Just seven months after the operationalization of the Insolvency and Bankruptcy Code (IBC), it has been tested by the apex court.
The Supreme Court on Monday ruled that a settlement can be considered and a case can be withdrawn after insolvency proceedings have started against a company.
It was hearing a case concerning corporate debtor Lokhandwala Kataria Construction Pvt. Ltd on an application filed by financial creditor Nisus Finance and Investment Manager LLP.
The Mumbai bench of the National Company Law Tribunal (NCLT) on 15 June initiated a corporate insolvency resolution process against the debtor.
Later, the company and the creditor approached the National Company Law Appellate Tribunal (NCLAT) saying that the two had settled the dispute and that some of the dues had already been paid.
NCLAT said on 13 July that under the IBC 2016, a case can be withdrawn before the admission of an insolvency case, and not after that.
The parties then filed a plea with the Supreme Court, which allowed a settlement to be considered under article 142 of the Indian constitution.
Article 142 provides that “the Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it”.
Article referred: http://www.livemint.com/Industry/w0sBSJatwbM1wXv2vaIX1I/Supreme-Court-allows-case-settlement-after-insolvency-procee.html
The Supreme Court on Monday ruled that a settlement can be considered and a case can be withdrawn after insolvency proceedings have started against a company.
It was hearing a case concerning corporate debtor Lokhandwala Kataria Construction Pvt. Ltd on an application filed by financial creditor Nisus Finance and Investment Manager LLP.
The Mumbai bench of the National Company Law Tribunal (NCLT) on 15 June initiated a corporate insolvency resolution process against the debtor.
Later, the company and the creditor approached the National Company Law Appellate Tribunal (NCLAT) saying that the two had settled the dispute and that some of the dues had already been paid.
NCLAT said on 13 July that under the IBC 2016, a case can be withdrawn before the admission of an insolvency case, and not after that.
The parties then filed a plea with the Supreme Court, which allowed a settlement to be considered under article 142 of the Indian constitution.
Article 142 provides that “the Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it”.
Article referred: http://www.livemint.com/Industry/w0sBSJatwbM1wXv2vaIX1I/Supreme-Court-allows-case-settlement-after-insolvency-procee.html
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