Inventive Industries: Recognition of Paradigm Shift In IBC a complete code on Insolvency Law
Posted On : October 04, 2017
Though the move was a bit late going by the international scenario, still IBC’2016 was a much-awaited legislature. When in January this year, ICICI filed first application against Innoventive Industries Limited for initiation of CIRP, promoters of the company did not leave any stone unturned to stall get away with the insolvency resolution proceedings. The Supreme Court while examining the issue of repugnancy between the IBC and Maharashtra Relief Undertaking (Special Provisions) Act, 1958 made important observations on the IBC and held that IBC is a complete and exhaustive code on insolvency. Given that it was the first application to the SC under the Code, the Court decided to set out salient features of the Code so that courts and tribunals take notice of the paradigm shift in law. That is, entrenched managements are no longer allowed to continue in management if they cannot pay their debts. But the Apex Court made it clear that not only the Code is pro creditors also that promoters rights would be arrogated to seek any justice in the name of the company after the appointment of the insolvency professional.