Thursday, September 18, 2025
  • Login
Euro Times
No Result
View All Result
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology
Euro Times
No Result
View All Result

ibc: SC order on IBC jolts bankers, lawyers

by Euro Times
August 21, 2022
in Finance
Reading Time: 3 mins read
A A
0
Home Finance
Share on FacebookShare on Twitter


An apex court docket order giving the Nationwide Firm Regulation Tribunal (NCLT) discretion over admission of insolvency circumstances even when default is confirmed has shaken bankers and attorneys.

They stated the ruling might deflate an already delayed course of below the Insolvency and Chapter Code (IBC) and can almost certainly be utilized by unscrupulous promoters to argue towards the admission of circumstances, probably denting the efficiency of the devoted restoration mechanism.

Shiju P Veetil, senior associate, IndiaLaw LLP, stated the court docket order has the potential to trigger long-lasting hurt to the IBC as circumstances will not be admitted, taking the system again to days earlier than the code got here into being.

“Earlier, collectors have been required to show the lack of debtors to confess a winding up petition. IBC modified this criterion as collectors have been solely required to show the existence of debt and default in cost to confess an insolvency case,” Veetil stated. “Sadly, the Supreme Court docket judgement takes jurisprudence again to the sooner regime, and now the creditor is required to show the lack of the debtor to pay the debt, together with the feasibility of initiating the method. It will make IBC extra contentious and fewer efficient.”

Final month, in a case involving thermal energy firm Vidarbha Industries Energy (VIPL), the apex court docket dominated that confirmed default can’t be the explanation for initiation of insolvency proceedings, in distinction to the long-held view {that a} company in default has to mandatorily be admitted below Part 7 of the IBC.

VIPL, part of the Anil Dhirubhai Ambani Group (ADAG), had appealed towards the Nationwide Firm Regulation Appellate Tribunal (NCLAT) order that upheld an NCLT judgement permitting insolvency proceedings towards it by

on the premise of default.

The corporate argued that its incapacity to pay was attributable to an ongoing dispute for which it’s already combating within the apex court docket.

VIPL was permitted by the Maharashtra Electrical energy Regulatory Fee (MERC) to provide energy to

() however sure disputes arose on operational prices and capping of tariff between VIPL and MERC. Whereas adjudicating these disputes, the Appellate Tribunal for Electrical energy (APTEL) awarded VIPL ₹1,730 crore, an award challenged by the MERC within the Supreme Court docket. VIPL argued it couldn’t pay again banks due to this pending enchantment and thus was not bancrupt.

Of their order, justices Indira Banerjee and JK Maheshwari stated admission of a case doesn’t have a set timeline. “Legislature has, in its knowledge, made a distinction between the date of submitting an software below Part 7 of the IBC and, the date of admission of such software for the aim of computation of timelines. CIRP (company insolvency decision course of) commences on the date of admission of the appliance for initiation of CIRP and never the date of submitting thereof. There isn’t a fastened time restrict inside which an software below Part 7 of the IBC must be admitted,” the judges stated.

Bankers stated permitting courts to dwell on the deserves of admitting a case will give defaulting promoters an escape route.

“If we go on analysing the explanations for default, it’ll be a multitude. As it’s, the legislation has been compromised attributable to varied delays. This now offers defaulting promoters another software to keep away from paying up. We will make sure that many promoters will use this order to cease restoration from them,” stated a senior public sector banker.

For the reason that order is from the highest court docket, bankers and attorneys stated there are restricted avenues to problem it. Potential recourse is both a change in laws or a possible listening to by a five-judge bench in case of a future such listening to.

Rajesh Narain Gupta, managing associate at SNG & Companions, stated the judgement defeats the time-bound admittance purpose of the IBC.

“This isn’t a superb order from the IBC perspective. It’s open to misuse as some unscrupulous debtors will use it to forestall their circumstances from being admitted,” Gupta stated.

Bankers stated they’re weighing choices to problem this order and have additionally sounded off the Insolvency and Chapter Board of India (IBBI) to contemplate some adjustments within the legislation.



Source link

Tags: BankersibcJOLTSlawyersorder
Previous Post

Bored Apes Approaching Mass Liquidation On BendDAO, Can This Crash Entire NFT Market?

Next Post

Ukraine braces for intensified attacks after Moscow car bomb killing | Ukraine

Related Posts

Prison Labor: The Last Stronghold of Slavery in the US

Prison Labor: The Last Stronghold of Slavery in the US

by Yves Smith
September 18, 2025
0

Yves right here. This put up not solely offers some info concerning the historical past and current state of jail...

The Kirk Assassination Has Exposed Our Political Rot

The Kirk Assassination Has Exposed Our Political Rot

by Connor O'Keeffe
September 18, 2025
0

Per week in the past immediately, Charlie Kirk was assassinated. Within the days since, particulars about and reactions to the...

Stocks Settle Slightly Lower as Markets Await the Fed

Stocks Settle Slightly Lower as Markets Await the Fed

by Barchart
September 17, 2025
0

The S&P 500 Index ($SPX) (SPY) on Tuesday closed down -0.13%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -0.27%, and the Nasdaq...

Bandhan Bank completes divestment in Yes Bank to Japan’s SMBC, continues buying spree after SBI & Carlyle Group

Bandhan Bank completes divestment in Yes Bank to Japan’s SMBC, continues buying spree after SBI & Carlyle Group

by Euro Times
September 17, 2025
0

Bandhan Financial institution on Wednesday divested 15,39,34,975 fairness shares of Sure Financial institution Ltd. to Japan's Sumitomo Mitsui Banking Company...

State pension age could rise to 80 unless major government reform made, expert warns

State pension age could rise to 80 unless major government reform made, expert warns

by Karl Matchett
September 17, 2025
0

Signal as much as our free cash e-newsletter for funding evaluation and professional recommendation that can assist you construct wealthSignal...

UK inflation data for August 2025

UK inflation data for August 2025

by Holly Ellyatt
September 18, 2025
0

Inside of cheese monger specialist cheese store, Mons cheese mongers, East Dulwich, London, England, UK. Geography Photographs | Common Photos...

Next Post
Ukraine braces for intensified attacks after Moscow car bomb killing | Ukraine

Ukraine braces for intensified attacks after Moscow car bomb killing | Ukraine

What is Deezer? Here’s everything you need to know in 2022

What is Deezer? Here's everything you need to know in 2022

Goldman Sachs Small Cap Growth Insights Fund Q2 2025 Commentary

Goldman Sachs Small Cap Growth Insights Fund Q2 2025 Commentary

September 18, 2025
Brigitte Macron to give ‘photographic evidence’ she’s a woman after French first lady lost lawsuit over gender rumours

Brigitte Macron to give ‘photographic evidence’ she’s a woman after French first lady lost lawsuit over gender rumours

September 18, 2025
How This Family Moved Overseas — on Their Own Terms

How This Family Moved Overseas — on Their Own Terms

September 18, 2025
How Laser Weapons Could Take On War Drones

How Laser Weapons Could Take On War Drones

September 18, 2025
One UI 8 update for Galaxy S25 series starts rolling out globally

One UI 8 update for Galaxy S25 series starts rolling out globally

September 18, 2025
Trupanion, Inc. (TRUP) Analyst/Investor Day Transcript

Trupanion, Inc. (TRUP) Analyst/Investor Day Transcript

September 18, 2025
Euro Times

Get the latest news and follow the coverage of Business & Financial News, Stock Market Updates, Analysis, and more from the trusted sources.

CATEGORIES

  • Business
  • Cryptocurrency
  • Finance
  • Health
  • Investing
  • Markets
  • Politics
  • Stock Market
  • Technology
  • Uncategorized
  • World

LATEST UPDATES

Goldman Sachs Small Cap Growth Insights Fund Q2 2025 Commentary

Brigitte Macron to give ‘photographic evidence’ she’s a woman after French first lady lost lawsuit over gender rumours

  • Disclaimer
  • Privacy Policy
  • DMCA
  • Cookie Privacy Policy
  • Terms and Conditions
  • Contact us

Copyright © 2022 - Euro Times.
Euro Times is not responsible for the content of external sites.

No Result
View All Result
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology

Copyright © 2022 - Euro Times.
Euro Times is not responsible for the content of external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In