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  • Bijoy P Pulipra

Effect of upholding the constitutionality of the provisions of IBC on Operational Creditors

Finance is the lifeblood of commerce and a corporate person's very existence. The finance requirement of a corporate entity is being met from two primary sources, viz. Debt and Equity. As long as the debt is adequately serviced and repaid, the promoters, who are the equity holders, are in control over the affairs of the said entity, and the creditors have no say. However, if a default occurs in servicing the debts, the creditors have to be in control, and promoters have no voice. But up to the Insolvency and Bankruptcy Code 2016, the situation was very different, as creditors have only very lean and limited powers and roles, even when the debt is in default, and the promoters continue to control the affairs of the entity. Under these conditions, India’s recovery rates of defaulting loans were among the lowest. When default takes place, broadly speaking, lenders seem to recover 20% of the value of debt on an NPV basis[1].


Due to the weakness that prevailed in the credit ecosystem of the Country and consequent low credit recovery rates, the lenders were hesitant to lend money to the entities, which had affected the overall economic health of the nation over a while. To address the said lacunae, the Bankruptcy Law Reforms Committee [BLRC] was constituted under the Chairmanship of Mr T K Viswanathan, and the said Committee had recommended the revamping of the then-existing credit recovery mechanism by giving prominence to the creditors when the debt is in default.


The Companies Act 2013 permits the following parties to apply to NCLT for a declaration that the Company is sick-(a) the Company, (b) any secured creditor, (c) the Central Government, (d) the Reserve Bank of India, (e) State Government, (f) public financial institution, (g) a State level institution, (h) a scheduled bank. Even under the SARFAESI, 2002, debt enforcement rights are available for secured creditors only. However, the Committee proposes that any creditor, whether financial or operational, should be able to initiate the insolvency resolution process (IRP) under the proposed Code. It may be noted that operational creditors will include workers and employees whose past payments are due. The Committee also recommends that a resolution plan provide specific protections for operational creditors. This will empower the workmen and employees to initiate insolvency proceedings, settle their dues fast and move on to some other job instead of waiting for their dues for years together, as is the case under the existing regime.[2]


When considering the types of liabilities that can be considered under the ambit of the Code, the BRLC had identified two broad sets viz (1) Financial Contracts and (2) Liabilities based on operational contracts. Financial contracts involve an exchange of funds between the entity and a counterparty, a financial firm or an intermediary. This can cover a broad array of types of liabilities: loan contracts secured by physical assets that can be centrally registered; loan contracts secured by floating charges on operational cash flows; unsecured loan contracts; debt securities that are secured by physical assets, cash flow or are unsecured. On the other hand, operational contracts typically involve an exchange of goods and services for cash. For an enterprise, the latter includes payables for purchasing raw materials, other inputs or services, taxation and statutory liabilities, and wages and benefits to employees.[3]


There is a clear distinction and differentiation between the financial and operational creditors under the provisions of the Code. In the case of financial creditors, the relationship is based on a financial contract, on which the assistance is extended in the form of a loan or debt security. Code differentiates between financial creditors and operational creditors. Financial creditors are those whose relationship with the entity is a pure financial contract, such as a loan or debt security. Operational creditors are those whose liability from the entity comes from a transaction on operations. In its report, the BLRC had considered enabling the operational creditors, the supplier of goods or providers of services, to trigger the resolution process and devised a proper mechanism for the same.


Key Definitions

As per the provisions of Section 3 (10), “creditor” means any person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree-holder[4]. Section 3 (11) defines "debt" means a liability or obligation in respect of a claim which is due from any person and includes financial debt and operational debt[5]. Based on the said two definitions, it is necessary to understand the terminologies 'Operational Creditor', 'Financial Creditor', 'Operational Debt' and 'Financial Debt' in detail.


Section 5 (7)[6] "financial creditor" means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred;


Section 5 (8)[7] “financial debt” means a debt along with interest, if any, which is disbursed against the consideration for the time value of money.

Section 5 (20)[8] "operational creditor" means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred.


Section 5 Subsection (21)[9] of the Code defines operational debt. "Operational debt” means a claim in respect of the provision of goods or services, including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority;


INTELLIGIBLE DIFFERENTIA BETWEEN THE FINANCIAL CREDITORS AND OPERATIONAL CREDITORS.


The definitions demarcate the financial debt from the operational debt, wherein the former is disbursed against the consideration for the time value of money while the latter deals with the claim in respect of the provision of goods or services, including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority. However, from a different perspective and practical standpoint, it can be seen that both types of creditors would give either money in terms of loans or money's worth in terms of goods and services to the Corporate Debtor during the course of its business. Unless they hold more than 10% of the total admitted debt, the operational creditors are not given any representation in the Committee of Creditors and do not have any voting right in any of the matters placed before the Committee of Creditors. Hence, there is no intelligible differentia between the two sets of creditors regarding being had to the object sought to be achieved by the Code, namely, insolvency resolution, and if that is not possible, then ultimately liquidation. It is also argued that the Code discriminates against the two sets of creditors, which does not have an intelligible differentia, is manifestly arbitrary and violative of Article 14 of the Constitution of India. While deciding on various writ petitions alleging discrimination among the Financial Creditors and Operational Creditors, the Hon’ble Supreme Court by referring to the Insolvency and Bankruptcy Bill in the Notes on Clause 8 and The report of the Bankruptcy Law Reforms Committee- Volume I: Rationale and Design had observed that - a perusal of the definition of ―financial creditor and ―financial debt makes it clear that financial debt is a debt together with interest, if any, which is disbursed against the consideration for the time value of money. It may further be money borrowed or raised in any of the manners prescribed in Section 5(8) or otherwise, as Section 5(8) is an inclusive definition.


On the other hand, an ―operational debt‖ would include a claim in respect of the provision of goods or services, including employment, or a debt in respect of payment of dues arising under any law and payable to the Government or any local authority[10]. To conclude that there is intelligible differentia between the Financial Creditors and Operational Creditors, the Court had observed that the former is a secured creditor. In contrast, most of the Operational Creditors are unsecured in nature. The Court also concreted the differentiation between the two sets of creditors by identifying the nature of the facilities extended by them and noted that the Corporate Debtor is utilising the term loan of working capital loan provided by the Financial Creditors for setting up their business and the said amount is being provided as cash in pretty large sums. On the contrary, the operational creditor’s role is confined to supplying goods or services to the Corporate Debtor based on a contract. The said amount is relatively lesser and used mainly for the operation of the business. The Hon'ble Supreme Court also observed that the financial creditors stand on a different footing as operational creditors when it comes to the repayment of the loan amount, power to recall the due amount, forum for dispute resolution etc. The operational creditors have only very limited avenues, such as Arbitration for dispute resolution, whereas the Financial Creditors have better statutory support in such cases. Apart from all the above, the Financial Creditors are providing assistance and support to the Corporate Debtor from the very initial stage of the Corporate Debtor after assessing the feasibility and viability of the project, which Operational Creditors are not doing. Thus, the Hon'ble Supreme Court of India has concluded that there is a clear distinction between Financial Creditors and Operational Creditors. There is no arbitrariness or discrimination between them per the Code's provisions.


‘COMMERCIAL WISDOM’ OF THE COMMITTEE OF CREDITORS IS OPPRESSIVE TO OPERATIONAL CREDITORS?

With the clear differentiation of the Financial and Operational Creditors, the position of the creditors became unambiguous. As per Section 18(c)[11] of the Code, the Interim Resolution Professional shall constitute the Committee of Creditors, which comprise all financial creditors of the Corporate Debtor[12]. Where the corporate debtor has no financial debt or where all financial creditors are related parties of the corporate debtor, the Committee shall be set up by Regulation 16[13]. The Committee of Creditors plays a very prominent role in the insolvency resolution of the Corporate Debtor throughout the process. The said role is very predominant when it comes to the classification of the creditors, determining the payment to be made to the operational creditors, and assessing the feasibility and viability of the plan approval of the Resolution Plan[14] under the Code.


It is worth emphasising that the Hon'ble Supreme Court of India, in Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta &Ors[15], had proclaimed that complete freedom and discretion have been given to the Committee of Creditors in the classification of creditors and payment of debts and observed that Section 30(2)(b) of the Code refers to Section 53, not in the context of priority of payment of creditors, but only to provide for a minimum payment to operational creditors. However, this again does not in any manner limit the Committee of Creditors from classifying creditors as financial or operational and as secured or unsecured. Full freedom and discretion have been given, as has been seen hereinabove, to the Committee of Creditors to classify creditors so and to pay secured creditors amounts that can be based upon the value of their security, which they would otherwise be able to realise outside the process of the Code, thereby stymying the corporate resolution process itself.


Also, the Hon'ble Supreme Court of India, in Ghanashyam Mishra and Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited[16] held that what is left to the majority decision of CoC is the “feasibility and viability” of a resolution plan, which is required to take into account all aspects of the Plan, including the manner of distribution of funds among the various classes of creditors. It has further been held that CoC is entitled to suggest a modification to the prospective resolution applicant so that carrying on the business of the Corporate Debtor does not become impossible, which suggestion may, in turn, be accepted by the resolution applicant with a consequent modification as to the distribution of funds, etc. It has been held that what is important is the commercial wisdom of the majority of creditors, which is to determine, through negotiation with the prospective resolution applicant, how and in what manner the corporate resolution process is to take place.


In Para nos 33, 35, 37, 38, 42 & 44 in the matter of K. Sashidhar Vs. Indian Overseas Bank and Ors[17], wherein the Hon'ble Supreme Court had established the limited judicial review of the Adjudicating Authority or Appellate Tribunal to interfere with the commercial wisdom of the Committee of Creditors. The Apex Court had observed that besides, the commercial wisdom of CoC has been given paramount status without any judicial intervention for ensuring the completion of the stated process within the timelines prescribed by the I & B Code. There is an inherent assumption that financial creditors are fully informed about the viability of the corporate debtor and the feasibility of the proposed resolution plan. They act based on a thorough examination of the proposed resolution plan and assessment of their team of experts. The opinion on the subject matter after due deliberations in COC meetings through voting is a collective business decision. The legislature, consciously, has not provided any ground to challenge the "Commercial Wisdom" of the individual financial creditors or their collective decision before the Adjudicating Authority. That is made non-justiciable.


Hon’ble Supreme Court of India, in Maharashtra Seamless Limited vs Padmanabhan Venkatesh &Ors[18], had observed that the Appellate Authority has, in our opinion, proceeded on equitable perception rather than commercial wisdom. On its face, releasing assets at a value 20% below the liquidation value arrived at by the valuers seems inequitable. Here, we feel the Court ought to cede ground to the commercial wisdom of the creditors rather than assess the resolution plan based on quantitative analysis. Such is the scheme of the Code. Section 31(1) of the Code lays down in clear terms that for final approval of a resolution plan, the Adjudicating Authority has to be satisfied that the requirement of Sub-section (2) of Section 30 of the Code has been complied with. The proviso to Section 31(1) of the Code stipulates the other point on which an Adjudicating Authority must be satisfied. That factor is that the resolution plan has provisions for its implementation. The scope of interference by the Adjudicating Authority in limited judicial review has been laid down in the case of Essar Steel (supra), the relevant passage (para 54) of which we have reproduced in the earlier part of this judgment. The issue of MSL in their appeal is that they want to run the Company and infuse more funds. In such circumstances, we do not think the Appellate Authority ought to have interfered with the order of the Adjudicating Authority in directing the successful Resolution Applicant to enhance their fund inflow upfront."


From the above judgments, it is evident that the 'commercial wisdom' of the Committee of Creditors has been provided with paramount status, and the Adjudicating Authority have minimal powers to interfere in that commercial wisdom. However, the term 'commercial wisdom' is not defined anywhere in the Code of Regulations. The Apex Court had, through its several judgments, underlined that the Adjudicating Authority have to act within the limited scope of Section 30 and 31 of the Code and does not have to analyse a plan approved by the CoC on a quantitative basis. The said opinion is formed on a presumption that the Financial Creditors, who are controlling the CoC, have in-depth knowledge about the financial position of the Corporate Debtor. Their interest is to revive the Corporate Debtor after the compliance specified under Section 30 of the Code. To protect the interest of the Operational Creditors, who do not have any say in the Resolution Process, Section 30 (1)(b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board, which shall not be less than-


(i) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under section 53; or

(ii) the amount that would have been paid to such creditors if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of section 53, whichever is higher


However, if the Resolution Plan is approved for a value lesser than the liquidation value, the dues towards the financial creditors and employees/workmen are higher than the plan consideration. The allocation of the plan amount as specified in section 30(1)(b) may not be sufficient to pay the debts of the operational creditors. As the operational creditors shall not form part of the Committee of Creditors, they have only a minimal role in negotiating and finalising the plan consideration. By vesting the Committee of Creditors with the discretion of accepting resolution plans only with financial creditors, operational creditors having no vote, the Code differentiates between the two types of creditors, which is prejudicial to the operational creditors.


Protecting the interest of all stakeholders is one of the objectives of the Code. However, in reality, Financial Creditors, who have security interests and have absolute control over the CoC, are giving more prominence to the recovery of their money rather than reviving the Corporate Debtor and protecting the interest of all the stakeholders of the Corporate Debtor. The Operational Creditors are often provided with either nominal or NIL values. Due to the lack of equity jurisdiction, the Adjudicating Authority and Appellate Authority have to cede to the commercial wisdom of the Committee of Creditors.


ENHANCEMENT OF THE THRESHOLD- NEGATIVE IMPACT ON OPERATIONAL CREDITORS.

Section 433(e) of the Companies Act, 1956 envisaged the inability to pay its debts as grounds for winding up a Company. As per Section 434 of the Companies Act, (1) A company shall be deemed to be unable to pay its debts - (a) if a creditor, by assignment or otherwise, to whom the Company is indebted in a sum exceeding one lakh rupees then due, has served on the Company, by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the Company to pay the sum so due and the Company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor. With the introduction of the Companies Act, 2013, Section 272(1)(b) was introduced along the same lines as Section 433(e), which enables any creditor or creditors, including contingent, prospective creditors or creditors, to present a petition to the Tribunal[19] for the winding up of a company. However, the said Section was not notified. In the exercise of the powers conferred by sub-section (3) of section 1 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Central Government had notified the corresponding sections of the Code. The provisions relating to the Creditors winding up had later been omitted from the Companies Act due to the introduction of the Insolvency and Bankruptcy Code, 2013. While introducing the IBC, the minimum threshold to invoke the provisions of Sections 7,9 and 10 of the Code was Rupees One Lakh only[20], which enables an operational creditor to have due of the said amount to seek remedy under the Code. Ministry of Corporate affairs had, by exercising its powers under the proviso to Section 4, enhanced[21] the threshold limit to Rupees One Crore, which had created much confusion amongst the business.


As per Section 7(1)[22], A financial creditor, either by itself or jointly with 2[other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the Central Government, may apply for initiating corporate insolvency resolution process against a corporate debtor before the Adjudicating Authority when a default has occurred. However, Section 8 and 9 of the Code, which enables an Operational Creditor to apply the Code for initiating the CIRP, does not provide for filing a joint application with other Operational Creditors, so a Financial Creditor who has a claim of less than Rupees One Crore may apply for initiating the CIRP jointly with other Financial Creditors. Still, the said facility is not provided to the Operational Creditors.


The threshold limit under the Insolvency and Bankruptcy Code (IBC) for invoking an application may have been enhanced from ₹1 lakh to ₹ one crore in a welcome move from the standpoint of a corporate debtor. Still, it could leave many creditors within that bracket without a remedy under the Companies Act (C.A.) or the IBC. With the introduction of the IBC, the Government had deleted Section 271(2) of the CA, 2013, and asked creditors to approach the Tribunal under the IBC in case a company cannot pay its debts. However, with the Enhancement of the limit from ₹1 lakh to ₹ one crore, those within that bracket cannot exercise their rights under C.A. or the IBC.[23]


Thus, through the Enhancement of the limit to invoke the provisions of the Code, the operational creditors, who are suppliers and service providers, having dues less than Rupees One Crore, have no remedy available neither under the Companies Act 2013 nor under the Insolvency and Bankruptcy Code, 2016.


CONCLUSION

Insolvency and Bankruptcy Code is an Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected in addition to that or incidental to that. Operational Creditors play a very prominent role in a nation's economy, and most are operating their business at a small or medium level. Unlike the Financial Creditors who have clear information about the financial position of a Corporate Debtor, Operational Creditors are dealing with a presumption that 'All is well with their financial affairs of it. Financial Creditors, holding sufficient security interest, are being provided with 'commercial wisdom' to determine the fate of the CIRP and with limited jurisdiction of the Adjudicating and Appellate Authority over the said 'commercial wisdom', the operational creditors are left in the lurch. In many Corporate entities, the debts owed to the Operational Creditors are equal to or more than the debts owed to the Financial Creditors. The Apex Court had clarified beyond ambiguity that there is a discernible difference between the Financial and Operational Creditors. With that observation, read along with other judgments, the CIRP had leaned fully in favour of the Financial Creditors, and the Operational Creditors are left with little or no remedies under the Code.


The scheme of the Insolvency and Bankruptcy Code, 2016 is to maximise the value of assets, promote entrepreneurship, promote the availability of credit and balance the interests of all the stakeholders.[24]. Each provision of the Code was drafted keeping these principles in mind, and the introduction of this legislation was done to replace the existing framework for insolvency, which was visibly inadequate, ineffective and wrought with delays.[25]. The Code came into effect on December 01 2016 and is attaining five years of its operation. During the said period, the ecosystem was developed with the installation of various bodies/authorities such as the Insolvency and Bankruptcy Board of India(IBBI), Insolvency Professional Agencies (IPA) & Insolvency Professionals(I.P.), Information Utilities(I.U.) and Adjudicating Authorities and Appellate Authorities (A.A.) etc. The new legislation had faced many challenges in the Court of law, and the legislature had amended the law on various occasions to help the evolution of the same organically. The Honorable Supreme Court of India in Swiss Ribbons Pvt. Ltd. &Anr v. Union of India &Ors[26] had analysed the constitutionality of the various provisions of the Insolvency and Bankruptcy Code, 2016. It affirmed the constitutionality of the same in a very constructive manner. While disposing of the writ petitions concerning the constitutionality of the constitution of the NCLT and NCLAT, the Hon'ble Supreme Court had observed that an additional affidavit filed by the Union of India and assured the compliance with directions of the Supreme Court in judgments of Madras Bar Association (I) and Madras Bar Association (III) and a Selection Committee was constituted to make appointments of Members of the NCLT. While considering the grounds of discrimination among two sets of creditors, the Court had observed an intelligible differentia that separated two kinds of creditors so long as there was some rational relation between creditors, so differentiated, with the object sought to be achieved by legislation. Since equality is only among equals, no discrimination results if the Court can be shown that there is an intelligible differentia that separates two kinds of creditors so long as there is some rational relation between the creditors so differentiated, with the object sought to be achieved by the legislation.[27] The insertion of Section 12A, which enables the Applicant to withdraw an admitted CIRP Application with the approval of ninety per cent of the Committee of Creditors, was also passed the muster of the constitution on the ground that the financial creditors have better understanding and knowledge about the financial position of the Corporate Debtor. They can approve an omnibus approval based on their judgement. If the Committee of creditors arbitrarily rejected a just settlement and/or withdrawal claim, NCLT, NCLAT could always set aside such a decision under Section 60 of the Code. Section 12A of the Code also passed constitutional muster.[28] After upholding the intelligible differentia between the operational creditors and financial creditors, section 30(2) of the Code has been amended to ensure a priority in payment to the Operational Creditors. However, the Section does not provide a minimum payment to them. Due to that reason, the operational creditors often ended up with the minimal recovery of their due amount. Similarly, the matter of Maharashtra Seamless Limited vs Padmanabhan Venkatesh &Ors[29], the Hon’ble Supreme Court of India had held that Court ought to cede ground to the commercial wisdom of the creditors rather than assess the resolution plan based on quantitative analysis. So, the Adjudicating Authority must mechanically approve the Resolution Plan if the same falls within the four corners of Section 30(2) of the Code.


Given the intent of the lawmaker to balance the interest of all stakeholders, the provisions of Sections 8 and 9 of the Code enable the operational creditors to file a joint application with Adjudicating Authority for initiating the CIRP against a Corporate Debtor who had defaulted their debts. To provide a level playing field among the two sets of classified creditors and to provide an alternate remedy to the Operational Creditors, who do not have remedies available under the Code as well as the Companies Act, the Government may renotify Section 271(1)(b) of the Companies Act, 2013, to enable such creditors having debts of less than Rs 1 Crore to approach the Tribunal to file a petition for the winding-up of the Company.


Bijoy P Pulipra LL.M, FCS, IP, RV

Advocate



Reference [1] Insolvency and Bankruptcy Board of India “ The report of the Bankruptcy Law Reforms Committee- Volume I: Rationale and Design ’ [2015] 1-155, 10 <https://ibbi.gov.in/resources/reports?page=2> Accessed December 2021 [2]Insolvency and Bankruptcy Board of India “ The report of the Bankruptcy Law Reforms Committee- Volume I: Rationale and Design ’ [2015] 1-155, 13<https://ibbi.gov.in/resources/reports?page=2> Accessed December 2021 [3] Insolvency and Bankruptcy Board of India “ The report of the Bankruptcy Law Reforms Committee- Volume I: Rationale and Design ’ [2015] 1-155, 54 <https://ibbi.gov.in/resources/reports?page=2> Accessed December 2021 [4]S 3(10), Insolvency and Bankruptcy Code, 2016. [5]S 3(11), Insolvency and Bankruptcy Code, 2016. [6]S 5(7), Insolvency and Bankruptcy Code, 2016 [7]S 5 (8), Insolvency and Bankruptcy Code, 2016 [8]S 5(20), Insolvency and Bankruptcy Code, 2016 [9]S 5(21), Insolvency and Bankruptcy Code, 2016 [10]Swiss Ribbons Pvt. Ltd. and Ors. vs. Union of India (UOI) and Ors. (2019 - S.C.) MANU /SC / 0079 / 2019 Equivalent Citations [ 2019 ] 152 SCL 365 ( SC ) [ 2019 ] 148 CLA 419 ( SC ) [ 2019 ] 213 CompCas 198 ( SC ) ( 2019 ) 1 CompLJ 273-364 ( SC ) AIR 2019 SC 739 2019 ( 2 ) ALD 147 I ( 2019 )BC 259 ( SC ) ( 2019 ) 4 SCC 17 2019 ( 2 ) SCALE 5 2019 ( 7 ) SCJ 579 123(1) CWN 87 2019 ( 2 ) CTC 168, Para 23 [11]S 18(3), Insolvency and Bankruptcy Code, 2016 [12]S 21(2), Insolvency and Bankruptcy Code, 2016 [13] Reg 18, Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 [14]Section 5(26), Insolvency and Bankruptcy Code, 2016 [15]Committee of Creditors of Essar Steel India Limited vs Satish Kumar Gupta and Ors. (15.11.2019 - S.C.) : MANU/SC/1577/2019 [16]Ghanashyam Mishra and Sons Private Limited vs Edelweiss Asset Reconstruction Company Limited and Ors. (13.04.2021 - S.C.) : MANU/SC/0273/2021, Para 86,87 [17] K. Sashidhar vs Indian Overseas Bank and Ors. (05.02.2019 - S.C.) : MANU/SC/0189/2019, Para 52 [18]Maharashtra Seamless Limited vs Padmanabhan Venkatesh and Ors. (22.01.2020 - S.C.) MANU/SC/0066/2020, Para 28 [19]National Company Law Tribunal. [20]S 4, Insolvency and Bankruptcy Code. [21]Notification F. No. 30/09/2020 dated March 24 2020, Ministry of Corporate Affairs [22]S 7(1), Insolvency and Bankruptcy Code, 2016 [23]https://www.thehindubusinessline.com/news/national/ibc-threshold-limit-raise-may-leave-some-creditors-stranded/article34169213.ece [24] An Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and to balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected in addition to that or incidental thereto. [25] Report of the Insolvency Law Committee, Ministry of Corporate Affairs, Government of India (March MCA 2018),11 [26]Swiss Ribbons Pvt. Ltd. and Ors. vs. Union of India (UOI) and Ors. (2019 - S.C.) MANU /SC / 0079 / 2019 Equivalent Citations [ 2019 ] 152 SCL 365 ( SC ) [ 2019 ] 148 CLA 419 ( SC ) [ 2019 ] 213 CompCas 198 ( SC ) ( 2019 ) 1 CompLJ 273-364 ( SC ) AIR 2019 SC 739 2019 ( 2 ) ALD 147 I ( 2019 )BC 259 ( SC ) ( 2019 ) 4 SCC 17 2019 ( 2 ) SCALE 5 2019 ( 7 ) SCJ 579 123(1) CWN 87 2019 ( 2 ) CTC 168 [27]Ibid 45. [28]Ibid 102 [29] Maharashtra Seamless Limited vs Padmanabhan Venkatesh &Ors. (2019) MANU/SC/0066/2020

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