Resolution Professional

Ans:  Once an application for initiation of insolvency is admitted by the NCLT, the corporate insolvency resolution process is commenced. By way of the order of admission, the NCLT may inter alia direct the following in accordance with Section 13 of the IBC: a. Suspension of management of the corporate debtor;  b. Application of moratorium in terms of Section 14 of the IBC; c. Appointment of the interim resolution professional (IRP); and d. Publication of public announcement by IRP for invitation of claims from the creditors of the Corporate Debtor. The date of such admission order is considered to be the insolvency commencement date, from which the prescribed timeline is calculated. Keywords used:  1. Interalia: Among other things. 2. Moratorium:  अधिस्थगन,  रोक

Ans: As per Section 12 of IBC, the insolvency resolution process will have to be completed within the time period of 180 days counted from the date of admission of the application under the Code. However, the NCLT can extend the time period of the insolvency resolution process by 90 days in addition to the 180 days. This extension of a maximum of 90 days can be granted by NCLT on the filing of an application by the resolution professional. The resolution professional can file an application to NCLT for extension only if a resolution is passed at a meeting of the committee of creditors by a vote of 66% of the voting shares Section 12 was further amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2019. Now, Section 12 of the Code mandates that the CIRP of a Corporate Debtor must conclude within 330 days from the insolvency commencement date. This period of 330 days includes: (a) normal CIRP period of 180 days; (b) one-time extension, if any, up to 90 days of such CIRP period ...

Ans:   Adjudication of the application for initiation of insolvency resolution process:  Adjudication of the application for initiation of insolvency resolution process Once an application for initiation of insolvency process is filed, whether under Section 7,9 or 10 of the Code, the onus falls upon the relevant National Company Law Tribunal (NCLT)  having jurisdiction to examine and adjudicate over the maintainability and merit of the application. The NCLTs are referred to as the Adjudicating Authority under the IBC. It is the duty of the NCLTS to comply with, and ensure compliance with the principles of natural justice, as affirmed by the Hon'ble High Court of Calcutta in Sree Metaliks Limited and Anr. vs. Union of India, whereby the Hon'ble Court stated that the principles governing the NCLTS come from the Companies Act, 2013, under which the NCLTS were constituted. Section 424 of the Companies Act, 2013 mandates compliance with the principles of natural justice, and s...

Ans: Corporate Applicant: The term 'Corporate Applicant' is defined under Section 5(5) of the IBC to include the company itself and any member, partner or individual who is authorised to supervise or control the affairs of the company. When a Corporate Debtor commits a default, a corporate applicant can initiate insolvency in terms of Section 10 of the IBC. In simple words, when a company becomes a corporate debtor and it wants to initiate a corporate insolvency resolution process against itself, such a corporate debtor being the corporate applicant can file a Petition under Section 10 of the IBC. It is to be noted here that company is corporate applicant who renders credit and company is also a corporate debtor and since every member of company is corporate debtor, so any member can file petition under Section 10 of IBC . 

Ans: Operational Creditor:  According to section 5(20) of IBC, operational creditor is a person to whom 'operational debt' is owed, which inter alia includes dues arising out of business transactions.  An 'Operational Creditor is a person who has extended a payment credit in the due course of its business with the Corporate Debtor. Typically, suppliers and service providers are covered under this provision. For example, a supplier may extend a 30-day credit to the business as per the terms of services agreements. In this case, it will be deemed as an Operational Creditor to the Corporate Debtor until its debts are cleared. 

Ans:   Financial Creditor: Financial Creditor is mentioned under section 5(7) of IBC which includes lenders and anyone who has extended a Financial Debt [S.5(8)] to the Corporate Debtor against time value of money. By way of a 2018 amendment, the definition of 'Financial Creditor' also includes real estate allottees (home-buyers) as defined under the Real Estate (Regulation and Development) Act, 2016 within its ambit. Keywords used:  Ambit : सीमा