In IBC, no automatic secured creditor tag for govt's statutory dues

The government’s statutory dues can be treated in the same way as secured creditors’ dues only in cases where there is a written documentary transaction classifying them as such under the Insolvency and Bankruptcy Code, a senior government official told Business Standard.

The Ministry of Corporate Affairs (MCA) would consider issuing this as a clarification, if needed, following the recent Supreme Court (SC) judgment in the Rainbow Papers case, the senior official said.

On October 31, an SC Bench in the Rainbow Papers case dismissed petitions seeking a review of its earlier order, which held that state-level tax authorities would enjoy parity