Introduction The Insolvency and Bankruptcy Code, 2016 (IBC, 2016) is a comprehensive legislation dealing with matters related to the functioning of an insolvent company and the disposal of its assets if required. However, before proceeding under the provisions of IBC, it is pertinent that the adjudicating authority takes a decision on whether the company can be considered insolvent. The provisions of IBC, 2016, per se, doesn’t mention the evaluation method which shall be employed while determining the insolvency of the company. However, section 6 clearly tilts the scales towards the Cash Flow ..read more

Introduction As the Securities and Exchange Board of India (SEBI) seeks to implement its new Transparency Program for Alternative Investment Funds (AIFs), venture firms and PE Funds must rethink their entire structure and plan as set out in its recent consultation papers (Papers)[i] – the five papers institute methods to bring more fairness to investors. On a plain reading, most proposals empower investors by providing a magnifying glass to investors on the flow of their money and are well-intentioned.  However, it is important to recognize that not all proposals are created equal, and so ..read more

The Ministry of Corporate Affairs in January 2023 posted a long list of changes recommended for the Insolvency and Bankruptcy Code (IBC) to revamp the existing structure of the corporate insolvency resolution process (CIRP), aiming to enhance and strengthen the current provisions and mechanisms pertaining to admitting CIRP applications, streamlining their resolution, and re-moulding the role of service providers under the IBC.[i] The wide range of proposed changes, currently offered to the general public for comments, include the restructuring of the CIRP to permit the financial creditors appr ..read more

The Insolvency and Bankruptcy Code, 2016 (IBC Code) subsumed all previous legislation pertaining to insolvency and restructuring.  The Code adopted the creditor-in-control model wherein the creditors will manage the affairs of the company under insolvency. One significant feature of creditor-in-possession of the corporate debtor (an entity under resolution) is the ousting of equity-led control of the company. As directors represent the interests of the shareholders of an entity and with a very closely knitted practice of constitution of board members in the Indian corporate regime, this b ..read more

Abstract: Globalization is at its peak form, with the rapid advancement of the internet and trade developments, due to which the regulation of the banking regime globally has gained greater importance. International organizations have taken proactive steps to ensure that there is a free flow of capital and other required financial assistance for those requiring international banking facilities. The Bank for International Settlement (BIS) is one such organization, focusing on serving central banks of other states and they have introduced various guidelines to ensure statutory compliances and ot ..read more

[A comment on the current judicial stance] Introduction In order to buttress smooth conduct of business in the economy, it is pertinent to have non-cash instruments for the business transactions. Negotiable Instruments are important to provide for the alternative of cash so that the business of the economy does not hamper. To give effect to such transactions, Negotiable Instruments (NI) like promissory note, bill of exchange and cheque etc. were introduced. Considering the importance of NI, a criminal legislation, i.e., The Negotiable Instrument Act, 1881 (‘NI Act’) was introduced with the pur ..read more

The courts perform the herculean task of interpreting and ascertaining the true meaning of the statutes and other legal texts. Intentionalism is one of the most accepted theories of statutory interpretation where primacy is accorded to the legislative intent of the lawmakers, even when it runs contrary to the text of the statute. It must be noted that the Insolvency and Bankruptcy Code 2016 (Hereinafter referred to as “The Code”) is a novel legislation and suffered multiple legislative errors which became increasingly evident from the string of Ordinances that were promulgated to plug the loop ..read more

In the wake of enactment of Notification No. S.O. 4126(E) in November 2019, which brought into effect the Part III of Insolvency and Bankruptcy Code, 2016 (IBC) only against personal guarantors, multiple petitions were filed before various high courts of the country challenging the constitutional validity of this selective application. These petitions were later transferred to the Supreme Court through a Transfer Petition filed by the Insolvency and Bankruptcy Board of India (IBBI) so as to avoid conflicting decisions and in the recent landmark decision of Lalit Kumar Jain v. Union of India &a ..read more

[An analysis of E. S. Krishnamurthy & Ors. v. M/s Bharath Hi Tech Builders Pvt. Ltd(2021)] The insolvency and bankruptcy process in India has a tumultuous history, as has Indian capitalism. From the forced liberalisation of the Indian economy as a result of the IMF conditions imposed on India during the 1991 economic crisis, according to Dr Ashok Desai (ex-economic advisor to the reforms team), to the intense bureaucratic red-tapism surrounding the insolvency and bankruptcy process until the enactment of the IBC 2016, the perception of an Indian capitalist has been markedly different from ..read more

Introduction The Limitation Act, 1963 and the Insolvency and Bankruptcy Code, 2016 (IBC) have been at odds ever since the inception of the latter. One such instance of conflict has been brought about by Section 18 of the Limitation Act. This section lays down that an admission of liability in writing shall create a fresh period of limitation which will be calculated from the time such admission was made.  This provision becomes very relevant in case of IBC matters where timely claims are of the utmost concern. A contentious question which has subsequently emerged is whether acknowledgemen ..read more