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 28, Issue OCTOBER / NOVEMBER/DECEMBER | Dec 28, 2020

Editor's Message
Divyanshu Pandey
Greetings to all INSOL India members and readers. On behalf of the editorial board, I sincerely hope and pray that you and your loved ones are safe.
The approval of Jet Airways resolution plan by its committee of creditors is like a silver lining on the clouds in the Indian insolvency eco system. It was a complex case and odds were piled up against a successful resolution on account of COVID and its adverse impact on the aviation sector. It is an achievement for all the stakeholders involved in the process. I take this opportunity to make a special mention for my editorial board colleague, Ashish Chhawchharia, for ably anchoring the insolvency resolution process.
The suspension of initiation of insolvency proceedings has been extended by another three months. As I had mentioned earlier, this period presents an opportunity to strengthen our eco system and we as stakeholders must continue in our efforts to achieve this objective.
The recent circular issued by SEBI prescribing a framework for debenture trustee to sign the intercreditor agreement under the Prudential Framework for Resolution of Stressed Assets is a welcome move. It will help in having a coordinated approach for out of court insolvency resolution and will strengthen the out of court insolvency resolution option- a complementary tool for any evolved insolvency framework. In addition to this, measures like specifying eligibility parameters for accounts which can be considered RBI’s Resolution Framework for Covid-19 Related Stress, passage of Banking Regulation (Amendment) Act, 2020 (which enables the RBI to initiate a scheme of reconstruction or amalgamation of a co-operative bank)  and passage of Bilateral Netting of Qualified Financial Contracts Act, 2020 (which facilitates bilateral netting of financial contracts) are steps in the right direction to strengthen our financial system.
In this edition, we give an overview of the abovementioned  measures along with snapshots of some of the important judicial pronouncements and news of events and developments related to insolvency regime in India.
I 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 their vast knowledge on this subject by contributing articles to this monthly newsletter. You may write in to our editorial team at
President's Message
A. S. Chandhiok

COVID-19 has made us to first greet each other with a wellness wish or message.  The virus has affected all human activities and has prescribed us a virtual world to live and work.  And now, an ‘amendment’ has come to the virus spectrum– with a newer, formidable variant which is 40-70% more transmissible!  This means that stricter measures are required to slow down the spread wherever the new variant lands.  Let us take all possible precautions and stay safe, though the danger is looming large.

The Government has extended suspension of the IBC till end March 2021 for helping businesses cope with the lingering difficulties posed by the COVID-19 pandemic.  All defaults that have arisen on or after March 21, 2020, when the national lockdown was clamped to curb the virus spread, will remain out of the insolvency net for a full year now.  
Whether such a prolonged prohibition would incentivise wilful defaults is a question that cannot be avoided.  Because, it can be argued that the move eliminates IBC’s inherent rationale of creditor-in-the-saddle approach and favours a kind of debtor-in-control governance.  While Sections 7 and 9 allow financial and operational creditors respectively to initiate the resolution process, Section 10 facilitates voluntary insolvency by corporates. With operation of all the said three Sections suspended, the concerns regarding unintended consequences are quite natural. Resolution and restructuring being the need of the hour, such consequences can wait.  Of course, suspension of the IBC might help prevent two things – wanton sale of companies crippled by low valuations because of the pandemic and flooding of Adjudicating Authorities with cases.  However, creditors are not bereft of other avenues. Insolvency proceedings against personal guarantors have not been suspended and that is an option in the hands of banks.  Many are of the view that the banks needed to be meticulous in observing risk-based supervisory processes. This is both an academic and practical topic.  And the universal fact is that insolvencies have increased across the globe and will continue to be so because of the effect and after effect of COVID-19.

On 24thNovember, the Insolvency and Bankruptcy Board of India has published a discussion paper on ‘Voluntary Liquidation Process.’  Section 59 under Chapter V of Part II of the IBC provides that a Corporate Person (CP) may initiate voluntary liquidation proceedings if two conditions are met: (i) the CP has no debt or is in a position to pay all the debts; and (ii) the CP is not being liquidated to defraud any person.  The subject is, of course, worth discussion.
As usual, interesting articles, news etc. are in the following pages.

This is the last issue of an unprecedently eventful year.  Whatever may be the circumstances, we have to stay hopeful and grateful.  Thus, a very happy, more joyous and prosperous New Year to all our readers!
Enjoy reading, stay safe and take care.
A.S. Chandhiok
December 24, 2020.
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
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
January, 2021

Venue: The National Law University, Delhi

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Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2020[1] 1. 30A is inserted[2].Regulation 30A, which specifies the transfer of debt due to the … read more

The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2016 The following amendments have been made: 1. In Regulation … read more

The following amendments have been made: Regulation 21A, which specifies the dissemination of public announcement, has been inserted, namely: “An information utility shall disseminate every … read more

An amendment application praying for directions to extend the moratorium period till March 31, 2021 has been filed in the Supreme Court. The Supreme Court is hearing the issue of extension of loan … read more

In case of Karad Urban Cooperative Bank Ltd vs Swwapnil Bhingardevay and Others, the court accepted the application u/s 7of the IBC Code. Following the due order of NCLT and the procedure … read more

Supreme Court, in the case of Metenere Ltd. where SBI is the financial creditor and its ex-employee is receiving pension, observed at the outset that NCLAT’s approach was not correct that … read more

On September 7, 2020, the RBI released financial parameters to be considered by lending institutions while finalizing resolution plans in respect of borrowers eligible under the Resolution Framework … read more

On September 29, 2020, the Banking Regulation (Amendment) Act, 2020 (“BR Amendment Act”) has been enacted with a view to extend certain provisions of the Banking Regulation Act, 1949 … read more

The Bilateral Netting of Qualified Financial Contracts Act 2020 (“Netting Act”) has been enacted on September 28, 2020 with a view to facilitate financial stability by providing … read more

Vide a circular dated August 31, 2020, the SEBI has extended the relaxation from default recognition by credit rating agencies due to restructuring of debt. The circular is in furtherance of the SEBI … read more

The resolution process stipulated under the RBI Prudential Framework for Resolution of Stressed Assets (“Prudential Framework”) dated June 7, 2019 requires the signing of an … read more

SEBI, vide its notification dated September 16, 2020 and in exercise of powers conferred under section 11(1) of the SEBI Act, 1992, has permitted listing and trading of units of Infrastructure … read more

The Companies (Amendment) Act 2020 was notified on September 28, 2020. Some of the key changes under the amendment include: The amendment makes a host of changes to penal provisions. … read more

On October 13, 2020, the Reserve Bank of India notified that lending institutions can invoke resolution framework launched under the Covid-19 linked stressed assets for resolution in respect of all … read more

The Insolvency and Bankruptcy (Application to Adjudication Authority) Rules, 2016 were amended vide notification dated September 24, 2020. Some of the key changes introduced by the amendment include: … read more

On September 23, 2020, the IBC (Second Amendment) Act 2020 was notified, which in turn repealed the IBC (Amendment) Ordinance 2020. The amendment replicates the provisions of the ordinance, which had … read more

On September 1, 2020, the IBBI notified the IBBI (Use of Caveats, Limitations, and Disclaimers in Valuation Reports) Guidelines 2020 (“Valuation Report Guidelines”). The Valuation Report … read more



Authors: Vasanth Rajasekaran (Partner), Biswadeep Chakravarty (Senior Associate) and Sanjeev Sambasivan (Associate) (Earlier published in Mondaq) In an important decision passed last year , a single Judge of the Calcutta High Court (“High …


Authors – Vasanth Rajasekaran and Reshma Ravipati

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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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