The document discusses the Insolvency and Bankruptcy Code of India. It provides definitions for key terms like insolvency, bankruptcy, and liquidation. It explains that the code establishes a time-bound resolution process for both corporate and individual entities that are unable to pay debts. The code aims to help creditors recover debts more effectively and replace the existing framework that had led to high amounts of pending bankruptcy cases. It overhauls the existing insolvency laws and consolidates them into a single code to provide a uniform and comprehensive law for insolvency and bankruptcy.
The Insolvency and Bankruptcy Code, 2016 (Code) came into operation w.e.f 28th May, 2016.
It seeks to consolidate the existing framework by by creating a single law for Insolvency and Bankruptcy.
Insolvency is when an individual, corporation, or other organization cannot meet its financial obligations for paying debts as they are due.
Insolvency can occur when certain things happen, some of which may include: poor cash management, increase in cash expenses, or decrease in cash flow.
These slides will give overview of the Debt Recovery Tribunal and its Working of the Tribunal. Further it will help in understanding the requirements for filing an application under the Act.
The Insolvency and Bankruptcy Code, 2016 (Code) came into operation w.e.f 28th May, 2016.
It seeks to consolidate the existing framework by by creating a single law for Insolvency and Bankruptcy.
Insolvency is when an individual, corporation, or other organization cannot meet its financial obligations for paying debts as they are due.
Insolvency can occur when certain things happen, some of which may include: poor cash management, increase in cash expenses, or decrease in cash flow.
These slides will give overview of the Debt Recovery Tribunal and its Working of the Tribunal. Further it will help in understanding the requirements for filing an application under the Act.
this ppt is very much useful for the students pursuing First year in B.COM for the Company Law subject. Specially the students of Saurashtra University.
Objectives & Agenda :
To know the need and relevanve of income tax, its applicability and its commencement date. To understand the meaning of the term "income" and "tax" and additionally the relevant terms in relation to income and taxes. The webinar shall predominantly focus on the basic and fundamental provisions of Income Tax Act, 1961, which is required to further appreciate the subsequent charging and computational provisions.
The Insolvency and Bankruptcy Board of India (IBBI) PPTregistrationwala
IBBI or Insolvency and Bankruptcy Board of India are a single regulatory authority that came into existence in order to defragment the old laws. This particular regulatory body has 10 members whose job is to oversee every matter associated with insolvency and bankruptcy in India.
https://goo.gl/6tFAEG
OBJECTIVE
Liquidator is a person appointed by a Company or a Competent authority to manage the activities of winding up of the Company. Provisions pertaining to appointment of liquidator are stipulated under Chapter XX of Companies Act, 2013. The webinar covers the aspects of appointment of liquidator, types of liquidators, powers and duties of liquidator and judicial precedents.
Lecture notes on scope of total income and residental status under income ta...Dr. Sanjay Sawant Dessai
Lecture notes prepared for the students of Income tax , based on Income tax Act of India 1961. topic covered are Residential status and scope of total income of assessee.
this ppt is very much useful for the students pursuing First year in B.COM for the Company Law subject. Specially the students of Saurashtra University.
Objectives & Agenda :
To know the need and relevanve of income tax, its applicability and its commencement date. To understand the meaning of the term "income" and "tax" and additionally the relevant terms in relation to income and taxes. The webinar shall predominantly focus on the basic and fundamental provisions of Income Tax Act, 1961, which is required to further appreciate the subsequent charging and computational provisions.
The Insolvency and Bankruptcy Board of India (IBBI) PPTregistrationwala
IBBI or Insolvency and Bankruptcy Board of India are a single regulatory authority that came into existence in order to defragment the old laws. This particular regulatory body has 10 members whose job is to oversee every matter associated with insolvency and bankruptcy in India.
https://goo.gl/6tFAEG
OBJECTIVE
Liquidator is a person appointed by a Company or a Competent authority to manage the activities of winding up of the Company. Provisions pertaining to appointment of liquidator are stipulated under Chapter XX of Companies Act, 2013. The webinar covers the aspects of appointment of liquidator, types of liquidators, powers and duties of liquidator and judicial precedents.
Lecture notes on scope of total income and residental status under income ta...Dr. Sanjay Sawant Dessai
Lecture notes prepared for the students of Income tax , based on Income tax Act of India 1961. topic covered are Residential status and scope of total income of assessee.
Insolvency & bankruptcy code.- when an enterprise (individual, firm or corpor...MahimaSingh73830
IAn Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders
A Structured Overview of Corporate Insolvency Regime in IndiaEquiCorp Associates
With the recent changes in the legal landscape of India, the Insolvency & Bankruptcy Code, 2016 (“Code”) is the biggest and major legal reforms in the recent times, which has curtailed the earlier extensive process of debt recovery and insolvency. The Code has repealed around eleven laws and provides a comprehensive and time bound mechanism to either put a distressed entity on a firm revival path or timely liquidation of assets.
The Adjudication Authority for companies shall be National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) and Supreme Court shall be the highest order of appeal or having jurisdiction to grant any stay or injunction in respect of matters within the domain of the NCLT and NCLAT.
I prepared this ppt on Insolvency and Bankruptcy Code, 2016 to give a brief overview of it. This Code has repealed various Acts and made the insolvency procedure easier.
Insolvency & bankruptcy code an overviewChirag Gupta
An Overview of Insolvency and Bankruptcy Code, 2016 along with the process for resolution order and bankruptcy order against the debtor and how it will be beneficial for the Banks & Other lending institutions of India.
Partner Julie Murphy-O'Connor, Partner Brendan Colgan and Senior Associate Gearóid Carey of the Corporate Restructuring and Insolvency Group co-author an article for Lexology Navigator - Restructuring and Insolvency in Ireland.
PPT on Insolvency and Bankruptcy Code, 2016 analysis the jargons, processes, access, limitations, opportunities, etc. A bried comparison with US Bankruptcy Code has also been stated and addressing issues like cross border insolvency amongst others issues. Also, the probe of recently notified transfer of pending proceedings has been made in the presentation.
Covers all the issues related to Insolvency Laws and also compares the steps taken by other countries in Insolvency Laws. Views on the impact of COVID-19 on IBC laws are discussed.
In 2020, the Ministry of Home Affairs established a committee led by Prof. (Dr.) Ranbir Singh, former Vice Chancellor of National Law University (NLU), Delhi. This committee was tasked with reviewing the three codes of criminal law. The primary objective of the committee was to propose comprehensive reforms to the country’s criminal laws in a manner that is both principled and effective.
The committee’s focus was on ensuring the safety and security of individuals, communities, and the nation as a whole. Throughout its deliberations, the committee aimed to uphold constitutional values such as justice, dignity, and the intrinsic value of each individual. Their goal was to recommend amendments to the criminal laws that align with these values and priorities.
Subsequently, in February, the committee successfully submitted its recommendations regarding amendments to the criminal law. These recommendations are intended to serve as a foundation for enhancing the current legal framework, promoting safety and security, and upholding the constitutional principles of justice, dignity, and the inherent worth of every individual.
ALL EYES ON RAFAH BUT WHY Explain more.pdf46adnanshahzad
All eyes on Rafah: But why?. The Rafah border crossing, a crucial point between Egypt and the Gaza Strip, often finds itself at the center of global attention. As we explore the significance of Rafah, we’ll uncover why all eyes are on Rafah and the complexities surrounding this pivotal region.
INTRODUCTION
What makes Rafah so significant that it captures global attention? The phrase ‘All eyes are on Rafah’ resonates not just with those in the region but with people worldwide who recognize its strategic, humanitarian, and political importance. In this guide, we will delve into the factors that make Rafah a focal point for international interest, examining its historical context, humanitarian challenges, and political dimensions.
Responsibilities of the office bearers while registering multi-state cooperat...Finlaw Consultancy Pvt Ltd
Introduction-
The process of register multi-state cooperative society in India is governed by the Multi-State Co-operative Societies Act, 2002. This process requires the office bearers to undertake several crucial responsibilities to ensure compliance with legal and regulatory frameworks. The key office bearers typically include the President, Secretary, and Treasurer, along with other elected members of the managing committee. Their responsibilities encompass administrative, legal, and financial duties essential for the successful registration and operation of the society.
DNA Testing in Civil and Criminal Matters.pptxpatrons legal
Get insights into DNA testing and its application in civil and criminal matters. Find out how it contributes to fair and accurate legal proceedings. For more information: https://www.patronslegal.com/criminal-litigation.html
WINDING UP of COMPANY, Modes of DissolutionKHURRAMWALI
Winding up, also known as liquidation, refers to the legal and financial process of dissolving a company. It involves ceasing operations, selling assets, settling debts, and ultimately removing the company from the official business registry.
Here's a breakdown of the key aspects of winding up:
Reasons for Winding Up:
Insolvency: This is the most common reason, where the company cannot pay its debts. Creditors may initiate a compulsory winding up to recover their dues.
Voluntary Closure: The owners may decide to close the company due to reasons like reaching business goals, facing losses, or merging with another company.
Deadlock: If shareholders or directors cannot agree on how to run the company, a court may order a winding up.
Types of Winding Up:
Voluntary Winding Up: This is initiated by the company's shareholders through a resolution passed by a majority vote. There are two main types:
Members' Voluntary Winding Up: The company is solvent (has enough assets to pay off its debts) and shareholders will receive any remaining assets after debts are settled.
Creditors' Voluntary Winding Up: The company is insolvent and creditors will be prioritized in receiving payment from the sale of assets.
Compulsory Winding Up: This is initiated by a court order, typically at the request of creditors, government agencies, or even by the company itself if it's insolvent.
Process of Winding Up:
Appointment of Liquidator: A qualified professional is appointed to oversee the winding-up process. They are responsible for selling assets, paying off debts, and distributing any remaining funds.
Cease Trading: The company stops its regular business operations.
Notification of Creditors: Creditors are informed about the winding up and invited to submit their claims.
Sale of Assets: The company's assets are sold to generate cash to pay off creditors.
Payment of Debts: Creditors are paid according to a set order of priority, with secured creditors receiving payment before unsecured creditors.
Distribution to Shareholders: If there are any remaining funds after all debts are settled, they are distributed to shareholders according to their ownership stake.
Dissolution: Once all claims are settled and distributions made, the company is officially dissolved and removed from the business register.
Impact of Winding Up:
Employees: Employees will likely lose their jobs during the winding-up process.
Creditors: Creditors may not recover their debts in full, especially if the company is insolvent.
Shareholders: Shareholders may not receive any payout if the company's debts exceed its assets.
Winding up is a complex legal and financial process that can have significant consequences for all parties involved. It's important to seek professional legal and financial advice when considering winding up a company.
RIGHTS OF VICTIM EDITED PRESENTATION(SAIF JAVED).pptxOmGod1
Victims of crime have a range of rights designed to ensure their protection, support, and participation in the justice system. These rights include the right to be treated with dignity and respect, the right to be informed about the progress of their case, and the right to be heard during legal proceedings. Victims are entitled to protection from intimidation and harm, access to support services such as counseling and medical care, and the right to restitution from the offender. Additionally, many jurisdictions provide victims with the right to participate in parole hearings and the right to privacy to protect their personal information from public disclosure. These rights aim to acknowledge the impact of crime on victims and to provide them with the necessary resources and involvement in the judicial process.
Military Commissions details LtCol Thomas Jasper as Detailed Defense CounselThomas (Tom) Jasper
Military Commissions Trial Judiciary, Guantanamo Bay, Cuba. Notice of the Chief Defense Counsel's detailing of LtCol Thomas F. Jasper, Jr. USMC, as Detailed Defense Counsel for Abd Al Hadi Al-Iraqi on 6 August 2014 in the case of United States v. Hadi al Iraqi (10026)
Car Accident Injury Do I Have a Case....Knowyourright
Every year, thousands of Minnesotans are injured in car accidents. These injuries can be severe – even life-changing. Under Minnesota law, you can pursue compensation through a personal injury lawsuit.
NATURE, ORIGIN AND DEVELOPMENT OF INTERNATIONAL LAW.pptxanvithaav
These slides helps the student of international law to understand what is the nature of international law? and how international law was originated and developed?.
The slides was well structured along with the highlighted points for better understanding .
3. Understanding the Code
Vaish Associates Privileged & Confidential
Insolvency is the
inability of a person or
corporation to pay their
bills as and when they
become due and payable.
Liquidation is
the process of
winding up a
corporation or
incorporated
entity.
Bankruptcy is
when a person is
declared
incapable of
paying their due
and payable bills.
Differentiation
- Insolvency;
- Bankruptcy; and
- Liquidation
Why is it a Code?
“Code” is usually known as a collection
or compendium of laws. It refers to a
systematic and comprehensive
compilation of laws, rules or regulations
that are consolidated and classified
according to a particular subject matter.
4. KING OF GOOD TIMES – Really ???
Vaish Associates Privileged & Confidential
6. Why is it needed?
Vaish Associates Privileged & Confidential
Indian Banks have become immensely vulnerable
to ineffective & poor recovery mechanism on
corporate loans;
Gross NPAs of the banking industry rise from
2.4% to 4.8% from 2008 to 2015;
Restructured advances have increased from 1.2 %
in 2008 to 6.8 % in 2015;
Nearly 60,000 bankruptcy cases pending in courts;
World Bank Report – “4 years to wind up an ailing
company in India, almost twice as long as it does
in China, 1.5 years in other member countries of
OECD”; and
Recovery of debts – too low vis-à-vis other
countries.
7. • System of Official Liquidator has not been successful
• Banks can turn to separate DRT, partly staffed by Bank officials and overseen by the Ministry of Finance
• Both are overstretched with piles of files lying under pendency.
• Multiple adjudication fora arbitrage
• Reform process has so far taken the approach of "interim fixes designed to solve the problem at hand.”
• Benefit of Separate Legal Entity
Loopholes in existing laws
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9. Post IBC - Inter-play between SICA, RDDBI, SARFAESI and IBC
After IBC gets notified, SICA Repeal Act 2003 will come into force which will lead to dissolution
of BIFR and the new cases will be handled by NCLT.
All pending matters before BIFR shall abate as the sickness/ insolvency criterion in IBC is very
different from what is in SICA
SARFAESI & RDDBI will hold the same force.
But now secured creditors can approach under both SARFAESI and IBC as they found suitable.
Now adjudicating authority for the individuals will be DRT while the NCLT will be governing
issues for corporate person.
By virtue of IBC the voluntary winding up procedure has been shifted from Companies Act to
IBC.
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10. Same Product, New Packaging
Vaish Associates Privileged & Confidential
11. Key Features
Vaish Associates Privileged & Confidential
Applicable to both corporate and non-corporate persons (except financial service provider);
Allow creditors, whether secured; unsecured; financial or operational; domestic or international to initiate a
resolution processes thereby aiming for an early detection of the fraud;
Establishes time-bound moratorium on acceleration and enforcement of debts against the company;
The resolution professionals will replace the existing management during insolvency proceedings;
Provides for time-bound viability assessment mechanisms, liquidation processes and distribution waterfalls;
Provides for penalties on promoters for asset diversion leading up to liquidation;
The provisions of the Code overrides SARFAESI Act, 2002;
Inability to pay debt will no more be a ground for winding up under the Companies Act; “default” means non-
payment of debt or instalment;
Voluntary Liquidation shall be subject to provisions of the Code; and
Chapter governing Revival and Rehabilitation of Sick Companies of Companies Act 2013, stands omitted.
12. "financial service" includes any of the following services, namely:—
(a) accepting of deposits;
(b) safeguarding and administering assets consisting of financial products, belonging to
another person, or agreeing to do so;
(c) effecting contracts of insurance;
(d) offering, managing or agreeing to manage assets consisting of financial products belonging
to another person;
(e) rendering or agreeing, for consideration, to render advice on or soliciting for the purposes
of—
(i) buying, selling, or subscribing to, a financial product;
(ii) availing a financial service; or
(iii) exercising any right associated with a financial product or financial service;
(f) establishing or operating an investment scheme;
(g) maintaining or transferring records of ownership of a financial product;
(h) underwriting the issuance or subscription of a financial product; or
(i) selling, providing, or issuing stored value or payment instruments or providing payment
services;
Financial Services
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Definition- IBC, 2016
13. ‘Debtor-in-possession’ to ‘Creditor-in-possession’
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The Courts are being conscious vis-a-vis piercing the corporate veil for default;
The Code aims at bringing the defaulters to book by empowering creditors to initiate
the process at an early stage for replacing the management;
The Code provides for takeover of management by insolvency professionals
nominated by the creditors. Professionals to have the flexibility to bring in turnaround
specialists and consultants to achieve the desired business results;
The Code provides for liquidation of a company at the earliest opportunity to
minimise the losses for debtors as well as shareholders.
14. Vaish Associates Privileged & Confidential
Applicability, Scope & Structure
Applicability STRUCTURE
In entirety, the Code has 255 sections which are divided into
5 Parts as given below
Part I
Preliminary
(Definitions)
Part II
Insolvency
Resolution and
Liquidation for
Corporate Persons
Part III
Insolvency Resolution
and Bankruptcy for
individuals and
Partnership Firms
Part IV
Regulation of
Insolvency
Professionals,
Agencies and
Information Utilities
Part V
Miscellaneous
(enables amendments
in other statues such
as Companies Act
2013)
Schedules
(11 Schedules)
Provides for
amendments to be
carried out in other
statues
All kinds of:
- Corporate Enterprises;
- Limited Liability Partnerships;
- Partnership Firms; and
- Individuals.
Scope
- Insolvency;
- Liquidation;
- Voluntary Liquidation (solvent
insolvency); and
- Bankruptcy
15. Framework of the Code
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Regulator Adjudicator
Insolvency and Bankruptcy Board of India (IBBI)
National Company Law
Tribunal
Debt Recovery
Tribunal
Corporate Entities Non-Corporate Entities
Companies/
LLPs
Individuals and
Partnership Firms
Insolvency Professional Agencies;
Insolvency Professionals; and
Information Utilities
16. Corporate Insolvency Resolution Process: Initiation and Commencement
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Who is entitled to initiate Corporate Insolvency Resolution Process?
When can a Corporate Insolvency Resolution Process initiated?
How the process will be initiated?
Who is not entitled to initiate CIRP?
What is the timeline specified in the Code vis-à-vis completion of CIRP?
17. Broad CIRP-Process
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Moratorium, Collation of claims and constitution of committee of creditors by Interim Resolution Professional
Appointment of Resolution Professional in the creditors meeting held within 7 days of constitution of
committee of creditors (only financial creditors ; no related party voting)
Resolution Professional to prepare Information Memorandum
Resolution Applicant to prepare (on the basis of Information Memorandum) and submit resolution plan to
Resolution Professional for examination & further submission for approval of committee of creditors
Resolution plan
approved by
committee
Resolution plan
rejected by
committee
NCLT
approves plan
NCLT
rejects plan
Liquidation process
starts
Admission of application and appointment of Interim Resolution Professional within 14 days (tenure 30 days)
18. Moratorium
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When can NCLT declare Moratorium?
What does Moratorium includes:
- institution/continuation of suit or proceedings against the corporate debtor;
- transferring or disposing off any asset by the corporate debtor;
- any action to foreclose/recover any security interest created by corporate debtor vis-à-vis
property including any action under SARFAESI, 2002; and
- recovery of any property by an owner where property is occupied/ is in possession of
corporate debtor.
Moratorium shall cease to be in effect:
- on completion of CIRP; or
- when resolution plan is approved by NCLT during the CIRP period; or
- where liquidation order is passed
19. Broad Liquidation Process
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Appointment of Liquidator
Formation of Liquidation Estate
Consolidation of claims
Verification of claims
Admission or Rejection of claims
Determination of value of claims
Appeal by the Creditor to the NCLT, within 14 days of rejection of claims
Liquidator to scrutinise transactions
Distribution of assets and dissolution of Corporate Debtor
20. Waterfall Mechanism
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Insolvency resolution and liquidation cost
Secured creditor (in case he has
relinquished security)
Wages and unpaid dues to employees (other than workmen) for a period of 12 months
preceding liquidation commencement date
Unsecured creditors
Central and State government dues
Any remaining debts or dues
Preference shareholders, if any
Equity shareholders or partners, as the case may be
Workmen’s dues ( for period of 24 months
preceding liquidation commencement date)
+
In case of liquidation,
the asset of the
corporate debtor will be
sold and the proceeds
will be distributed
amongst the creditors
in the following order
of priority:- + Secured creditor for an unrealised amount for
enforcing security interest
21. Cross-border Insolvency
Vaish Associates Privileged & Confidential
The Code provides enabling provisions to address cross border insolvency issues, given the multi-
jurisdictional spread of assets of large corporate houses;
- the Central Government may enter into agreements with any other country for enforcing the
provisions of the Code and notify applicability of the same from time to time (BILATERAL
AGREEMENTS - Section 234);
- ability of the Adjudicating Authority to issue ‘letter of requests’ to the courts/authorities of other
countries for seeking information or requesting an action in relation to assets of debtor situated
outside India (RECIPROCAL ARRANGEMENTS Section 235).
The term ‘Property’ under section 3 (27) of the Code includes property of every description
situated in India or outside India.
22. Vaish Associates Privileged & Confidential
Conclusion
Defaulter’s will not be able to take ride over the multifora system governing laws;
Code has attempted to recognise the balance between excessive court intervention and
excessive power in the hands of creditors;
The Code focuses on time-bound remedy vis-à-vis recovery mechanism;
Recognising cross border insolvency will help developing international debt market in
India; and
Litmus test: How is it implemented?
23. THANK YOU
Disclaimer: Please note that this presentation is based on the limited information available with us.
While every care has been taken to ensure accuracy of this presentation, Vaish Associates Advocates
shall not assume any liability / responsibility for any errors that might creep in. The material herein
does not constitute / substitute professional advice that may be required before acting on any matter.
Without our prior written consent, this presentation shall not be quoted in whole or in part or
otherwise referred to in any document or delivered to any other person or entity.
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