LAWS- WINDING UP

S. Date of Bench Locatio Petitioner Respondent Fact of the case order

No Order Name n Pronounced

21 29-01-2019 Supreme New Swaraj Kotak Secured Creditor advanced The Hon'ble
Court Delhi Infrastruc Mahindra loans to various companies , court following
ture Pvt Bank Ltd- due to non payment of debt due the Recovery of
Ltd Secured to them , bank approached Debt and
Creditor Debt Recovery Tribunal Bankruptcy Act
.Following this, recovery said that secured
certificates have been issued. creditors can
As no payments were initiate Winding
forthcoming it filed a petition up procedure
with the high court . The main even after
argument from the bench of obtaining
high court was that once a recovery

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 secured creditor has obtained certificates from
an order from DRT and a the DRT.
recovery certificate has been
issued thereupon, can not file a
winding up petition even
without giving up its securities.

22 12/12/2018 Supreme New Jaipur Jaipur Employee Union made an The Supreme
Court Delhi Metal Metal and appeal against the judgement of court found fault
and Electricals the Rajasthan high court which in the decision of
Electrical Ltd refused to transfer the winding the high court
s up proceedings to the NCLT. which set aside
Employe In 2018, one of the financial the order under
es creditors of the company filed section 7 of the
Organizat an application for initiation of IBC. It declared
ion- CIRP ,which was agreed upon that the decision
Employe by the NCLT but was stayed in of NCLT stays.
e Union the high court.

23 30-05-2018 NCLT New Indiabull Shree Ram Indiabulls housing finance filed NCLAT declared
Delhi s Urban an application under section 7 that CIRP cannot
Housing Infrastructu of IBBI for initiation of CIRP be initiated
Finance re Ltd- against corporate debtor. The against a
Ltd Corporate NCLT objected on the grounds company , where
Debtor that winding up order has winding up order
already been initiated against has been passed
corporate debtor. So. Indiabulls in the high court.
approached NCLAT

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 J. IBC CASE LAWS- WITHDRAWAL

S. Date of Bench Location Petitioner Respondent Fact of the case order Pronounced
No Order Name

24 8/3/2019 NCLAT Delhi Liberty ARGL Ltd. The Resolution NCLAT allows
House & Anr.- Professional of corporate withdrawal of
Group Corporate debtor filed a case with Liberty house bid for
Pte. Ltd. Debtor the NCLT to cancel the ARGL and it upheld
bid, so acting upon this the previous order of
NCLT had imposed a cost the NCLT , which
of 1lakh on liberty house. had imposed a cost
Being agitated by this of Rs.1 Lakh on
charges , Liberty house Liberty house and
filed an application with also deduct the time
the NCLAT period spent on the
resolution plan

25 9/10/2018 NCLT Bangalo Indian Aeromech The case for initiation of The Adjudicating
re overseas Technologie CIRP is in process.While Authority approved
bank- s Pvt Ltd- pending the resolution the withdrawal of
Financial Corporate professional seeks for petition on the
Creditor debtor withdrawal of the petition. grounds that the sole
Mr.Balad financial creditor
y- received 100%
Resolutio voting share for the
n withdrawal of the
Professio petition
nal

26 9/7/2018 NCLT New M/S M/s Operational creditor Ltd The tribunal said that
Delhi Gagan Morrpheus wants to put an end to the the unilateral
Ferrotech Developers CIRP as their debt has decision of
Ltd- Pvt Ltd- been extinguished operational creditor
Operatio Corporate Ltd is not sufficient
nal Debtor but can be withdrawn
Creditor with 90% of voting
share by the COC.

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 K. IBC CASE LAWS- OTHER CASES

S. Date of Bench Locatio Petitioner Respondent Fact of the case order Pronounced
No Order Name n

27 11/10/20 Supreme Delhi B. K. Parag Gupta The question raised by NCLAT declared
18 Court Education and appellant is will limitation that limitation act
al Services Associates Act,1963 be applicable to will be applicable to
Private applications that are made the present cases.
Limited- under section 7 and or
Appellant section 9

28 31-01- Supreme New Vijay Standard The director of the The supreme court
2019 Court Delhi Kumar Chartered company has filed a case held that as per the
Jain- Bank & in the supreme court code the directors
Resolution Ors- against the judgement of though not members
Profession Financial NCLT, which rejected the of the COC can
al Creditor right to participate in the attend the meetings
COC and get access to all and have every right
the documents along with to receive all the
the resolution plan. documents relating
to resolution plans.

29 6/3/2018 NCLAT New SBI - SKC Retails Financial creditor who is The appellate
Delhi Financial Ltd & Ors.- a member of the tribunal said that the
creditor Corporate Committee of creditors applicant who
Debtor filed an application suggests the name of
against the judgement off the resolution
the NCLT. Financial professional to be
Creditor says that COC is appointed pays the
not liable to pay the fees expenses, which is
of the interim resolution later reimbursed by
professional the COC.

Electronic copy available at: https://ssrn.com/abstract=3425370

30 9/5/2019 NCLAT New Aasaan Vasudevan Financial Creditor filed According to the
Delhi Global & Ors- application before NCLT definition of related
Trade- Financial that Respondent being a party ,it is supposed
Financial Creditor to financial creditor is a to be a person on
Creditor Corporate related party of corporate whose direction,
debtor debtor and should not be advice the director,
a member of the COC. manager or partner
But NCLT, rejected it on of the Corporate
the grounds that debtor is supposed
respondent Mr. Poobalan to act. But this
is not a related party. cannot be applied to
this case as under
agreement financial
creditor is not
supposed to give
advice but work
under the directions
of the Corporate
debtor.

4. CONCLUSION
The IBC has taken steps to improve the process of insolvency process in india.
Though in the nascent stages it faced a lot of criticism and controversies now it has
become a very important for banks to regularize the multitudes of non-performing
assets which are hindering the growth of our economy. The IBC has bought a number
of changes to the insolvency laws and aimed at reducing the amount of bad loans.
The number of companies that have benefitted from this this law is large, there has
been improvement in the speed as well as the success rate of the resolution process.

References

1. https://taxguru.in/corporate-law/critical-issues-insolvency-bankruptcy-code-
2016.html
2. https://www.slideshare.net/HarveerSingh5/bankruptcy-code-india
3. https://yourstory.com/2016/05/new-bankruptcy-code-india-startups
4. https://www.manifestias.com/2019/02/22/insolvency-and-bankruptcy-code/
5. https://www.slideshare.net/RBSAIndia/insolvency-and-bankruptcy-code-2016-
71816966
6. https://ibbi.gov.in/legal-framework/act
7. https://www.caclub.in/govt-notifies-insolvency-and-bankruptcy-code-2016/
8. http://blog.mylaw.net/5-steps-liquidation-resolution-indias-new-insolvency-law/

Electronic copy available at: https://ssrn.com/abstract=3425370

Electronic copy available at: https://ssrn.com/abstract=3425370