Ironing out creases in insolvency law
Complex issues arising from insolvency proceedings have resulted in a series of judgments by the Supreme Court in recent weeks. In one of them last week, it upheld the order of the National Company Law Appellate Tribunal (NCLAT) in the appeal, K Sasidhar vs Indian Overseas Bank, and stated the tribunal had justly concluded that the resolution plan of the concerned corporate debtor had not been approved by the requisite percentage of voting share of the financial creditors; and in the absence of any alternative resolution plan presented within the statutory period of 270 days, the inevitable sequel was to initiate the liquidation process under Section 33 of the Insolvency and Bankruptcy Code. In another judgment, in the case, Vijay Kumar vs Standard Chartered Bank, the court set aside the NCLAT order and ruled that suspended board of directors of a company undergoing insolvency proceedings and its operational creditors must be given all the documents of the resolution plan so that they might meaningfully participate in meetings held by the committee of creditors. In yet another order, in the case, Brilliant Alloy Ltd vs S Rajagopal, the court permitted the withdrawal of Corporate Insolvency Resolution Process (CIRP) even after the Resolution Professional issued an invitation for expression of interest from resolution applicants to submit resolution plans. In the case, Shashi Prakash vs NEPC Micon, the court emphasised that the jurisdiction of the civil court is completely barred in matters which are now in the dominion of the NCLT.