Welcome to INSOL India Newsletter Volume 17, Issue NOVEMBER | Dec 14, 2018

We welcome you to this edition of the INSOL India Newsletter. The Insolvency and Bankruptcy Code (Code), which has revolutionised the insolvency landscape of the country, is itself in a constant state of flux.

Welcome to the November edition of INSOL India newsletter. The progress made by India in making the Insolvency and Bankruptcy Code (IBC) stronger seeks to ensure that the country becomes a viable investment destination for foreign investors who can tap opportunities presented during the process. The recent changes in regulations and practices based on legal jurisprudence are a reflection of government’s intent. For almost two years, both, the Tribunals and the Supreme Court have been working relentlessly to manage the constant stream of appeals, counter appeals and litigations. Recently, Finance Minister Arun Jaitley said at an event, “I expect this (IBC) process to be much more expeditious than what is has been in the past.”

One of the recent amendments to the Code worth a mention is the inclusion of home buyers in the creditors committee. The experts are divided on whether this decision will result in reaching consensus during the resolution process or it will lead to further complications.     

We continue to bring you latest updates on India’s Insolvency landscape. Recently, in the case of Transmission Corporation of Andhra Pradesh Limited versus Equipment Conductors and Cables Limited the Supreme Court has clarified the scope and ambit of Section 8 and Section 9 in the case of Transmission Corporation of Andhra Pradesh Limited versus Equipment Conductors and Cables Limited (IBC). It has reiterated that the Code is not a substitute to a recovery forum. In another landmark judgement, the apex court upheld the decision of NCLAT approving the resolution plan submitted by Ultratech Cement Limited for acquiring Binani Cement Limited.  The observations made by NCLAT with respect to treatment of different classes of creditors in a Resolution process and the role of financial creditors in the CoC will have far-reaching consequences.

Paying heed to best global practices in Insolvency, the government is assessing the potential of a ‘pre-packaged’ bankruptcy scheme with an objective to speed up the insolvency resolution process. The saga of Essar Steel case continues to takes its twists and turns despite a fairly conclusive order from Supreme Court in the matter. We also recently saw another emerging situation where a successful resolution applicant for on the big 12 cases was allegedly unable to comply with the terms of its own plan.

Hope you will find this edition informative. Please do continue sharing your feedback with us.   Also, I encourage the readers to share their vast knowledge on this subject by contributing articles to this monthly newsletter. You may write in to our editorial team at newsletter@insolindia.com.

Greetings!
 

Welcome to the latest issue, which is the last issue of the year as well!
 

This year was an eventful year for INSOL India as well as for the insolvency industry as a whole. For INSOL India, it had its Annual Conference, hosted the G36 Meeting of INSOL International (first time in India!) and also held a Moot Court Competition in collaboration with the National Law University, Delhi, all last month, in quick succession. For the insolvency industry, insolvency cases have increased and the Adjudicating Authorities have become busier, let alone the busy insolvency professionals. New issues are bound to surface, which need to be addressed theoretically and practically. The new Code is marching fast to meet its objectives, with an undying spirit to rehabilitate viable units and prescribe closure of non-viable ones.  In both cases, promotion of entrepreneurship is the crux. The other prominent objectives, inter alia, are enhancing availability of credit for business and providing ultimate economic freedom.
 

A recent report from the US shows that litigations will grow, but skills shortage worries US firms! As a new professional pitch has been created in India consequent to enactment of the Insolvency and Bankruptcy Code, the professionals have to be better equipped with the nuances of the Code as well as business management including accounting aspects, to counter the real challenges under the new insolvency regime. Not just economic reform, but any reform requires generation of knowledge and capacity building amongst the stakeholders. It is here that INSOL India has to play a vital role, and this newsletter, is an attempt by it to provide periodically new information and better insights. Its success has to be decided by you, the reader.
 

The Supreme Court has added a word of caution that the jurisdiction of NCLT/Adjudicating Authority should not be invoked at every stage of the resolution process, save exceptional circumstances. In relation to another decision, many of the insolvency professionals have raised an issue whether the proceedings under the Code would survive if the corporate debtor (unless disqualified), or a resolution applicant wishes to pay the entire outstanding dues, both of the operational creditor as well as the financial creditor. Some of the resolution professionals have expressed their difficulty in meeting the timeline provided under the regulations, for they feel that the information memorandum may not be complete with all information within the timeline. Let us hope these issues would get resolved either by adjudication or by legislative processes.

Needless to say, as compared to other legislations, the Code has met with greater acceptability, procedural and otherwise, and has written its success within a short span of time. In the times to come, one can be sure that the Code will fruitfully serve its purpose of resolution and avoiding liquidation.
 

I am sure you would enjoy reading this issue also. Interesting news and views are in this issue as well.

Before I close, let me wish you a Merry Christmas and a Happy New Year!