GET CONSULTATION NOW

Insolvency & Bankruptcy

Insolvency and Bankruptcy Code, a unified code came into force in 2016. The Insolvency and bankruptcy law is a form of social legislation encompassing all companies, partnership and individuals. It aims at proving relief to all of them. It undertakes to maximize the value of the assets of the debtors and also tries to balance interest of all the shareholders. The Code guarantees to achieve far-reaching reforms with a push on creditor driven insolvency resolution. It aims at prior identification of financial failure and increasing the asset value of insolvent firms/companies. It is a statutory procedure caused by insolvency through which a person is relieved of most of its debts and undergoes judiciary supervision or liquidator for the benefit of that person’s creditor.

PERSONS WHO MAY INITIATE CORPORATE INSOLVENCY RESOLUTION PROCESS:

The following person could initiate the Recovery Process on the admission of a default by the Corporate Person: (i) Financial Creditor & (ii) Operational Creditor. A Financial Creditor is a person to whom a financial debt is owed. An Operational Creditor is a person to whom an operational debt is owed.

“Operational Debt” means a claim in respect of the provision of Goods or Services, Employment or A debt in respect of the repayment 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.

PROCESS OF INITIATION OF CORPORATE INSOLVENCY RESOLUTION PROCESS:

An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in terms of section 8 of the Insolvency & Bankruptcy Code, 2016.

The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor (a) existence of a dispute, if any, and record of the pendency of the suit or Arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute; (b) the repayment of unpaid operational debt—by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or by sending an attested copy of record that the operational creditor has enchased a cheque issued by the corporate debtor.

After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operational creditor may file an application before the NCLT for initiating a corporate insolvency resolution process, in terms of section 9 of Insolvency & Bankruptcy Code 2016.

TIME DURATION TO COMPLETE INSOLVENCY PROCESS:
 
As per the mandate of section 12 of IBC, the corporate insolvency resolution process shall be completed within a period of one hundred and eighty days from the date of admission of the application to initiate such process.
 
The resolution professional may file an application to the Adjudicating Authority to extend the period of the corporate insolvency resolution process beyond one hundred and eighty days, if instructed to do so by a resolution passed at a meeting of the committee of creditors by a vote of seventy-five per cent. of the voting shares. On receipt of an application if the Adjudicating Authority is satisfied that the subject matter of the case is such that corporate insolvency resolution process cannot be completed within one hundred and eighty days, it may by order extend the duration of such process beyond one hundred and eighty days by such further period as it thinks fit, but not exceeding ninety days.
 
The Adjudicating Authority or NCLT after admission of the application under section 7 or section 9 or section 10, shall, by an order –
  1. declare a moratorium for the purposes referred to in section 14;
  2. cause a public announcement of the initiation of corporate insolvency resolution process and call for the submission of claims under section 15; and
  3. appoint an interim resolution professional in the manner as laid down in section 16 of IBC.
 
The public announcement referred to in clause (b) of sub-section (1) is made immediately after the appointment of the interim resolution professional.
We have a very efficient team who use to practice Insolvency and Bankruptcy law before NCLT and Insolvency and Bankruptcy board of India. We assist to our client at every stage of the procedure, beginning from sending notice under section 8 of the IBC, filing application under section 9 before NCLT seeking initiation of corporate insolvency process
Scroll to Top

Disclaimer & Confirmation

As per the rules of the Bar Council of India, we are not permitted to solicit work and advertise. The user acknowledges the following:

There has been no advertisement, personal communication, solicitation, invitation or inducement of any sort whatsoever from us or any of our members to solicit any work through this website.
The user wishes to gain more information about us for his/her own information and use.
The information about us is provided to the user only on his/her specific request and any information obtained or materials downloaded from this website is completely at the user’s volition and any transmission, receipt or use of this site would not create any lawyer-client relationship.
The information provided under this website is solely available at your request for information purpose only and should not be interpreted as soliciting or advertisement.
We are not liable for any consequence of any action taken by the user relying on material/information provided under this website. In cases where the user has any legal issues, he/she in all cases must seek independent legal advice, as the material contained in this document does not constitute/substitute professional advice that may be required before acting on any matter. Neither this website nor the web pages and the information contained herein constitute a contract, or will form the basis of a contract. While, every care has been taken in preparing the content of this website and web pages to ensure accuracy at the time of publication and creation, however, Rera solution assumes no responsibility for any errors, which despite all precautions may be found herein. All disputes, if any, are subject to the exclusive jurisdiction of courts at Indore, India only.

 
Deny