INSOL India is an independent leadership body representing practitioners and other associated professionals specialising in the fields of restructuring, insolvency and turnaround. It is an association with an architecture that facilitates key stakeholders to come together and share experiences while preserving their independence.



Welcome to INSOL India Newsletter Volume 24, Issue APRIL | Apr 21, 2020

Editor's Message
Ashish Chhawchharia
We welcome you to this edition of the INSOL India newsletter. As one of the biggest health crisis known to humanity, the Coronavirus disease (COVID-19) pandemic has brought the world to a grinding halt. As lockdowns are imposed globally, governments are proactively announcing relief measures in the interest of businesses. The Government of India (GoI) has taken several steps to provide relief in the last few weeks including announcing an economic relief package, deadline extensions for filing ITR, GST, among others.

In near future, some of these steps can change the insolvency landscape in the country. On March 24, Finance Minister Nirmala Sitharaman expressed the intent of suspending Sections 7, 9 and 10 of the IBC, in case the difficulties faced by the corporates continue beyond April 30, 2020, amidst the lockdown. Invocation of force majeure is also being considered. Needless to say, these decisions will impact operational creditors severely as this step may be used unfairly by some unscrupulous debtors. The Reserve Bank of India (RBI) also allowed financial creditors to grant a moratorium of 3 months on payment of all term loan installments and interest on working capital loans, which are due between March 1, 2020, and May 31, 2020.

Several more measures and relief packages are expected from the Government and regulator in case this crisis is not abated in next 30-60 days. Some of the developed countries have thrown open string of relief packages and benefits ranging from 2-11% of their respective GDP. Comparatively India is currently under 1%. While it is understood that the fiscal room available with our Government is limited, but I am sure they will do whatever is needed to protect the lowest strata of our population and sustain our economy. It will be a tightrope walk to strike a balance between offering immediate relief and long-term health of the economy.

In line with our commitment to keep our readers abreast of developments from around the world, in this edition, we bring you an article that summarises key COVID-related insolvency measures across the globe. The article gives an overview of the measures adopted by the governments across Australia, the UK, Singapore, Germany and the US, along with the measures introduced by the Indian government.
This edition of the newsletter also covers various key Regulatory updates including Insolvency & Bankruptcy Board of India’s (IBBI) plan of action to tackle group insolvencies and latest judgements.

I hope you will find the INSOL India 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 their vast knowledge on this subject by contributing articles to this monthly newsletter. You may write in to our editorial team at contact@insolindia.com.
 
President's Message
A. S. Chandhiok
The world is in the grip of a total fear. Fear of two disasters looms large – one of life and the other of economy. While country after country is thinking of an antidote or say vaccine for Coronavirus, the virus delightfully invaded country after country and now, many of them together. And, as a means of prevention and protection, planet earth is shut. This seemingly cocooned state entails many a social and economic problem.
In such a situation, is this newsletter before you.

History has testified that the aftermath of a pandemic, war, catastrophe, or calamity is more gruesome than them. The future depends on what our plans and programmes are. And how good we are at it.

The Government of India has taken several relief measures in the past few weeks by announcing, inter alia, economic relief package, extension of deadlines for filing of ITR, GST etc.

Resolution of insolvency is inextricably interlinked with economic progress. Post the insolvency reforms of 2016, there has been rapid development in the area. The ongoing proceedings, that are under preparation for initiation and the ultimate liquidations etc., have been stuck up. The Insolvency and Bankruptcy Board of India vide its notification dated March 29, 2020, has announced insertion of regulation 40C whereby special provision relating to time-line has been made. This means that the period of lockdown shall not be counted for the purposes of the time-line for any activity that could not be completed due to the lockdown in relation to a corporate insolvency resolution process. Another insertion of similar nature is by way of 47A, which is related to computation of time-line for tasks that could not be completed due to the lockdown. The NCLAT, New Delhi has also passed suo moto orders on March 30, 2020, clarifying that the interim directions/stay order passed in all competition, company and insolvency appeals shall continue until further order and in the event of expiry of period of fixed deposits the concerned bank shall renew the same for further period of six months. All these are procedural items to mitigate the loss on account of time-loss.

The Reserve Bank of India has also provided clarity on investment limits by FPI in government securities through FAR, vide its circular dated April 15, 2020. There are other items in the news flash section of the newsletter.

On March 24, India’s Finance Minister announced the intent of suspending Sections 7, 9 and 10 of the IBC, in case the difficulties faced by the corporates continue beyond April 30, 2020, during the lockdown. Invocation of force majeure is also being considered. Needless to say, these decisions will impact operational creditors severely as this step may be used unfairly by unscrupulous debtors. The Reserve Bank of India (RBI) also allowed financial creditors to grant a moratorium of three months on payment of all term loan installments and interest on working capital loans, which are due between March 1, 2020, and May 31, 2020.

Several other measures and relief packages are expected from the Government and regulator in case this crisis is not abated in next thirty to sixty days. Some of the developed countries have thrown open string of relief packages and benefits ranging from two to eleven per cent of their respective GDP. Comparatively India is currently under one per cent.

To keep our readers abreast of developments from around the world, we bring you an article that summarises key COVID-related insolvency measures across the globe. The article gives an overview of the measures adopted by the governments across Australia, the UK, Singapore, Germany and the US, along with the measures introduced by the Indian government.
This edition of the newsletter also covers various key Regulatory updates including Insolvency & Bankruptcy Board of India’s (IBBI) plan of action to tackle group insolvencies and latest judgements.

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, the readers are encouraged to share their knowledge and views on the subject of insolvency resolution by contributing articles to the newsletter. You may write in to our editorial team at contact@insolindia.com

Stay safe!

Best 

A.S.Chandhiok
President, INSOL India
 
SIG 24
AAA Insolvency Professionals LLP
ASC Consulting Private Limited
AZB & Partners
Chandhiok & Mahajan, Advocates and Solicitors
Cyril Amarchand Mangaldas
Dhir & Dhir Associates
Duff & Phelps
Edelweiss Asset Reconstruction Company Ltd.
Ernst & Young Global Limited
Grant Thornton India LLP
J Sagar Associates
Kesar Dass B & Associates
Khaitan & Co
KPMG India private Limited
Link Legal
Luthra & Luthra Law Offices New Delhi
PHOENIX LEGAL
Shardul Amarchand Mangaldas Shroff & Co.
Talwar Thakore & Associates
E-Newsletter Editorial Board
Editorial Team
Divyanshu Pandey
Partner, J. Sagar Associates
Editorial Team
Ashish Chhawchharia
Partner - Advisory, Head - Restructuring Services, Grant Thornton Advisory Pvt Ltd
Editorial Team
Anju Agarwal
Director, ASC Consulting Pvt. Ltd.
Editorial Team
Ashwin Bishnoi
Partner, Khaitan & Co.
Upcoming Events and Activities
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Headlines

Reserve Bank of India by two circulars bearing No. RBI/2019-20/199 AP (DIRC) Circular No. 24 and No. RBI/2019-20/200 AP (DIRC) Circular No.25 has clarified and revised the limit of FDI in corporate … read more

The Hon’ble President Promulgated taxation and other laws (relaxation of certain provisions) Ordinance 2020. Where, any time has been specified which falls during the period from 20th March, … read more

IBBI amended the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016. In view of the nationwide lockdown in view of Covid-19, it is difficult for the Resolution professional/ … read more

The Ministry of Corporate Affairs has received representations from industries, companies, body corporates, and others for relaxation in the provisions of Section 123 of the Companies Act in … read more

Hindustan Unilever Limited has completed the merger of Glaxo Smith Kline Consumer Healthcare Limited with itself. It is almost one year ago when this merger was announced and all this time took to … read more

SEBI extends deadlines for comments on proposed relaxation in delisting norms and QIP. In view of the extraordinary pandemic situation, the deadline for public comments on proposed relaxation in … read more

Ten state run banks into four lenders have become effective from April 1, 2020. All branches of the merging banks will operate as of the banks in which they have been amalgamated and merged … read more

UN in its latest trade report has observed loss of trillions of dollars and the global economy will come into recession. The only exception made is India and China. Hope India can carry this out in … read more

The Government of India has extended the Foreign Trade Policy for a period of six months from April 1, 2020. The new Five Year Policy 2020-25 has not been finalized as consultations could not be … read more

On March 30, 2020, the Ministry of Corporate Affairs has issued a circular condoning the delay in filing certain documents during the current year C Form under Section 403 read with Companies … read more

The Reserve Bank of India has issued a circular bearing No. RBI/2019-220-214 AP Circular dated 30 dated April 15, 2020 clarifying that the aggregate investment limits of foreign portfolio investors … read more

The Ministry of Corporate Affairs by circular No. 14/2020 dated April 8, 2020, considering the present circumstances caused by the Coronavirus Disease, has allowed companies to conduct Extraordinary … read more

RBI has for the second time in COVID-19 crisis has stepped in on 16.4.2020, Friday, to ensure liquidity and elevate stress in state finances, NBFCs, micro-finance institutions, real estate – … read more

Comparison of the provisions of the Insolvency & Bankruptcy Amendment Act, 2020 with the Insolvency & Bankruptcy Code, 2016 1. Insolvency Commencement Date: The Insolvency & Bankruptcy Amendment … read more

As per Sub-regulation 3 of regulation 40B of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for the Corporate Persons) Regulations, 2016, an IP shall ensure that the Forms … read more

A notification was issued by the Ministry of Corporate Affairs on 18th March stating that the Central Government has notified the expression “Special Window for Affordable and Middle-Income … read more

India’s bankruptcy regulator, the Insolvency & Bankruptcy Board of India (the Board), is seeking to amend its rules and regulations to ensure that the IBC is suited to handle group … read more

The limitation period for filing of an application to set aside a domestic award in India is 3 months (extendable at the discretion of the court by 30 days) from the receipt of the arbitral award by … read more

We are pleased to announce that Ashwin Bishnoi joins our editorial board. Ashwin is a Partner at the leading law firm of Khaitan & Co. Ashwin specializes in complex corporate rescues and distress M&A … read more

Articles

By Ashwin Bishnoi Partner Khaitan & Co. Ankur Saxena

The global economy is facing daunting challenges as a result of Covid 19. Supply chain disruptions and demand deficiency has crippled economic activity and is likely to result in increasing defaults in debt repayments. Governments across the globe …

By - Raj Panchmatia, Peshwan Jehangir, Himanshu Vidha

The Insolvency and Bankruptcy Code, 2016 (Code), with its comprehensive, consolidatory and streamlined focus on time-bound resolution of corporate insolvency in India, has often been lauded for its creditor-centric approach. The recent outbreak of …

By Prof. Pryor C. Scott

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DISCLAIMER

INSOL India is a society registered under the provisions of Societies Registration Act XXI of 1860. A certificate to this effect was issued by the Registrar of Societies, Government of National Capital Territory of Delhi on 11th January 2000.

The formation of INSOL India fulfilled the long cherished desire of the members of the legal fraternity, chartered accountants, company secretaries and other persons, bodies and institutions in India, to have an association to promote closer co-operation, exchange of ideas, dissemination of information and an empathetic understanding of law of insolvency and related lawhe formation of INSOL India fulfilled the long cherished desire of the members of the legal fraternity, chartered accountants, company secretaries and other persons, bodies and institutions in India, to have an association to promote closer co-operation, exchange of ideas, dissemination of information and an empathetic understanding of law of insolvency and related laws.
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