With prowess in multiple fields, we understand the complex workings of the law and handle them with
a difference. We believe in customised solutions that address our client’s legal
needs effectively. From courtroom litigation to boardroom negotiations,
you’ll definitely want INDIALAW on your side of the table.
With experienced practice heads and specialized teams overseeing Debt Recovery and Insolvency Litigation practice, we are pioneers in the field handling litigation, resolution, liquidation, and enforcement action on end-to-end basis for individuals and corporates before Tribunals and Courts of competent jurisdiction.
Our expertise includes tendering legal opinions and transaction advisory involving complex matrix of SARFAESI, 2002, Insolvency and Bankruptcy Code, 2016, Companies Act, 2013, including special enactments like Prevention of Money Laundering Act, 2002, and Negotiable Instruments Act, 1881.
Insolvency & Bankruptcy Law:
Regular representation before Tribunals and Court for a diverse range of individual and corporate clients including Public and Private sector Banks, NBFCS, Insolvency Professionals, Resolution Applicants, Home-buyers, Operational Creditors and Corporate Debtors.
Experience in handling transactions relating to numerous arenas and sectors including Aviation, Real Estate, Hospitality, Infrastructure and Development, Import-Export, Steel Manufacturing and Trading, Pharmaceuticals, Power Generation, Mining and Dredging.
Insolvency & Bankruptcy Law
Our team possesses extensive expertise and experience in the practice area of Debt Recovery and insolvency practice. We have successfully represented a wide range of clients in various fields.
Noteworthy cases and timely results demonstrate our credibility, knowledge and client-centric approach in this practice area. We have set landmark precedents while representing clients before Tribunals and Courts in high-stake matters involving renowned entities and groups such as Jet Airways, Sterling Group, Vindhyavasini Group, and Future Group.
Our practice heads and team are certified professionals who have received nationwide recognition for their valuable contribution in the field.
We follow a client-centric approach in handling matters and provide comprehensive and personalized legal solutions to our clients based on end-goal of the client. We believe that every client is unique and every matter is different hence, we prioritize understanding our client’s goals, assessing the circumstances peculiar to the matter, and devising tailored strategies to achieve favourable outcomes. We are committed to delivering results in a timely manner.
The Insolvency and Bankruptcy Code (IBC) is a legislation that was enforced in 2016 to deal with insolvency and bankruptcy of corporates and individuals. The intention of the legislature in the IBC is rehabilitative in nature, where the prime goal is revival of stressed companies/corporates with a view to turn around the same in a time bound manner so as to ensure effective resolution for the benefit of the stakeholders of the entity. The IBC jurisprudence condemns using provisions of the IBC for recovery/settlement.
A Financial creditor or an Operational creditor or a Corporate Debtor itself can initiate proceedings under the IBC.
The Insolvency and Bankruptcy Board of India (IBBI) is the regulator governing and overseeing implementation of the IBC. It monitors and regulates insolvency professionals, insolvency professional agencies, and information utilities registered with it.
An Application for initiation of insolvency resolution process shall be filed with the National Company Law Tribunal (NCLT) having jurisdiction. An appeal against the order of the NCLT shall be preferred with the National Company Law Appellate Tribunal (NCLAT). Further, a person aggrieved by an Order of the NCLAT shall approach the Supreme Court of India.
An Insolvency Professional is a person responsible for overseeing the affairs of the Corporate Debtor during the insolvency resolution process. He/she also handles the liquidation process in the event liquidation orders are passed. An insolvency professional maybe suggested by the party filing the Application or maybe appointed by the Adjudicating Authority from IBBI’s panel of insolvency professionals. Insolvency professionals act in the following capacities under the IBC: Interim Resolution Professional, Resolution Professional and Liquidator.
The insolvency resolution process under the IBC consists of several stages as follows:
· Filing of an Application with NCLT
· Admission of the Application and Moratorium
· Appointment of IRP
· Constitution of Committee of Creditors (CoC)
· Approval of Resolution Plan by the CoC
· Approval of Resolution Plan by the NCLT
· Implementation of Resolution Plan
· Liquidation Process if no resolution plan received
A resolution plan is a proposal submitted by a potential resolution applicant with a view to revive the Corporate Debtor. It shall provide for compromise/repayment of creditors including workmen and statutory dues, restructuring of debt, etc. The proposed Resolution Plan shall be approved by the CoC and thereafter by the NCLT.
If no Resolution Plan is approved or if the proposed Resolution Plan is rejected by the CoC in its commercial wisdom the assets of the Corporate Debtor are liquidated and proceeds thereof are distributed as per the waterfall mechanism prescribed u/s 53 of the IBC.
During the insolvency process, the powers of the board are suspended and are vested in the IRP or the resolution professional. However, major decisions regarding the sale of assets or any restructuring must be approved by the CoC.
The insolvency process under the IBC is a time-bound process. For corporate debtors, the process must generally be completed within 330 days, including any extensions granted by the NCLT
The IBC provides for two types of insolvency proceedings:
a) Corporate Insolvency Resolution Process (CIRP): This applies to corporate entities, including companies, limited liability partnerships, and other entities regulated under specific laws.
b) Individual Insolvency Resolution Process (IIRP): This applies to individuals, including personal guarantors and partnership firms.
Section 53 of the IBC, provides for a specific order of priority for the distribution of proceeds among different classes of creditors during the insolvency process. The priority of claims is as follows:
a) Insolvency Resolution Process costs and liquidation costs.
b) Secured creditors (creditors with collateral or security).
c) Workmen’s dues for the past two years.
d) Unpaid employee salaries and dues for the past one year.
e) Financial debts owed to unsecured creditors.
f) Any remaining debts and dues.
The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) is a legislation that seeks to protect the interest of lenders being classified banks and financial institutions by allowing the entities to enforce their security, take possession of hypothecated/mortgaged assets.
The key features of the RDDBFI Act include the establishment of DRTs and DRATs, provision for filing original applications, powers to issue recovery certificates, and provisions for appeals and enforcement of decrees.
The key features of the SARFAESI Act include the provision for banks and financial institutions to issue notices to borrowers, the right to take possession without court interference, and sell secured assets, establishment of asset reconstruction companies (ARCs), and provisions for appeals and enforcement of security interests.
The Debt Recovery Tribunals (DRTs) and Debt Recovery Appellate Tribunals (DRATs) are responsible for implementing the RDDBFI Act and adjudicating on debt recovery matters.
Yes, once the banks/financial institutes have taken possession, they can proceed to sell the same to recover its dues subject to compliance with the provisions of the SARFAESI Act.
Yes, banks and financial institutions can choose to utilize both Acts concurrently for debt recovery, depending on the nature and circumstances of the debt and the assets involved.