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Day 1 of the much-awaited 4th ILA Conference featured erudite addresses and insights from leading insolvency experts and distinguished dignitaries on insolvency law and policy, global trends in restructuring, the changing geopolitical landscape, and cinema as a lens and mirror for the economy.
Although the respondent acknowledged execution of works, instalments under the Vendor Settlement Agreement remained unpaid. With repeated acknowledgments of inability to pay and only the first tranche settled, default was established under Section 9 of the Insolvency and Bankruptcy Code, 2016.
“The Corporate Debtor in the present case was running into substantial losses which has now become a profit-making entity earning substantial profits. The SRA — JSW invested huge amounts in modernization and expansion of the entity. Not only that but thousands of employees have been earning their livelihood on account of the Corporate Debtor running as an on-going concern due to the Resolution Plan being implemented by the SRA — JSW.”
The judgment reaffirmed the principle that entries in a corporate debtor’s balance sheet can constitute an acknowledgment of liability under Section 18 of the Limitation Act, provided they indicate a subsisting jural relationship between the parties, even if the financial creditor is not named explicitly. The Court emphasised that such entries must be interpreted liberally and in context, considering the overall tenor of the balance sheet and the surrounding circumstances.
In the present case, initiation of the voluntary liquidation was a voluntary commercial decision taken by the shareholders. It is open to the shareholders, where no prejudice is caused to any stakeholder, to reconsider and reverse their decision, particularly when the process has not proceeded to an irreversible stage, such as distribution of assets.
Cyril Amarchand Mangaldas acted as legal counsel to JSW Energy Limited (as successful bidder) for availing credit facility of INR 12,475 Crore from State Bank of India for implementation of resolution plan.
Reiterating that the commercial wisdom of the CoC is to be given paramount importance for approval/rejection of the Resolution Plan, the NCLT held that the Resolution Plans in the present case met the requirements of the IBC and the IBBI Regulations, and thus, had to be approved.
by Mridul Chitransh* and Milan Asati**
The RP sought exclusion of the time it took for NCLT to decide the applications filed under Section 19 of the IBC regarding the non-cooperation by the Company.
“The impugned order is exclusively interlocutory in nature which is yet to be considered on merits and yet to be given a final shape till the conduct of the final hearing when the interim reliefs prayed for, are heard and decided by the Tribunal.”
Enhancing creditor strength through faster debt recovery.
“Section 94 of IBC gives remedy to “debtor’ only to either apply personally or through a Resolution Professional to the Adjudicating Authority for initiating the insolvency resolution process.”
The NCLT gave the first right to buy shares to the petitioners and then the Deccan Group. If neither party purchased the other’s shares, the NCLT would consider winding up the company under Section 242(1)(b) of the Companies Act.
The NCLT acknowledged the impact of force majeure events, particularly the unprecedented rise in coal prices and operational disruptions caused by the COVID-19 pandemic on Corporate Debtor.
“The present one is a case where material facts have not been disclosed by the Applicant Company, violating Section 230 (2)(a) of the Companies Act, 2013, which in our considered opinion is bound to prejudice the public interest at large.”
It is an elementary principle that when a public authority is vested with specific powers, it is duty bound to act accordingly. Therefore, any failure to exercise statutory powers gives rise to a cause of action to secure performance of such duty by way of issuance of writ of mandamus under Article 226.
by Prachi Johri* and Rishi Thakur**
A plain reading of Section 32A IBC reveals that once a resolution plan is approved under Section 31, the Corporate Debtor shall not be prosecuted for an offence committed prior to the commencement of the CIRP. However, this immunity does not extend to the erstwhile officers and persons responsible for the conduct of its business prior to CIRP.
Editorial Board to the NLS Business Law Review is calling for submissions for Volume 11(2) of the Journal