Review of insolvency and bankruptcy law

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The Insolvency and Bankruptcy Code 2016 has evolved enormously since its creation. Through this quarterly journal, the firm aims to share recent updates and landmark judgments relating to the Code.

Collection certificate holder can initiate CIRP as financial creditor under IBC: Supreme Court

The Supreme Court in Kotak Mahindra Bank Limited v A. Balakrishnan & Anr on 30.05.2022 held that a liability in respect of a claim arising from a Certificate of Collection under the collection of debts and bankruptcies would be a “financial debt” within the meaning of section 5(8) of the Insolvency and Bankruptcy Code 2016 and a holder of such a certificate of collection would be a ” financial creditor” under Article 5(7) of the IBC.

Read the full judgment here

The NCLT has the discretion not to grant a financial creditor’s CIRP claim even if the corporate debtor is in default: Supreme Court

On 12.07.2022, the Supreme Court in Vidarbha Industries Power Limited V. Axis Bank Power Limited observed that it is not mandatory for the contracting authority to admit a request to initiate a dispute resolution process. insolvency, even if the debtor company is in default.

Read the full judgment here

NCLT is not a debt collection forum; Operational creditor’s request to initiate CIRP must be denied if debt is disputed: Supreme Court

The Supreme Court on 15.07.2022in SS Engineers &ors. Versus Hindustan Petrole Corporation Ltd said that if the debt is disputed, the request of the operational creditor for the initiation of the CIRP must be rejected Read the full judgment here

Entries in the account book/balance sheet of a debtor company may be treated as an admission of liability for the debt payable to the financial creditor: Supreme Court

The Supreme Court in Asset Reconstruction Company (India) Limited v Tulip Star Hotels Limited overturned the NCLAT decision and observed that entries in a company’s books of account/balance sheet can be treated as an acknowledgment of debt.

Read the full judgment here

Claims arising from the granting of a license/permission to use intellectual property rights constitute an operational debt: NCLAT Delhi on 18.08.2022

On 18.08.2022, in M/S Global Fragrances V. Knight Riders Sports Private Limited, the Main Bench of the National Company Law Appellate Tribunal New Delhi shed light on the status of claims arising from the grant of license/authorization to use the intellectual property and placed it within the framework of operational debt as defined in section 5(21) of the Insolvency and Bankruptcy Code, 2016

Read the full judgment here

KEY CHANGES

On 4-7-2022, the Board of Insolvency and Bankruptcy of India (IBBI) notified the Indian Board of Insolvency and Bankruptcy (Insolvency Practitioners) Regulations (Amendment) 2022 which has made significant amendments to the Indian Board of Insolvency and Bankruptcy (Insolvency Practitioners) Regulations, 2016. Through these Regulations, IBBI imposed duties of impartiality on insolvency professionals.

Read the amendment here.

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