Hello! Welcome back to our updates on the Insolvency and Bankruptcy Code, featuring developments during the month of December 2022.
The government is considering introducing a bill in the budget session of the Parliament with some amendments to the Insolvency and Bankruptcy Code, 2016 (“IBC”). The likely amendments to be brought into the code are a check on overall delays and delays in the approval of the resolution plan. Insolvency Law Reforms Committee is also set to bring an amendment to the Code with respect to group insolvency along with other amendments.
The National Company Law Tribunal (“NCLT”) admitted the insolvency of a listed coaching institute MT Educare and VHM Industries Limited which is a Mumbai-based textile company amongst others this month.
From the Docket
The Supreme Court in Ashok Kumar Sarawagi v. Enforcement Directorate held that in light of an order of provisional attachment of the immovable and movable properties owned by the corporate debtor under the Prevention of Money Laundering Act, 2002 (“PMLA”), the Resolution Professional can conduct the process of CIRP in accordance with IBC on “as is where is basis” and “whatever there is basis”. However, it was specifically stated by the Supreme Court that even if a Resolution Plan is approved, the order of approval shall not be passed by the NCLT without the express permission of the Supreme Court. Earlier it has been held in Kiran Shah v. Enforcement Directorate by the National Company Law Appellate Tribunal (“NCLAT”) and in Rajiv Chakraborty v. Directorate of Enforcement by the Delhi High Court that the moratorium under Section 14 of the IBC does not apply to the proceeds under the PMLA.
The inherent jurisdiction of the NCLAT under Rule 11 of the NCLAT Rules, 2016 cannot be invoked to deal with matters not provided for by the IBC, the NCLAT has ruled.
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– Sarthak Advocates & Solicitors