Welcome to INSOL India Newsletter Volume 14, Issue August | Sep 14, 2018

Greetings and a warm welcome to all INSOL India members and friends.

The month of August saw few more resolution plans getting approved by NCLT in closely watched cases, such as Ruchi Soya, Bhushan Power and Steel, Castex Tehcnologies. While an example was set by way of resolution of Bhushan Steel Ltd, the resolution plan was contested. The outgoing bidders or the promoters approach has been to challenge the approved resolution plans and they are willing to go to the highest court. This has the potential to mar the belief in efficacy of the Code specially from the point of view of foreign investors. The foreign investors may not want to be embroiled in litigation duing the CIRP or post CIRP as long as the resolution has happened through a process laid down under the Code and they have been declared the successful resolution applicant. It is therefore important that any frivolous litigation should not be encouraged by the courts. Even Mr. Raghuram Rajan has suggested in his report to the parliamentary panel that “Higher courts must resist the temptation to intervene routinely in these cases, and appeals must be limited once points of law are settled’. Though it is commendable at the speed which the adjudicating authority, the appellate tribunal and even the Supreme Court is working towards settling the principles of law on issues arising under the Code. The rapidly evolving jurisprudence will definitely allay all fears.

In this editions, we bring to you summaries of two important Supreme Court decisions settling the legal positions, updates in relation to recent circulars issued by IBBI, news and developments in some of the ongoing insolvency resolution processes.

Hope you will find the newsletter informative. As always, please do share your valuable feedback, especially on the topics you would like us to address. Also, I encourage the readers to share your vast knowledge on this subject by contributing articles to this monthly newsletter. You may write in to our editorial team on newsletter@insolindia.com
 

 

 

 

Greetings!

Welcome to yet another issue of the newsletter!

I am sure you would enjoy reading this issue also. There are interesting news and views in this issue as well. In a decisive judgment titled “Numetal Ltd. v. Satish Kumar Gupta & Others,” the Hon’ble NCLAT has directed to exclude the period the appeal was pending before it for the purpose of counting the total period of 270 days. The Hon’ble Tribunal has also directed one of the Resolution Applicants to make payment of all overdue amount with interest in relation to ‘connected party,’ so as to enable it get the benefit of second proviso to sub-section (4) of Section 30, inserted in the Code on November 23, 2017.

Insolvency matters are increasing in number before the Adjudicating Authorities and new issues are surfacing often. The government’s plan to have eight special Benchesof the Adjudicating Authority/ NCLT is a step in the right direction. We need to have an efficient system in place, so that the history of ‘backlog’ will not haunt the insolvency terrain, where things are fine now. Adding more Benches is just one thing; proper system and meticulous running of the same is a different kettle of fish.

INSOL India assisted the Bar Associations of the Adjudicating Authorities to ensure proper infrastructure development so as to cope with the rising demand. The Hon’ble High Court of Delhi has called for a status report from the Government incompliance with the infrastructure needs of the Adjudicating Authorities as contained in their report to the Hon’ble High Court.

I would like to share a piece of glad news. Because of its fast growth in membership volume, profile and other activities during the past two years, INSOL India has become one of the top ten member associations of INSOL International, earning it eligibility to have representation on the Board of INSOL International. Hon’ble Mr. Justice A.K. Sikri, Judge, Supreme Court of India, who is part and parcel of INSOL India and is its Past President, has been unanimously recommended by the Board of INSOL India to be on the Board of INSOL International.

Insolvency and bankruptcy resolution needs careful handling. Only smart processes with a high degree of transparency and dexterity can bring the desired results.