IBC Brief – January, 2023
Hi! Welcome back to our updates on the Insolvency and Bankruptcy Code featuring developments during January, 2023.
Earlier this month, our Insolvency team prepared a yearly round-up covering a snapshot of all the major developments in the Insolvency Law of India.
From the Docket
The Hon’ble Supreme Court of India in IFB Agro Industries v SICGIL India held that the National Company Law Tribunal, cannot exercise parallel jurisdiction with the Securities and Exchange Board of India for addressing the violation of the regulations framed under the SEBI Act.
In Sabarmati Gas Limited v Shah Alloys Limited the Hon’ble Supreme Court held that an application under Section 7 or 9 of the IBC may be condoned by an application under Section 5 of the Limitation Act on showing sufficient cause.
The National Company Law Appellate Tribunal (NCLAT) in South Delhi Municipal Corporation v. MEP Infrastructure Developers has stated that in cases where a contractor is employed to collect toll tax, the amount that the contractor is owed under the toll collection agreement would be considered an “operational debt” under the IBC.
The NCLAT in Shapoorji Pallonji Finance Private Limited v. Rekha Singh held that the NCLT retains jurisdiction over a non-banking financial company even if its asset size falls below the threshold specified by the Ministry of Corporate Affairs during the pendency of an insolvency resolution process.
The Hon’ble NCLAT, in Jindal Stainless Limited v. Mr. Shailendra Ajmera, R.P. of Mittal Corporation held that the CoC cannot be directed to accept the resolution plan of the resolution applicant post closer of the challenge process.
InShivashakti Elmech Private Limited v. Shiv Nandan Sharma, there was a dispute over the eligibility of the successful resolution applicant. The applicant was a related party and had undergone a financial reorganization process after the resolution plan had been approved by the committee of creditors. However, the challenge to the eligibility was rejected by the NCLAT. The NCLAT held that the successful resolution applicant did not become ineligible under Section 29-A(c) due to the financial reorganization process that occurred post-approval of the resolution plan. The NCLAT also ruled that being a related party did not automatically disqualify a party from submitting a resolution plan for a corporate debtor, provided they were not otherwise disqualified under Section 29-A.
Thank you for reading.
– Sarthak Advocates & Solicitors