Dayal Singh’s Post

Extension under IBC provided more than once?? As per IBC, Section 12(3) states On receipt of an application under sub-section (2), 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: Provided that any extension of the period of corporate insolvency resolution process under this section shall not be granted more than once. Further On 4th Feb 2024, Go First RP has filed for further second extension in exceptional cases stating 3 parties shown interest in taking over the Carrier and also deposit earnest money. Hence,On 13th Feb, Today NCLT extended the time limit for a further 60 days in an exceptional case. Furthermore, If the airline finds no takers even after 330 days, it is most likely to go into liquidation. Takeaway:- Section 12(3) first provision even though states the Extension can be grant at once and rest 60 days is for Legal proceedings but NCLT can use their discretionary power to provide second extension only in Exceptional case. https://lnkd.in/dCYtgy39

In the chronicles of aviation woes, the Go First (formerly recognized as Go Air) insolvency saga has proven resilient, maintaining a simmering presence. Here’s the tale: The narrative commenced with Go First, rebranded from Go Air, opting for voluntary insolvency under Section 10 of Insolvency and Bankruptcy Code, 2016 owing to substantial revenue losses, primarily attributing blame to the American aircraft makers, Pratt and Whitney. On the 10th of May in the year 2023, the National Company Law Tribunal (NCLT) officially admitted the insolvency petition. Since then, a year has elapsed, yet the insolvency remains unresolved Despite NCLT’s benevolence in granting three extensions thus far, Go First finds itself in the last leg of extension. This lifeline has recently been granted by the Adjudicating Authority, paving a path towards concluding the Corporate Insolvency Resolution Process by the deadline of 3rd August, 2024. IDBI Bank, Bank of Baroda, Central Bank of India are some of the few lenders in the Go First's case Let's see if the law of the land revives Go First or if it heads towards liquidation. #law

JSA Prism | Insolvency | March 2024 NCLT has inherent power to recall an order passed by it for approving a resolution plan   A 3 (three) judge bench of the Hon’ble Supreme Court of India, headed by Chief Justice of India, held that (a) the National Company Law Tribunal has inherent powers to recall its own order(s), which includes an order approving resolution plan for a corporate debtor; and (b) even if a claim submitted by a creditor is in a form not specified under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 the same has to be given due consideration by the Resolution Professional.   To read further details, please click here: https://lnkd.in/gCbaUbWt Varghese Thomas | Aditi Sehgal | Fatema Dalal Kachwalla | Ahsan Allana | Bhaskar Dhandharia #jsa #leadinglawfirm #leadinglawyers #legalupdates #insolvencylaw  #prism

We are delighted to share the third article for Volume 17(1) of the NUJS Law Review. AIRLINE INSOLVENCY IN INDIA : BALANCING INTERESTS BETWEEN THE INSOLVENCY AND BANKRUPTCY CODE AND THE CAPE TOWN CONVENTION by Thejas Velaga & Aastha Gupta. This timely article examines the conflict between India's Insolvency and Bankruptcy Code ('IBC') and the Cape Town Convention ('CTC') in the context of airline insolvencies, highlighted by the recent Go First Airlines case. The authors argue that while implementing the CTC is crucial, it is not a panacea for all issues plaguing aircraft repossession during insolvency. The paper critically analyses the government's recent notification exempting aircraft leases from the IBC moratorium and proposes an innovative "Alternative C" approach, inspired by the Luxembourg Protocol to the CTC. This balanced solution aims to protect both national interests in airline revival and lessors' rights to repossession. The authors emphasise the need for a thoughtful, practical approach that considers India's unique aviation landscape, suggesting modifications to the CTC Bill and improvements in the regulatory framework for aircraft deregistration. The article can be accessed here: https://lnkd.in/gZjrPbr3

Supreme Court Orders Liquidation of Jet Airways After SRA's Repeated Delays: It means no more Jet Airways airline in future. In a recent judgment, the Supreme Court of India ordered the liquidation of Jet Airways, rejecting the revival efforts led by the Successful Resolution Applicant (SRA)/Successful bidder, the consortium of Murari Lal Jalan and Florian Fritsch. This decision underscores the court's commitment to enforcing strict timelines under the Insolvency and Bankruptcy Code (IBC) and addresses concerns about the potential misuse of the judicial process in insolvency proceedings. Facts of the Case: 1)   Jet Airways entered insolvency proceedings in 2019, and a revival plan by the SRA was approved in 2021. The SRA committed to an infusion of funds with specific timelines, including a first tranche of ₹350 crore to be paid within 180 days of the "Effective Date." 2)   Despite multiple extensions granted by NCLT, NCLAT, and even the Supreme Court, the SRA failed to meet the critical payment deadlines 3)   The Supreme Court observed that the SRA’s repeated delays and requests for further time amounted to an abuse of judicial leniency. Judgement: a)   The court noted that prolonged delays by the SRA had already degraded Jet Airways' potential for revival. b)   The court underscored that non-compliance with Resolution Plan terms, especially after multiple extensions, leaves no choice but liquidation, as per Section 33(3) of the IBC. c)   The court’s decision highlights that the judicial process cannot be used as a tool to delay proceedings without consequence. d)   As a direct penalty, the court ordered the forfeiture of the SRA’s initial deposit of Rs. 200 Crore and encashing Performance Bank Guarantee of Rs. 150 Crore. The SRA’s failure to adhere to the Resolution Plan could have long-term reputational effects, potentially influencing its credibility in future. #IBC #InsolvencyLaw #Banking #FinancialInstitutions #CorporateLaw#LegalUpdate, #lawnews, #legaltrends

𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆𝘀' 𝘄𝗶𝘁𝗵 𝗚𝗮𝘂𝗿𝗶: 𝟮𝟮𝗻𝗱 𝗪𝗲𝗲𝗸-𝟮𝟮𝗻𝗱 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲: Today, on my birthday, I'm excited to share insights into a significant development in the realm of corporate law that has far-reaching implications for creditors and debtors alike. 𝗜𝗕𝗖 𝗔𝗺𝗲𝗻𝗱𝗺𝗲𝗻𝘁: 𝗦𝗮𝗹𝗲 𝗼𝗳 𝗔𝘀𝘀𝗲𝘁𝘀 𝗼𝗿 𝗥𝗲𝘀𝗼𝗹𝘂𝘁𝗶𝗼𝗻 𝗣𝗹𝗮𝗻𝘀 𝗼𝗻 𝗮 𝗦𝗲𝗴𝗿𝗲𝗴𝗮𝘁𝗲𝗱 𝗕𝗮𝘀𝗶𝘀 – 𝗔 𝗚𝗮𝗺𝗲 𝗖𝗵𝗮𝗻𝗴𝗲𝗿? The recent amendments to the Insolvency and Bankruptcy Code (IBC) have introduced the concept of the sale of assets or resolution plans on a segregated basis specifically under Regulation 37 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. This significant change aims to enhance the flexibility and efficiency of the insolvency resolution process in India. Let’s delve into what led to this amendment, its impact on the IBC mechanism, and who stands to benefit the most.   Traditionally, the IBC required a single resolution plan for the entire corporate debtor, which often proved cumbersome and time-consuming, especially for large conglomerates with diverse business units. The segregated basis approach was introduced to allow for the sale of different units or assets separately, facilitating a more targeted and efficient resolution.   𝗪𝗵𝘆 𝗜𝘁 𝗛𝗮𝗽𝗽𝗲𝗻𝗲𝗱: - Large companies with multiple business units faced significant hurdles in finding a single resolution applicant willing to take over the entire entity. - Separate sales of assets can often fetch higher value than a bundled sale, thus maximizing returns for creditors. - Allows resolution professionals to devise more flexible and tailored solutions for different parts of the business.   𝗜𝗺𝗽𝗮𝗰𝘁 𝗼𝗻 𝘁𝗵𝗲 𝗜𝗕𝗖 𝗠𝗲𝗰𝗵𝗮𝗻𝗶𝘀𝗺: - Facilitates quicker and more efficient resolutions, particularly for large and complex insolvencies. - Creditors may achieve better recovery rates compared to a single resolution plan. - Attracts a wider pool of bidders interested in specific assets or business units rather than the entire distressed entity.   𝗖𝗮𝘀𝗲 𝗟𝗮𝘄: A notable case that highlights the significance of asset segregation in resolution plans is the case of 𝗘𝘀𝘀𝗮𝗿 𝗦𝘁𝗲𝗲𝗹.Although this case pre-dates the amendment, the complexity and challenges faced during its resolution underscored the need for more flexible approaches, such as the segregated sale of assets, to expedite and optimize the insolvency resolution process.

INDIA NEVER ENDING EXTENSION AND NOW AGAIN 60 DAYS EXTENSION GRANTED TO GO FIRST AIRLINE LTD BY NCLT WHICH DOWN SHUTTER LAST YEAR ON 2ND MAY 2023 The National Company Law Tribunal on Tuesday extended the deadline for another 60 days to complete the resolution process of grounded airline Go First. A two-member bench of the Delhi-based NCLT admitted the plea filed by the resolution professional (RP) of Go First seeking an extension of the timeline to complete the corporate insolvency resolution process (CIRP). Diwakar Maheshwari, appearing for RP, argued that so far three parties have submitted their expression of interest for Go First and deposited the earnest money. These firms are expected to submit resolution plans for Go First which has been undergoing CIRP since May 10, 2023. This is the second such extension granted by the NCLT. The tribunal had on November 23 last year granted an extension of 90 days, which ended on February 4. The three firms, including budget carrier Spicejet, Sharjah-based Sky One, and African continent-focused firm Safrik Investments, have shown interest in buying Go First. The Insolvency & Bankruptcy Code (IBC) mandates completion of CIRP within 330 days, which includes the time taken during litigations. As per Section 12(1) of the Code, CIRP should be completed within 180 days. However, the maximum time within which CIRP must be mandatorily completed, including any extension or litigation period, is 330 days, failing which the corporate debtor is sent for liquidation. https://lnkd.in/gv3H9_fd

The Insolvency and Bankruptcy Board of India (IBBI) has recently issued self-regulatory guidelines addressing the need for maximising the value of corporate debtor’s assets. IBBI which acts as a regulating body for insolvency and bankruptcy cases has released these guidelines to mitigate value erosion by curbing procedural delays and increase co-ordination among members. The guidelines cover various aspects such as objectivity and integrity; independence and impartiality; professional competence and participation; cooperation, supervision and timelines; confidentiality; costs; meeting of the CoC; sharing of information; and feasibility and viability of corporate debtor. It stresses on the need to enhance transparency in the insolvency resolution process and also aims to provide a smoother and time effective approach to decision making by the members of the Committee of Creditors (CoC). Arthavat Legal and Compliance Solutions Private Limited Arunkumar NT Anuradha Garg Harsh Yadav https://lnkd.in/gBUMeKMp

Pre-packaged Insolvency in India In a significant move aimed at early detection of financial distress, the government introduced the Pre-Packaged Insolvency Resolution Process (PPIRP) in April 2021. This initiative is designed to swiftly and efficiently address corporate financial challenges, providing predictability in outcomes and enhancing value for both creditors and debtors. However, as of May 2024, only fifteen PPIRP applications have been considered. Of these, two cases were withdrawn one before admission and another after and two cases were dismissed by the NCLT. Among the remaining eleven cases, five have been resolved, while six are still under consideration. One notable case, involving Sudal Industries Limited, saw the NCLT’s decision overturned by the NCLAT. This case highlights the ongoing complexities and judicial scrutiny surrounding PPIRP. Total PPIRP Cases Resolved: 1. Amrit India (NCLT New Delhi) 2. Sudal Industries Limited (NCLT Mumbai) 3. GCCL Infrastructure and Projects (NCLT Ahmedabad) 4. Enn Tee International Limited (NCLT New Delhi) 5. Shree Rajasthan Syntex Limited (NCLT Jaipur) Admitted and Pending Resolution: 6. Mudraa Lifespaces Private Limited (NCLT Mumbai) 7. Shreemati Fashions Private Limited (NCLT Kolkata) 8. Kratos Energy & Infrastructure Limited (NCLT Mumbai) 9. RG Residency Pvt Ltd (NCLT, Principal Bench, New Delhi) 10. KVIR Towers Pvt Ltd (NCLT, Principal Bench, New Delhi) 11. Garodia Chemicals Limited (NCLT Mumbai) Withdrawn: 12. Loon Land Developers Limited (NCLT New Delhi) – After admission 13. Krrish Realtech (NCLT New Delhi) – Before admission Dismissed/Rejected: 14. CHD Developers Limited (NCLT New Delhi) – Before admission 15. Kethos Tiles Private Limited (NCLT Ahmedabad) – After admission The case in question, Jaldhara Properties and Trading Pvt. Ltd. v. Sudal Industries Ltd. & Anr., addressed the issue of whether a PPIRP application under Section 54C of the Insolvency and Bankruptcy Code (IBC) should take precedence over an earlier Section 7 application, particularly when the latter was filed before the amendments introduced by the IBC (Amendment) Act, 2021. The NCLAT ruled that the earlier Section 7 application retained its priority, underscoring the importance of respecting the sequence of filings in insolvency proceedings. This decision reinforces the principle that earlier applications should not be superseded by newer ones, maintaining the integrity and consistency of the IBC process. https://lnkd.in/g4ZeBVKB

The May edition of our monthly ‘Restructuring & Insolvency Newsletter’ discusses several topical judgments by NCLT, NCLAT and the courts. The team (Abhirup Dasgupta, Ishaan Duggal, and Ruchi Goyal) has also analyzed some of the Resolution Plans approved by the NCLT recently, and provided details on the companies admitted to insolvency or directed to be liquidated in May 2024.   Statutory Updates 1.     Discussion Paper on ‘Strengthening the process of issuance of record of default by Information Utility’ dated May 10, 2024 Recent judgments 1.     Vistra ITCL (India) Ltd & Ors v. IIFL Home Finance Ltd. & Anr and Vistra ITCL (India) Ltd & Ors v. Asset Reconstruction Company India Ltd. & Anr 2.      Reddy Veerraju Chowdary v. Resolution Professional, C.A. Sai Ramesh Kanuparthi & Anr 3.     Global Credit Capital Ltd & Anr v. Sach Marketing Pvt Ltd & Anr 4.     Sanjay D Kakade v. HDFC Ventures Trustee Company Ltd and Ors    Recent deals 2.     Resolution of Reliance Broadcast Network Ltd 3.      Resolution of Radius Infra Holdings Pvt Ltd Companies admitted to insolvency in April 2024 1.      Companies admitted to insolvency 2.     Companies directed to be liquidated     Click here to read more: https://lnkd.in/gTxtGx5A #restructuring #insolvencyandbankruptcy #statutory #update #judgements #orders #deals #liquidation #insolvency #resolutionprocess #nclat  #india  #Law #lawstudents #lawyers #lawfirmmarketing #lawyerlife #lawyering #legalinsights #generalcounsel #lawsuits  #india #inhousecounsel #legalprofession #legal #law #lawyers #lawfirms #lawdotasia