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IBC India Guide India’s jump from Rank 130 to Rank 100 in ease of doing business can be largely attributed to various legal reforms in the country, including the Insolvency and Bankruptcy Code, 2016 (IBC), which has been notified with a vision to resolve the rampant insolvency situation. IBC preliminarily provides for the revival of insolvent corporate entities through a corporate insolvency resolution process (CIRP) in a time-bound manner, failing which such entities undergo liquidation. As per the news sources, private equity players have raised stressed assets funds totalling over USD 4 billion in the past 3 years, sensing an opportunity in the increasing number of bad assets in the banking system. Over the past two years, IBC has proved instrumental in addressing the corporate insolvency situation in the country, however, several crucial issues have emerged under IBC framework, including challenges to Tandoor Manufacturer its constitutionality, questions on time-bound pr...

IBC | Legislative Alert | CIRP | Creditors in a class, authorised  Further to the promulgation of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 on 6 June 2018 (“ 2018 Ordinance ”), the Insolvency and Bankruptcy Board of India (“ IBBI ”) has substantially amended the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“ CIRP Regulations ”) vide the IBBI (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2018, dated 3 July 2018 (“ CIRP Amendment ”)  Key Highlights The key highlights of the CIRP Amendment are: timelines provided for various activities during the corporate insolvency resolution process (“ CIRP ”), including setting out the timeline for submission of claims, constitution of committee of creditors (“ COC ”), calling COC meetings, voting by members of COC, release of invitation of expression of interest (“ EOI ”), information memorandum (“ IM ”), evaluation matrix (“ EM ”), r...

Security of Home Buyers and other Allottees under IBC On 6 th  June 2018, the Insolvency and Bankruptcy Code, 2016 (“IBC”) was amended vide the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 (“Ordinance”). Pursuant to the Ordinance, home buyers and allottees under the Real Estate (Regulations and Development) Act, 2016 (“RERA”) got the status of financial creditors under IBC (pursuant to the amendment to the definition of financial debt). This will enable the home buyers and other allottees [1]  to be able to invoke Section 7 of IBC against defaulting promoters and also have representation in the committee of creditors through an authorised representative (the authorised representative being a resolution professional appointed by the NCLT, as per the stated process). The amendments made by the Ordinance  inter alia brings  IBC in closer sync with Section 18 of RERA which affords a right to allottees to demand i) refund of the entire amount pai...

Are home buyers secured financial creditors or unsecured creditors under IBC? On June 6, the Insolvency and Bankruptcy Code, 2016 (IBC) was amended through the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 (Ordinance). Following the ordinance, home buyers and allottees under the Real Estate (Regulations and Development) Act, 2016 (RERA) got the status of financial creditors under IBC (pursuant to the amendment to the definition of financial debt). This will enable the home buyers and other allottees (refers to buyers and long-term lessees under real estate projects) to be able to invoke Section 7 of IBC (which allows financial creditor(s) (either individually or jointly) to file an application in NCLT for initiating corporate insolvency resolution process against a defaulting company) against defaulting promoters. Further, they have representation in the committee of creditors through an authorised representative (the authorised representative being a resolutio...

Budget 2019: Judicial Reform Is What This Economy Needs Now Usually, a vote on account is a non-event in the cycle of India’s annual media event surrounding the budget. However, this year it was different for a few reasons: the jobs data—disputed or otherwise—just prior to the vote on account revealed an alarming trend in an economy already ravaged by demonetisation and the Goods and Services Tax; and of course, the impending elections. To those who watched the budget speech, it was largely propaganda and sops. Everyone got a little bit and a promise for lots more to come, when the Finance Minister laid out his vision for the next ten years. Rural subsidies for poor farmers (Pradhan Mantri Kisan Samman Nidhi), salary deductions raised and income tax limit raised, a twenty-four-hour timeframe to process all income tax returns and the promise of anonymity between income tax assessor and assessee. Even a pension scheme for every Indian (Pradhan Mantri Shram-Yogi Maandhan). Indi...

Legal fraternity divided on an apex court order on NPA circular Mumbai-Legal experts have given mixed views on the Supreme Court judgement quashing the Reserve Bank's circular on bad loan recognition saying while the ruling is a "great" setback for banks, it also offers relief to the troubled companies.  Earlier in the day, the apex court, on a petition filed by power firms, held the February 12, 2017 circular of the Reserve Bank as unconstitutional. A detailed verdict is awaited as to what would be status of the resolution of those companies already arrived at under the circular. The most salient feature of the circular is that it mandates banks to recognize even one- day defaults and resolve the issue within 180 days failing which the account in question should be sent to NLCS for the bankruptcy process. Leading law firm Cyril Amarchand Mangaldas termed the order as a major development. "While it is too early to say but if banks voluntarily still invoke ...

Letspedia Knowledge Series – India Update Part 2 of 2019 We welcome you to the most recent version of Letspedia Knowledge Series, a quarterly investigation of curated points relating to basic legitimate and administrative advancements that can make hazard for organizations in India.  With a particular spotlight on administration, this emphasis of 'India Update – Part 2 of 2019' looks at key qualities of review administration system in India through the making Tandoor Manufacturer of the National Financial Reporting Authority, rising job of crime scene investigation in due steadiness and consistency wellbeing reviews, just as commitments of inn proprietors and administrators concerning anticipation of inappropriate behavior.  We additionally share our point of view on developing issues around REITs, antagonistic takeovers, corporate progression  arranging and the expanded job of intervention in India's endeavours to advance elective question goal...