The document discusses issues with the implementation and interpretation of India's Insolvency and Bankruptcy Code of 2016. It argues that the National Company Law Tribunal and Appellate Tribunal have incorrectly interpreted provisions of the code, placing unnecessary limitations and restrictions. This has caused problems, confusion and required amendments within the first year of the code's implementation. The document criticizes reporting on related legal cases as lacking objectivity and proper context. It warns that continued misinterpretation and distortion of the code risks undermining its effectiveness, as with previous insolvency laws.

1. INSOLVENCY AND BANKRUPTCY CODE 2016
SHRI BISWAJIT DAS, Advocate, Supreme Court of India.
Managing Partner, Juris & Juris, B-4/115, Safdarjung Enclave,
New Delhi- 110029.
www.jurisnjuris.com
Tel: 011-46562550, 26162550; Te-Fax: 01126174550.
When text & context is distorted, the result is mayhem. Insolvency
Bankruptcy Code, 2016 has achieved exactly the same.
We need balanced people to man courts. We equally need reasoned people
to litigate. We need people of clarity to report.
Failing which we will see our resources getting wasted & for which tax
payers will be burdened. No amount of money collected by the
Government will be sufficient to run the Governance if we repose trust,
faith & responsibility on half hearted, incompetent & imbalanced people.
Look at the reportage, the nature of information & the context it seeks to
canvass. In every sense it is wrong.
First, both NCLT & NCLAT were wrong when they are needlessly
interpreting provisions of IBC, 2016 beyond its simple Text and inject
unnecessary & irrelevant limitations which now being sought to be
corrected by Insolvency Law Committee of Govt of India through
injection of explanation to the definition of Financial Debt, which in itself
causes one more limitation contrary the Text of IBC, 2016.
In the process every Authority is riddling the law like a pendulum &
causes serious Deformation & Destructure of the Statute, which in turn
causes enormous misunderstanding in the Society about it. This begets
cascading effect spinning the law out of control prompting Legislature to
replace the said law with a new one not realising the real problem. The
new law no wonder traverses the same old path with assured failure
because it is implemented in that old system involving those illogical &
incompetent actors.
First of all the news is a stale one as it is about Nikhil Mehta Case
against AMR Infrastructure first decided by NCLT on 23.01.2017 & later
decided by NCLAT on 21.07.2017, who completely distorted the
definition of Operational Debt & Financial Debt defined under Section
5(21) & 5(8) respectively with bizarre reasoning. Mind you, all these

2. Judgments were rendered myopically without
just & proper factoration of many material
provisions, object & reasons of IBC, 2016, the
legislative history etc. More importantly these
Judgments didn't do justice to the plain and
simple Text of IBC, 2016. It never warranted
any expansive & adventurism into any
needless interpretation of provisions as there
were no ambiguity whatsoever therein. This
prompted prematurely the Govt to suggest for
changes in law only within one year of its
implementation which has the direct effect on
the operability of the IBC, 2016.
The problem began when NCLT, NCLAT recklessly rendered their view
on Operational Debt & Financial Debt besides applying the IBC, 2016 in a
casual & cavalier manner & created interpretational restriction on the IBC,
2016. This caused problem in classification & procedural application. It
made people for whom this law is made completely subservient to these
kinds of interpretation.
In other words, even if someone owes & defaults money to you, your
triggering of Insolvency law is not in your hand but in the hands of
NCLT/NCLAT, which it controls through interpretation dehors text of
IBC, 2016.
Please note never in the history of any legal jurisprudence, forum ever
usurped your choice of triggering of law. Forum used to decide if you have
a right under law & to what an extent unless you invoked wrong
jurisdiction. These interpretations by NCLT/NCLAT is going far beyond
& deciding if any citizen is eligible to invoke the law or not. This by itself
is unprecedented & unheard.
Unfortunately, even the reporting for general consumption lacks
objectivity, clarity & context.
Long ago cautioned IBC, 2016 is in self-destruction, which will meet the
fate of SICA, 1985, RDDBFI Act, 1993 & SARFAESI Act, 2002. The
result is before all of us where we are seeing repeated amendments &
clarification to the IBC, 2016.
Public discourse is also extremely faulty & distorted. People will suffer
enormously due to this distortion & deformation.