Welcome to INSOL India Newsletter Volume 18, Issue December | Jan 15, 2019

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

It is the second anniversary of implementation of Insolvency Code for corporate debtors. In two years, we have seen a paradigm shift in the credit culture in India. The equation between the creditor and debtor has changed leading to better credit discipline. Resolution of large distressed companies like Bhushan Steel, Electrosteel and Monnet Ispat led credence to the efficacy of the Code. The pace at which our judicial forums have laid down the jurisprudence is also commendable and has helped to clarify many aspects of this relatively new legislation. IBBI as the regulator has been instrumental not only in increasing the awareness about the Code but by inviting stakeholders participation has also been ironing out the creases in implementation of the Code to make it more efficacious. The legislative intervention, in form of two amendments, also aided in establishing credibility of the legislation by providing that the process cannot be misused by the management that was responsible for driving a corporate debtor to insolvency. As per the data available with IBBI, 66 cases have been resolved resulting in realization by creditors of almost Rs, 80,000 crores. Cases which could not be resolved have been referred to liquidation. In all, the Code has been a success. Though, few important milestones like cross border insolvency framework, ensuring adherence to timelines and providing a mechanism for dealing with defaulting resolution applicants should be the next area of focus.

This edition of the newsletter gives an overview of some of the important judicial pronouncements, updates the members on developments in some of the ongoing insolvency resolution processes and updated the members about IBBI’s continuing endeavours in relation to the Code.

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!  

May 2019 be a year of good economic prospects and growth!
 

Welcome to the latest issue, which is the first issue of 2019 as well!
 

The Insolvency and Bankruptcy Code 2016 since its inception, has created a new climate for insolvency resolution, leading to a different kind of credit culture. Rightly so, for any effective legislation is bound to make changes, some predictable and some unpredictable.
 

The learned Adjudicating Authorities made notable contributions in the development of insolvency jurisprudence.  The Hon’ble Supreme Court has also added its bit, giving new dimensions to the Code by clarifying certain important issues. It is hearing matters with respect to many aspects, and let us hope that the obfuscation will get cleared where cardinal questions arose.  In the following pages, the editorial team has quite aptly dealt with various decisions right from the learned Adjudicating Authorities to the Hon’ble Apex Court.
 

For many questions of law, distinct from that of process, additional legislative as well as judicial action may be required.  Questions regarding withdrawal of the resolution application by Committee of Creditors post approval, jurisdiction of Civil Court qua the limited jurisdiction of the learned Adjudicating Authority under the Code, etc., are there.  An important decision from the learned Adjudicating Authority, Chennai, is directing to work out a ‘Standard Operating Procedure’ to be followed for determining the suitability and viability of the resolution plans.  The said direction bears a pragmatic and purposeful interpretation of law and an approach as well.  
 

The IBBI continues to strengthen the Code through workshops and seminars, the latest example being those organized by it in the North Eastern Region.   Proper popularization and implementation of the Code through creating awareness will go a long way in establishing its statutory strength and purposeful application.
 

I would request our readers to contribute articles and blogs etc., which could be published in the newsletter as well on the website of INSOL India, apart from their opinions. Needless to say, for a newsletter like this, not only bouquets, but brickbats also matter, for a meaningful and strong growth.