Page 6 - Insolvency And Bankruptcy Code

IBBI mandates timely reporting of insolvency assignments on portal

Regulator IBBI has made it mandatory for insolvency professionals to report their assignments on its electronic portal within the prescribed time to streamline record-keeping. In a circular dated February 11, the insolvency regulator said, "The IPs (insolvency professionals) are mandated to intimate the insolvency and bankruptcy board of India (IBBI) of his/her appointment under various processes under the Code". Currently, the IPs add their assignments on the IBBI portal for appointments for interim resolution professionals (IRPs) or resolution professionals (RPs) under the corporate insolvency resolution process (CIRP), as well as for liquidators in liquidation and voluntary liquidation processes, the Board said. However, there is no requirement for adding assignments relating to RPs under the insolvency resolution of personal guarantors, bankruptcy trustee under the bankruptcy process of personal guarantors and administrator under insolvency and liquidation proceedings of financi

Creditors recover Rs 3.58 trn through resolution plans under insolvency law

Creditors have recovered Rs 3.58 lakh crore through resolution of 1,119 cases under the insolvency law till December 31, 2024, according to official data. Citing data from the Insolvency and Bankruptcy Board of India, Minister of State for Corporate Affairs Harsh Malhotra told Rajya Sabha on Tuesday that 2,707 cases have ended in liquidation orders. "As per information provided by Insolvency and Bankruptcy Board of India (IBBI), till 31st December 2024, 1,119 cases have yielded resolution plans. In these cases, the realisable value for the creditors has been Rs 3.58 lakh crore," he said in a written reply. Final reports have been submitted in 1,274 cases, in which the creditors have realised Rs 0.13 lakh crore, the minister added. According to him, information in respect of amount waived/ forgone in pursuance to the settlement is not maintained. "Realisation under the Insolvency and Bankruptcy Code (IBC) process is market driven and is inter-alia dependent on the quality of assets

NCLT asks BCCI to submit insolvency withdrawal plea before Byju's CoC

On Monday, the NCLT also asked all parties to file their replies concerning allegations that former resolution professional Pankaj Srivastava had failed to discharge his duties properly

NCLT recalls insolvency order against Logix Infra, cites 'mala fide' intent

In a rare move, NCLT has recalled and set aside its own order directing insolvency proceedings against realty firm Logix Infrastructure in July 2023, saying the plea was initiated with "fraudulent and mala fide intentions" and a collusive petition was filed by the financial creditor. NCLT said "there is a nexus and connection" between its financial creditor Experts Realty Professionals whose plea for insolvency was initiated against Logix Infrastructure. The corporate tribunal said the entire transaction was "orchestrated" and forum was used "with purported malicious intent". The insolvency petition filed "with an ulterior motive" against Logix Infrastructure and its financial creditor has used this forum for purposes other than the insolvency resolution of the realty firm with purported malicious intent, contrary to the objectives of the IBC, the tribunal said. The National Company Law Tribunal (NCLT) also asked for a thorough probe by the Serious Fraud Investigation Office (SFIO)

IBBI revises insolvency rules to support homebuyers in resolution process

The Insolvency and Bankruptcy Board of India has amended rules to allow distressed homebuyers to take possession of their properties while the resolution process is ongoing. The amendments, notified on February 3, and effective immediately, aim to enhance efficiency in insolvency proceedings, particularly for real estate projects, by introducing measures such as appointing facilitators, involving land authorities in the process, and ensuring better monitoring of resolution plans, according to an official release. The Insolvency and Bankruptcy Board of India (IBBI) has amended rules governing the corporate insolvency resolution process. One of the important changes empowers resolution professionals after obtaining approval of the Committee of Creditors and upon fulfilment of all obligations can now hand over possession of plots, apartments, or buildings to the homebuyers while the resolution process is still ongoing, the IBBI said. This move is expected to ease the long delays often

IBBI amends standards for info utilities rules to enhance verification

Stricter norms have been put in place for information utilities under the insolvency law to enhance identity verification and streamline the authentication process for financial default records. The Insolvency and Bankruptcy Board of India (IBBI) has amended the guidelines for technical standards governing information utilities, which acts as a repository of financial records related to insolvency proceedings. Amending the guidelines, IBBI on Wednesday said the changes streamline the filing and verification of financial default records by introducing stronger user authentication procedures. "For establishing user's identity during user registration process, IU (Information Utilities) to make use of the facility of demographic authentication of user from UIDAI database. For this purpose, IU shall obtain a Sub - Authentication User Agency (AUA) license from UIDAI," it added. Further, to enhance data integrity, the framework mandates the use of a Permanent Account Number (PAN) or any

Resolution plans with mergers need CCI clearance before CoC approval: SC

SC rules 2:1 that CCI approval for insolvency resolution plans involving mergers must be obtained before CoC approval, setting aside AGI Greenpac's plan for HNGIL's acquisition

RBI supersedes Aviom India Housing Finance's board, appoints administrator

The regulator said it "intends to shortly" initiate the process of resolution of the company under the Insolvency and Bankruptcy Code (IBC)

NCLAT dismisses insolvency plea against HUL, cites pre-existing dispute

The National Company Law Appellate Tribunal (NCLAT) on Monday set aside a plea against HUL, filed by an operational creditor seeking initiation of insolvency proceedings against the FMCG major. The appellate tribunal has upheld an order passed by the Mumbai bench of the National Company Law Tribunal (NCLT), which on September 5, 2024 had set aside a plea filed under Section 9 of IBC by K Lakshmi Narayana, Proprietor of Lalithambica Enterprises, alleging default. The NCLT had found that the sum of the invoices, which was within the three-year limitation period, was less than the threshold limit of Rs 1 crore. Besides, the appellate tribunal noted that HUL's submission relates to a pre-existing dispute, for which a legal notice was issued on January 17, 2019. The decision was challenged before NCLAT, where a two-member bench comprising Chairperson Justice Ashok Bhushan and Member (Technical) Arun Baroka, dismissed it observing the existence of a dispute on claims. "... according to

NCLT approves liquidation of Go First Airways amid insolvency crisis

The NCLT has ordered the liquidation of Go First on a plea filed by the airline's Committee of Creditors; airline faced insolvency proceedings since May 2023 with no revival options

NCLAT restores IFIN's claim in Attivo with 39% vote share in lenders' panel

The National Company Law Appellate Tribunal (NCLAT) has restored claims worth Rs 593 crore of IL&FS Financial Service (IFIN) along with its voting rights in the committee of creditors in the ongoing insolvency resolution process of Attivo Economic Zones. Earlier the interim resolution professional of Attivo Economic Zones, a part of Kolkata-based Srei Infrastructure Finance (SIFL) and in the business of developing managing and marketing industrial parks, had on September 12, 2023, rejected the claims of the IL&FS group entity. IL&FS challenged this before the NCLAT which said it had already passed an earlier order "not permitting collapse of the Agreement with regard to Attivo Economic Zone (Mumbai)". Hence, "the very basis of issuing of letter dated 12.09.2023, rejecting the claim of IFIN is knocked out", said a two-member bench of the NCLAT which also consisted of Chairperson Justice Ashok Bhushan and Member (Technical) Barun Mitra. "The letter dated 12.09.2023, issued ..

NCLAT rejects plea to stay insolvency proceedings against Indrajit Power

The National Company Law Appellate Tribunal (NCLAT) has dismissed a plea to stay the insolvency proceedings against debt-ridden thermal power producer Indrajit Power. The appellate tribunal said "no error has been committed" by the National Company Law Tribunal (NCLT), while admitting the plea to initiate insolvency proceedings against the Maharashtra-based company on February 1, 2024, filed by Yes Bank. The said order passed by the Mumbai bench of NCLT was challenged by Rajiv Munjal, a director from the suspended board of Indrajit Power, before the NCLAT. However, NCLAT upheld the NCLT order observing that it admitted the insolvency plea after finding debt and default which is not even questioned in the appeal filed by the suspended board. "The submission of the appellant (director) that he proposes to enter into settlement, itself makes it clear that debt and default are admitted. In view of the aforesaid, we do not see any good grounds to entertain this appeal," said a two-membe

Supertech lender rejects settlement proposal; NCLAT to decide on insolvency

Punjab & Sind Bank, the lead lender of Supertech Township Projects, has rejected the settlement proposal and NCLAT will now take a final decision on the insolvency of the debt-ridden realty firm. Counsel representing Ram Kishore Arora, the suspended director of the realty firm informed NCLAT on Thursday about the rejection of the settlement proposal. "Counsel for the appellant (Arora) submits that they have received the communication from Punjab & Sind Bank that the proposal submitted by the appellant is not acceptable," noted an NCLAT order recording the submissions. A three-member bench of the National Company Law Appellate Tribunal (NCLAT) said it will have to take a "final decision" in the matter as the appeal has been pending for the last several months. "As a last opportunity, one-week time is allowed to the appellant," said NCLAT directing to list the matter on January 23 for the next hearing. Supertech Township Projects is developing a Group Housing Project - Golf ...

NCLT directs initiation of insolvency proceedings against Hero Electric

The National Company Law Tribunal (NCLT) has directed initiation of insolvency proceedings against Hero Electric after admitting a plea filed by Metro Tyres, an operational creditor claiming a default of Rs 1.85 crore. As per provisions of the Insolvency & Bankruptcy Code (IBC), NCLT has appointed Bhoopesh Gupta as Interim Resolution Professional to run the company after suspending the board of Hero Electric. The Delhi-based bench of NCLT rejected the contentions of Hero Electric of a pre-existing dispute with the operational creditor saying that it was "not just a moonshine or feeble legal argument". The objections raised by Hero Electric are not found "tenable in law" and have been duly negated by Metro Tyres, which had supplied tyres and tubes to the company. "In the facts and circumstances of the instant case, we are of the view that the corporate debtor has not been able to raise a plausible contention regarding the pre-existence of dispute between the parties. Hence, the ...

NPA cases referred for resolution, amount involved drop in 2023-24

As a result, the amount involved and the amount recovered in absolute terms was also lower than the amount involved and recovered in 2022-23

NCLAT refuses to limit insolvency process of Spaze Towers to one project

Appellate tribunal NCLAT on Tuesday dismissed the plea filed by the former promoters of realty firm Spaze Towers to confine the Corporate Insolvency Resolution Process to only one project -- Spaze Arrow. The National Company Law Tribunal (NCLT), on October 21, 2024, directed the initiation of insolvency proceedings against Spaze Towers, admitting a plea filed by its flat owners. Appealing against the order, the former management approached the National Company Law Appellate Tribunal (NCLAT), requesting to confine the CIRP process to only one project. However, the appellate tribunal rejected it, saying, "When the claimants have filed claims for the Project Corporate Park, which is not complete despite the Occupancy Certificate and Completion Certificate, by confining the CIRP to only one Project shall be tantamount to excluding the claims filed before the RP from different Project". "We, thus, after considering the facts and circumstances, which have been brought on the record by th

SC calls out gaps in IBC, calls for more oversight of creditors' committee

The recent Jet Airways' liquidation case prompted the apex court to highlight how tribunal members often lack the domain knowledge required in high-stakes insolvency matters

NCLAT rejects Jaiprakash Associates' petition challenging insolvency

The National Company Law Appellate Tribunal (NCLAT) on Friday rejected Jaiprakash Associates Ltd's petition challenging the insolvency proceedings initiated against the company. While upholding an earlier order, the appellate tribunal NCLAT observed mere pending of loan restructuring arrangement with the lender before NCLT does not debar the creditors to file insolvency proceedings under section 7 of Insolvency & Bankruptcy Code 2016. A three-member bench led by Chairperson Justice Ashok Bhushan has upheld the order passed by the National Company Law Tribunal (NCLT), which had directed initiating the Corporate Insolvency Resolution Process (CIRP) against the company. The appellate tribunal said "after answering all the issues, we are of the view that no grounds have been made out to interfere in order of NCLT". The OTS (one-time settlement) proposal submitted to NCLT and as well as before this tribunal on behalf of JAL contains the "clear acknowledgment of debt" and ...

Govt working on integrated platform to speed up resolution processes

The government is working on an integrated platform for the insolvency ecosystem covering key stakeholders that will also help speed up resolution processes. The Insolvency and Bankruptcy Code (IBC), which came into force in 2016, aims to provide market-linked and time-bound resolution of stressed assets. However, there have been delays in the resolution process. Anita Shah Akella, Joint Secretary at the Ministry of Corporate Affairs (MCA), on Tuesday emphasised that IBC is not a recovery mechanism but a rescue mechanism. She was speaking at a conference in the national capital to mark the eighth annual day of the Indian Institute of Insolvency Professionals of ICAI. While mentioning various steps taken and also being planned to further improve IBC resolutions, she said the ministry is working on having an integrated platform for the insolvency ecosystem. "(It will be a) federated architecture that will push and pull data as and when required," she noted. The platform will connec

Creditors recover Rs 3.55 trn through resolution of 1,068 cases till Sep

Creditors have recovered around Rs 3.55 lakh crore through resolution of 1,068 cases under the insolvency law till September this year, the government said on Monday. In a written reply to the Lok Sabha, Minister of State for Corporate Affairs Harsh Malhotra also said that a total of 1,963 CIRP cases are ongoing and out of them, 1,388 have exceeded the time limit of 270 days. CIRP refers to Corporate Insolvency Resolution Process. The minister emphasised that realisation under the IBC is market driven and dependent on quality of assets at the time of resolution. "A total of 1,068 cases have been resolved under the Insolvency and Bankruptcy Code, 2016 (IBC) leading to a recovery of about Rs 3.55 lakh crore to the creditors since inception of IBC till September 2024," he said. So far, six amendments have been made to the IBC to strengthen the resolution process and to ensure proper implementation of provisions of the law. The Insolvency and Bankruptcy Board of India (IBBI) has made