Inslvency and Bankruptcy Code 2016

INSOLVENCY AND BANKRUPTCY CODE 2016
SUMMER INTERNSHIP REPORT

INDIAN OIL CORPORATION LIMITED
(1ST JUNE 2019 – 30TH JUNE 2019)
SUBMITTED TO:
MR.S.P.KHARE
CM (LAW), MARKETING HEAD OFFICE, MUMBAI
INDIAN OIL CORPORATION LIMITED
SUBMITTED BY:
ANANYA SHIVANI
2nd (Yr.) 4th Semester
FACULTY OF LAW,
UNIVERSITY OF ALLAHABAD
ACKNOWLEDGEMENT
“IF YOU WANT TO WALK FAST GO ALONE

IF YOU WANT TO WALK FAR GO TOGETHER”
A project is a joint endeavour which is to be accomplished with utmost compassion,

diligence and with support of all. Gratitude is a noble response of one’s soul to kindness or
help generously rendered by another and its acknowledgement is the duty and joyance. I am
overwhelmed in all humbleness and gratefulness to acknowledge from the bottom of my
heart to all those who have helped me to put these ideas, well above the level of simplicity
and into something concrete effectively and moreover on time.
This project report would not have been completed without combined effort of Mr.
S.P.Khare and other supporting staffs whose support and guidance was the driving force to
successfully complete this project. I express my heartfelt gratitude to him. Thanks are also
due to my parents, family, siblings, my dear friends and all those who helped me in this
report in any way. Last but not the least; I would like to express my sincere gratitude to
respected sir for providing me with such a golden opportunity to learn under his guidance.
Also this project was instrumental in understanding the concepts of Insolvency and
Bankruptcy. It was truly an endeavour which enabled me to embark on a journey which
redefined my intelligentsia, induced my mind to discover the intricacies involved in the
statutes and provisions.
Moreover, thanks to all those who helped me in any way be it words or presence,
Encouragement or blessings...
Ananya Shivani
BA .LL.B(hons.)
4th Semester
INSOLVENCY AND BANKARUPTCY CODE2016 Page 2

DECLARATION BY THE CANDIDATE
I hereby declare that the work reported in the B.A. LL.B (Hons.) Project Report entitled
“INSOLVENCY AND BANKRUPTCY CODE 2016 ” submitted to Mr. S.P.Khare is an
authentic record of my work carried out under his direction and guidance. I have not
submitted this work elsewhere for any other degree or diploma. I am fully responsible for the
contents of my Project Report.
(Signature of the Candidate)

ANANYA SHIVANI
FACULTY OF LAW
UNIVERSITY OF ALLAHABAD

TABLE OF CONTENTS
Acknowledgment……………………………………………………………………………...
Declaration……….…………………………………………………………………………..
Table of Contents…………………………………………………………....……………...
Aims and Objectives………………………………………………………………………….
Hypothesis..................................................................................................................................
Research Methodology......................................................................................................…...
Abbreviations………………………………………………………………………………...
Abstract……………………………………………………………………………………..
Indian Oil Corporation Limited ( An overview)………………………………………….
CHAPTER: 01
1. Introduction………………………………………………………………….
2. History of the code……………………………………………………..........
3. Applicability of the code………………………………….............................
4. Institutional framework…………………………………………………….
5. Information Utilities……………………………………………………….
6. Framework of the code…………………………………………………….
CHAPTER: 02
1. Initiation process by Financial Creditor………......................................
2. Initiation process by Operational Creditor……………………………..
3. Initiation process by the Corporate Application………………………..

4. Scope of dispute under the bankruptcy code ………………………….
5. Insolvency Resolution process…………………………………………
6. Committee of Creditors………………………………………………...
CHAPTER : 03
1. Fast track Insolvency Resolution……………………………………
2. Liquidation…………………………………………………………..
3. Voluntary winding up……………………………………………….
4. Liability of the Individual…………………………………………...
CHAPTER : 04
1. Analysis of the amendments in the code……………………………..
2. Analysis of the Code in recent years…………………………………
3. Comparison of the insolvency and bankruptcy law of India & U.K.
CHAPTER : 05
ANALYSIS OF THE JUDGEMENTS
KINGFISHER AIRLINES CASE…………………………………
A. SYNOPSIS OF THE CASE

B. LEGAL ISSUES INVOLVED
C. JUDGEMENT
D. CURRENT SCANERIO
ESSAR STEEL CASE………………………………………………
A SYNOPSIS OF THE CASE

B LEGAL ISSUES INVOLVED
C. JUDGEMENT
D. CURRENT SCANERIO
SYNERGIS DOORAY AUTOMOBILE LIMITED CASE …………

C. JUDGEMENT
D. CURRENT SCANERIO
NAGARJUNA OIL CASE……………………………………………..

C. JUDGEMENT
D. CURRENT SCANERIO
IL& FS CASE…………………………………………………………..

C. JUDGEMENT
D. CURRENT SCANERIO
ARCELOR MITTAL INDIA PVT. LTD. &ORS.V. SATISH KUMAR GUPTA
AND OTHERS…………………………………………………………….

C. JUDGEMENT
D. CURRENT SCANERIO
MOBILOX INNOVATINS PVT. LTD. V. KIRUSWA SOFTWARE PVT.LTD.

C. JUDGEMENT
D. CURRENT SCANERIO
J.K. JUTE MILLS CO. LTD. V. SURENDRA TRADING CO…………...


C. JUDGEMENT
D. CURRENT SCANERIO
CHAPTER : 06
1. Precautionary measures……………………………………………………
2. Challenges faced by the Insolvency and bankruptcy code………………..
Conclusion……………………………………………………………………………………
Bibliography………………………………………………………………………..................
AIMS AND OBJECTIVES

The Aims and Objectives of this project are:
1. To analyze the concept of Insolvency and Bankruptcy .
2. To analyze the concept with the help of various case laws.
3. To study the significance of the concerned statute and also its perspective.
HYPOTHESIS
The researcher considers the following hypothesis:

1. The analysis of the code with the critical analysis of the amendments made in the code
and the judgments of the hon’ble court.
RESEARCH METHODOLOGY
For this study, doctrinal research method was utilized. Various articles, e-articles, reports,
news reports and journals were used extensively in framing all the data and figures in
appropriate form, essential for this study.
The method used in writing this research is primarily analytical.

ABBREVIATIONS
IBC Insolvency and bankruptcy code

SC Supreme court
NCLT National company law tribunal
IP Insolvency professional
CoC Company of Creditors
BLRC Bankruptcy law reform
committee
SARFESI Securitisationand Reconstruction
of Financial Assets and
Enforcement of Security
Interest Act,
IBBI Insolvency and bankruptcy board
of India
SICA Sick industries and companies
act
IR Insolvency Resolution

ABSTRACT
The Insolvency and Bankruptcy Code, 2016 (hereinafter referred to the “IBC”,
which was made effective in December 2016, within a short span of 9-10 month
it gathered a lot of momentum. The excitement and anxiety amongst the
stakeholders including banks, corporate, lawyers, IPs and IRPs is quite
noticeable. As of August 2017, more than 200 insolvency proceedings are going
in different benches of the NCLT, By 2018 more than one thousand cases were
registered in different benches of NCLT.
The IBC has altered the way, insolvency and bankruptcy law is practiced in
India and has become an effective way to take actions, especially against the
willful defaulters.
In this project, the focus will be to understand and discuss the concept of the
code, the amendments in the code the merits and flaws of the code through
various case laws and study the critical challenges faced by Insolvency
Professionals (IPs) or Interim Resolution Professionals (IRPs) and other
stakeholders during insolvency resolution process.
INSOLVENCY AND BANKARUPTCY CODE2016Page 10

AN OVERVIEW TO THE INDIAN OIL CORPORATIN
LIMITED
Indian Oil Corporation Limited, together with its subsidiaries, engages in
refining, pipeline transportation, and marketing of petroleum products in India.
It is also involved in the exploration and production of crude oil and gas; and
marketing of natural gas and petrochemicals. The company’s products include
petrol/gasoline, diesel/gas oil, lubricants and greases, auto gas, cooking gas,
kerosene, LPG, bulk/industrial fuels, aviation fuel, marine oils, and bitumen. In
addition, it offers special products, such as carbon black feedstock, raw
petroleum coke, Sulphur, paraffin wax, raw petroleum coke, jute batching oil,
micro crystalline wax, mineral turpentine oil, toluene, propylene, and petcoke.
The company operates through a network of approximately 9 refineries; 13,391

kilometers of crude oil, product, and gas pipelines; approximately 27,089 fuel
stations, including 7529 Kisan Seva Kendra outlets in the rural markets; 125
terminals and depots; 91 LPG bottling plants; 107 aviation fuel stations; 6,650
consumer pumps for large-volume consumers; and approximately 10213 LPG
distributors.
Indian Oil Corporation Limited’s exploration and production portfolio

comprises 10 oil and gas blocks in India; and 8 blocks in the United States,
Canada, Venezuela, Libya, Gabon, Nigeria, and Russia.
Further, it engages in the explosives and cryogenic, wind mill and solar power
generation, lube blending, and lubricants and base oil marketing activities. The
company also exports its products. It has strategic alliance with ENOC Group.
The company serves consumer, industrial, and marine customers, as well as

domestic and international flag carriers, private airlines, defense services,
railways, and state transport undertakings. The company was founded in 1959
and is based in New Delhi, India.
Indian Oil group of companies owns and operates 10 out of India’s 22 refineries
with a combined refining capacity of 65.7 million metric tonnes per annum ,
Indian Oil Corporation owns and operates the largest network of crude oil and
petroleum product pipelines in India. The total network of pipelines is 11,214
km with a capacity of 77.258 million metric tonnes per annum . The company’s
pipelines are well positioned to supply petroleum products from its refineries
and India’s ports to high demand states in northwestern India.

Indian Oil has finalised a master plan to enter into the petrochemical product
line by integrating its core refining business with petrochemical activities,
predominantly utilising the streams available in various refineries.
With gas emerging as preferred fuel for the utilities sectors viz., power,
fertilizers and transportations, its share in the total energy basket is expected to
reach 20% by the year 2025. The company has taken several initiatives to
harness these growth potentials.
Date of incorporation 30th June, 1959 as Indian Oil Company Ltd. Upon merger
with Indian Refineries Ltd. on 1.9.1964, name of the
company was changed to Indian Oil Corporation Ltd.
Type of company Government Company under Section 617 of the Companies

Act, 1956.
Details of Disinvestment In the year 1999, the Govt. of India further disinvested 10%
of its holding in the Company in favour of ONGC Ltd. which
is a Govt. Company.
Listing with stock Bombay Stock Exchange (BSE)
exchange The National Stock Exchange(NSE)
Administrative Ministry Ministry of Petroleum and Natural Gas

THE INSOLVENCY
AND
BANKRUPTCY
CODE 2016
SPECIAL REFERENCE
 THE CODE : OVERVIEW

 DEVLOPMENT OF THE CODE
 PROCESS INVOLED
 AMENDMENTS IN THE CODE
 ANALYSIS OF THE CODE THRUGH
VARIOUS CASE LAWS

CHAPTER :01
INTRODUCTION T0 THE
INSOLVENCY AND
BANKRUPTCY CODE, 2016

INTRODUCTION
The insolvency resolution process in India has in the past involved the
simultaneous operation of several statutory instruments. These include:
 The Sick Industrial Companies Act 1985,

 The Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002,
 The Recovery of Debt Due to Banks and Financial Institutions Act,
1993,
 The Companies Act, 2013
Broadly, these statutes provided for a disparate process of debt restructuring,

and asset seizure and realization in order to facilitate the satisfaction of
outstanding debts. As is evident, a plethora of legislation dealing with
insolvency and liquidation led to immense confusion in the legal system, and
there was a grave necessity to overhaul the insolvency regime. All of these
multiple legal avenues, and a hamstrung court system led to India witnessing a
huge piling up of non-performing assets, and creditors waiting for years at end
to recover their money. The Bankruptcy Code is an effort at a comprehensive
reform of the fragmented regime of corporate insolvency framework, in order to
allow credit to flow more freely in India and instilling faith in investors for
speedy disposal of their claims. The Code consolidates existing laws relating to
insolvency of corporate entities and individuals into a single legislation. The
Code has unified the law relating to enforcement of statutory rights of creditors
and streamlined the manner in which a debtor company can be revived to
sustain its debt without extinguishing the rights of creditors.
The Code provides creditors with a mechanism to initiate an insolvency

resolution process in the event a debtor is unable to pay its debts. The Code
makes a distinction between :
 Operational Creditors
 Financial Creditors.
A Financial Creditor is one whose relationship with the debtor is a pure

financial contract, where an amount has been provided to the debtor against the
consideration of time value of money (“Financial Creditor”). Recent reforms
have sought to address the concerns of homebuyers by treating them as

‘financial creditors’ for the purposes of the Code. By a recently promulgated
ordinance, the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018
(“the Ordinance”), the amount raised from allottes under a real estate project (a
buyer of an under-construction residential or commercial property) is to be
treated as a ‘financial debt’ as such amount has the commercial effect of a
borrowing.3 The Ordinance does not clarify whether allottes are secured or
unsecured financial creditors. Such classification will be subject to the
agreement entered into between the homebuyers and the corporate debtor. In the
absence of allottes having a clear status, there may be uncertainty about their
priority when receiving dues from the insolvency proceedings.
An Operational Creditor is a creditor who has provided goods or services to the

debtor, including employees, central or state governments (“Operational
Creditor”). Operational Creditors provide services or credit to the market and
since they provide loan on credit to the market be and since they provide loan
on credit and expect certain future payments, it is to be noted that such
creditors accepts no collaterals from the debtor thus are considered unsecured
creditors.
Debtor company may also, by itself, take recourse to the Code if it wants to
avail of the mechanism of revival or liquidation. In the event of inability to pay
creditors, a company may choose to go for voluntary insolvency resolution
process – a measure by which the company can itself approach the NCLT for
the purpose of revival or liquidation.
B (Bank)
A
(Manufacturer) C (Supplier of raw materials.)
Here,
A is the debtor, B the bank has provided loan on certain considerations or

collaterals, C the supplier has not taken any collaterals from the debtor in lieu of
the supplies thus it is considered as unsecured creditor while the bank which has
accepted the security or collaterals is considered as secured creditors.

Both the creditors are expecting payments, the incapability of borrower to
repay the creditors is refereed as the concept of Insolvency. And to resolve this
we follow a legal framework which is called Bankruptcy.

HISTORY OF THE CODE
Prior to the IBC being passed, India did not have a single law dealing with all
aspects of a company in financial distress. Instead, there were multiple laws,
each of which applied to a particular legal process, type of company or group of
creditors.
For example,
 The Sick Industrial Companies Act, 1985 ("SICA") dealt with the rescue
and rehabilitation of industrial companies only,
 The Companies Act, 1956 provided a process for the liquidation and
winding up of all types of corporate entities.
 There were also debt recovery laws such as the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 ("SARFAESI") and the Recovery of Debt Due to Banks and
Financial Institutions Act, 1993 ("RDDBFI Act") that provided avenues
for security enforcement and debt recovery, respectively, by banks and
financial institutions.
The result of this fragmented legal framework was delays, confusion and
conflicts between these multiples laws and legal fraternity. Further, many of
these laws, such as SICA, had proved to be wholly ineffective in achieving a
speedy restructuring that took into account the interests of both debtors and
creditors. The World Bank's Ease of Doing Business Index 2015 ranked India
137 out of 189 countries on the ease of resolving insolvencies based on various
indicators such as time, costs, recovery rate for creditors, the management of a
debtor's assets during the insolvency proceedings, creditor participation and the
strength of the insolvency law framework.2
Efforts at insolvency law reform began in late 2014 when the Ministry of
Finance constituted The Bankruptcy Law Reform Committee ("BLRC") under
the chairmanship of Mr T.K. Viswanathan. The Finance Minister reiterated the
Government's commitment to insolvency reform in his 2015-16 budget speech
when he identified having a new insolvency law as one of the key priorities for
the year. The BLRC submitted its report, including a draft of the Insolvency and
Bankruptcy Bill, 2015 (the "Bill") on November 4, 2015,3 which was introduced
in the Lok Sabha in December 2015 with a few amendments. The Bill was
subsequently referred to a Joint Parliamentary Committee, which submitted a
detailed report, including a revised draft of the Bill. 4 The IBC that was

eventually passed was the version proposed by the Joint Parliamentary
Committee

APPLICABILITY OF THE LAW
The I&B Code is applicable to the corporate person only when the amount of
default is not less than one lakhs rupees.
When a corporate debtor fails to pay his debts, then the financial creditor or an
operational creditor of a corporate debtor can make an application in prescribed
format to the Adjudication authority i.e. National company law tribunal for
initiate the corporate insolvency resolution process against the corporate debtor.
The Adjudication Authority after ascertaining the existence of default from the
records available with information utility or other evidence furnished by the
applicant, if satisfied that default has occurred and the application is complete in
all manner then accept the application and communicate his decision to the
applicant. When the adjudicating authority passes the order of admission of
such application that date called the insolvency commencement date.
The Adjudicating Authority after the admission of the application declare the

moratorium period, make a public announcement for submission of claims, and
appoint an interim resolution professional.
The public announcement shall be made immediately not later than 3 days from
the date appointment of interim resolution professional.

The interim resolution professional after collation of all claims and
determination of the financial position of the corporate debtor constitute a
committee of creditors.
The committee of creditors shall comprise all financial creditors of the

corporate debtor. The first meeting of the creditors shall be held within seven
days of the constitution of the committee of creditors.
The resolution professional shall submit the resolution plan as approved by the
committee of creditors to the Adjudicating authority.
If the Adjudicating Authority is satisfied that the resolution plan as approved by

the committee of creditors meets the requirements it shall by order approve the
resolution plan which shall be binding on the corporate debtor and its

employees, members, creditors, guarantors and other stakeholders involved in
the resolution plan.
After the order of approval, the moratorium order passed by the adjudicating
authority shall cease to have an effect and the resolution professional shall
forward all records relating to the conduct of the corporate insolvency
resolution process and the resolution plan to the Board to be recorded on its
database.

Where the Adjudicating Authority before the expiry of the insolvency resolution
process period or the maximum period permitted for completion of the
corporate insolvency resolution process does not receive a resolution plan or
rejects the resolution plan for the non-compliance of the requirements, it shall
pass the order of liquidation and issue a public announcement.

When a liquidation order has been passed no suit or another legal
proceeding shall be instituted by or against the corporate debtor, but legal
proceeding may be instituted by the liquidator on behalf of the corporate debtor,
with the prior approval of the adjudicating authority.
The liquidator shall receive and collect the claims of creditors within a period of
thirty days from the date of commencement of the liquidation process.
A creditor may withdraw or vary his claim within fourteen days of its
submission.
The liquidator shall verify the claims within thirty days from the last date of
receipt of the claim.
The liquidator communicates his decision of admission or rejection of claims to

the creditor and corporate debtor within seven days of such admission or
rejection of claims.
When the assets of the corporate debtor have been completely liquidated, the
liquidator shall make an application to the Adjudicating Authority for the
dissolution of such corporate debtor.

The Adjudicating authority shall pass the order of dissolution on receipt of an
application by the liquidator. The corporate debtor shall be dissolved from the
date of that order.


A copy of an order shall within seven days from the date of such order, be
forwarded to the authority with which the corporate debtor is registered.

INSTITUTIONAL FRAMEWORK
The Code proposes the creation of several new institutions, all of which have
specialized roles in the insolvency resolution process. The Code has created a
regulatory and supervisory body, The Insolvency and Bankruptcy Board of
India (“IBBI”), which has the overall responsibility to educate, effectively
implement and operationalize the Bankruptcy Code.
The IBBI has the added responsibility to facilitate the functionality of the Code
by studying practical implications and framing rules/regulations to overcome
any difficulty or hurdle.
The Code envisages the creation of a cadre of professional insolvency

practitioners, known as Resolution Professionals (“RP”), who are tasked with
overseeing various aspects of the resolution of insolvency.
The Code also sets up Insolvency Professional Agencies, which are

professional bodies that will regulate the practice of insolvency professionals.
Individual practitioners are required to be enrolled with insolvency professional
agencies which are empowered to certify professionals, conduct examinations,
and lay out a code of conduct.

INFORMATION UTILITIES
The Code envisages the establishment of information utilities, which are tasked
with the collection, collation, maintenance, provision and supply of financial
data to businesses, financial institutions, adjudicating authorities, insolvency
professionals and other relevant stakeholders, which will thereby serve as a
comprehensive repository of information on corporate debtors that are of a
financial nature.
It is optional for operational creditors to provide financial information to the

information utility. This information, including records of liabilities, defaults,
and overall debt, is to be sourced from creditors by the utility service – in what
is a positive step forward towards transparency, all security interests created on
assets are to be reported to the utilities by financial creditors.
The records with the utilities has evidentiary value in the initiation of
insolvency resolution procedure, and can assist various stakeholders in arriving
at an ideal resolution at distressed companies.
However, the Code is silent on the networking and interlinking of multiple

information utilities. National e-Governance Services Ltd. (NeSL), a
government entity, has become the first information utility after receiving the
required approvals from the IBBI.

FRAMEWORK OF THE CODE
All proceedings under the Code in respect of corporate insolvency are to be
adjudicated by the NCLT, which has been designed as the special one window
forum which can tackle all aspects of insolvency resolution.
The NCLT is referred to as the Adjudicatory Authority in relation to insolvency

of corporate persons under the Code. No other court or tribunal can grant a stay
against an action initiated before the NCLT. Appeals from the orders of the
NCLT lie before the National Company Law Appellate Tribunal (“NCLAT”).
All appeals from orders of the NCLAT lie to the Supreme Court of India.
The jurisdiction of civil courts is explicitly ousted by the Code with regard to
matters addressed by the Code. Additionally, it is now established that the
Limitation Act, 1963 shall be applicable to proceedings under the Code. Thus
time-barred claims are outside the purview of insolvency.
When resolution of debts is not viable, the NCLT may direct for dissolution of
the company. The Code envisages a two stage process
 Revival
 liquidation:
1. Corporate Insolvency Resolution Process (“Insolvency Resolution
Process”)
2. Fast Track Corporate Insolvency Resolution Process (“Fast Track
Resolution Process.
3. Liquidation Insolvency Resolution Process and Fast Track Resolution
process.
These are measures to help revive a company. The Code attempts to first
examine possibilities of a revival of a corporate debtor failing which, the entity
will be liquidated.

CHAPTER :02
INSOLVENCY RESOLUTION
PROCESS

INITIATION PROCESS OF THE LAW
A Financial Creditor may by itself or jointly with other financial creditors or
any other person on behalf of the financial creditor, as may be notified by the
Central Government, seek to initiate Insolvency Resolution Process by filing an
application before the NCLT, once a default has occurred.
Interestingly, under the Code, the adjudication process in respect of a Financial

Creditor does not require a notice to be served on the debtor. However, the
Supreme Court has in its judgement of Innoventive Industries v IDBI Bank
made it mandatory for a notice to be served on the debtor, as well as to provide
the debtor with the right to be heard.
The Code provides that within fourteen days of an application having been
filed, NCLT shall ascertain the existence of the debt and default and either
admit or reject the application, after which consequences under the Code would
follow. Where the application itself is incomplete or suffers from other defects,
the application may be rejected.
The Bankruptcy Code does not mention the degree of proof required for the
NCLT to ‘ascertain’ default in respect of a debt owed by a debtor. Neither does
the Bankruptcy Code provide an indication of the nature of satisfaction that is
required by the NCLT with respect to existence of a default there has been a
default and not deliberate into its extent or composition.
It can be noted that the NCLT would generally admit an application if it is

compliant with the provisions of the Bankruptcy Code, despite having the
discretion to entertain other considerations.

INITIATION PROCESS OF THE OPERATIONAL
CREDITOR.
The Bankruptcy Code envisages a two-step process for the initiation of
insolvency proceedings by an Operational Creditor. An Operational Creditor
would upon the occurrence of a default have to demand payment of the unpaid
debt (“Demand”).The Corporate Debtor may within 10 days of receipt of the
Demand either Dispute the debt (as described below) or pay the unpaid debt.
In the event the corporate debtor does not reply or repay the debt, an application
could be filed by the Operational Creditor before the NCLT to initiate
Insolvency Resolution Process. However, the existence of a dispute can act as a
barrier to such application. The term “dispute” includes a suit or arbitration
proceedings relating to: (a) the existence of the amount of debt;
(b) the quality of goods or service; or
(c) the breach of a representation or warranty.
The Supreme Court in the case of K. Kishan v. Vijay Nirman Company Pvt.
Ltd., clarified that operational creditors cannot use IBC either prematurely or for
extraneous considerations or as a substitute for debt enforcement procedures. It
held that filing a Section 34 petition under Arbitration and Conciliation Act,
1996 (“Arbitration Act”) against an arbitral award shows a pre-existing dispute
that concludes its first stage in the form of an award, and continues thereafter,
till final adjudicatory process under Sections 34 and 37 of the Arbitration Act
has taken place.
Therefore, IBC proceedings cannot be initiated till all available statutory appeal
mechanisms have been exhausted by the parties.

INITIATION PROCESS BY THE CORPORATE
APPLICANT
In case of default by the corporate debtor, the corporate applicant may file an
application for initiation of insolvency proceedings. The applicant must furnish
information relating to the books of account and the RP to be appointed.
Additionally, a special resolution must be passed by the shareholders of the

corporate debtor or a resolution by at least three-fourth of the total number of
partners must be passed approving the filing of the insolvency resolution
application.
SCOPE OF DISPUTE UNDER THE

BANKRUPTCY CODE
After many conflicting decisions, the Supreme Court in Mobilox v Kirusa
finally settled the issue regarding the interpretation of the term ‘dispute in
existence’ under the Code. This provided much-needed relief and clarity to
corporate debtors who may have a genuine dispute regarding the debt under
consideration, but may not have yet initiated legal proceedings.
The Court acknowledged the fact that situations may exist where a debtor
company may have a dispute over an operational creditor, which it may have
chosen not to escalate to a court/arbitral tribunal. The essential elements of a
dispute have been crystallized as :
 The term “dispute” must be interpreted in a wide an inclusive manner to

mean any proceeding which had been initiated by the debtor before any
competent court of law or authority;
 The dispute should be in respect of
(a) existence of the amount of debt; or
(b) quality of goods and services; or
(c) breach of representation and warranty;
 The dispute should be raised prior to the issuance of a demand notice by

the Operational Creditor;

 The debtor would have to particularize and prove the dispute in respect
of the existence of the “debt” and the “default”
 The dispute cannot be a mala fide, moonshine defense raised to defeat
the insolvency proceedings.
Therefore, the NCLT would have to prima facie verify the existence of the
pending dispute and not judge the adequacy of the same. A recent amendment
in law has incorporated this position of the Supreme Court. The Ordinance lays
down that the corporate debtor shall bring to the notice of the operational
creditor, existence of a dispute, if any, or record of the pendency of the suit or
arbitration proceedings, i.e. the word “and” has been replaced by “or”. The
amendment liberalizes the interpretation of the word “dispute”. Hence, the
existence of dispute need not be in the form of pendency of suit or arbitration
proceedings only.

INSOLVENCY RESOLUTION PROCESS
Upon admission of the application preferred by a Financial Creditor/Operational
Creditor, a moratorium is declared on the continuation and initiation of all legal
proceedings against the debtor and an interim resolution professional (“IRP”) is
appointed by the NCLT within fourteen days from the insolvency
commencement date.
The moratorium continues to be in operation till the completion of the

Insolvency Resolution Process which is required to be completed within 180
days of the application being admitted (extendable by a maximum period of 90
days in case of delay). During the continuation of the moratorirum, debtor is not
permitted to alienate, encumber or sell any asset with the approval of the
Committee of Creditors (“COC”).
Once an IRP is appointed, the board of directors is suspended and management

vests with the IRP. IRP’s are required to conduct the insolvency resolution
process, take over the assets and management of a company, assist creditors in
collecting information and manage the Insolvency Resolution Process. The first
step for the IRP is to determine the actual financial position of the debtor by
collecting information on assets, finances and operations. Information that may
be obtained at this stage include data relating to operations, payments, list of
assets and liabilities. The IRP would also have to receive and collate claims
submitted by creditors.
In order to have a more workable valuation of stressed assets and bring in

transparency in the bidding process, IBBI recently amended its regulations with
respect to the Corporate Insolvency Resolution Process. So far, the regulations
only required determination of the liquidation value of the insolvent company.
This was financially detrimental for the insolvent company, since wide
dissemination of liquidation value caused resolution applicants to submit bids
which tended to linger near the liquidation value mark which was significantly
lower than the market value.
As per the amended regulations, a fair value, along with the liquidation value,
has to be determined. The amended regulations defines ‘fair value’ to mean the
realisable value of assets of the insolvent company, if they were to be sold
between a willing buyer and seller as on the date on which insolvency
application has been admitted, on an arm’s length basis, afterum the proper

marketing. Earlier, the creditors only had the minimalistic liquidation value
serving as the benchmark for valuation of an insolvent company before
commencing the resolution process. The amended regulations seek to ensure a
maximisation of the value of the assets so that the insolvent company fetches an
economically sustainable amount for its creditors. The amended regulations also
require the RP to provide an evaluation matrix to prospective applicants before
they submit their resolution plans. The evaluation matrix refers to a set of
parameters and the manner in which these parameters are to be applied while
considering a resolution plan. While the amended regulations do not indicate
what these parameters could be, they have to be approved by the committee of
creditors and may be amended and communicated within the prescribed
timelines.
The committee of creditors evaluates various resolution plans submitted for an

insolvent company and, based on their evaluation, determine the appropriate
resolution plan. This should ensure that the bid evaluation process is more
transparent and provides a layer of procedural fairness to any challenge to the
process by unsuccessful bidders.
Additionally, there has been an important amendment to the Code, allowing

withdrawal of applications admitted for insolvency resolution subject to an
approval of 90% of the voting share of the CoC. This comes as a relief after the
judgment of the Supreme Court in the case of Lokhandwala Kataria
Construction Pvt Ltd. V. Nisus Finance and Investment Managers, wherein it
was observed that the power to allow withdrawal after admission of an
application seeking initiation of insolvency was not permitted under the Code.

COMMITTEE OF CREDITORS
The RP appointed by the NCLT would constitute a committee of creditors
comprising of all the Financial Creditors of the corporate debtor (“Committee of
Creditors”). This would incentivize a creditor to favour a collective approach
towards insolvency resolution rather than proceeding individually. A decision of
the Committee of Creditors would require to be approved by a minimum of
51% of voting share of the Financial Creditors
.For certain key decisions of the Committee of Creditors, including:
(i) appointment of the resolution professional,

(ii) (ii) approval of the resolution plan, and
(iii) (iii) increasing the time limit for the insolvency resolution process,
the voting threshold is fixed at 66%.
In contrast to the state of affairs under SICA where the consent of every
institutional creditor was required to give effect to a scheme, the Code embraces
a more practical approach by reducing the threshold. To ensure that there are no
conflicts of interest, a related party of the Corporate Debtor to whom a financial
debt is owed is not given any representation, participation or voting rights in the
Committee of Creditors.
The Code at this stage of the Insolvency Resolution Process, provides

preferential treatment to Financial Creditors since Operational Creditors do not
have the right to be a part of the Committee of Creditors. In case Financial
Debts as well as Operational Debts are owed to a person, such person would
constitute a Financial Creditor to the extent of the Financial Debt owed.
Similarly, if the right to recover an Operational Debt is transferred or assigned

to a Financial Creditor, such transferee or assignee would be an Operational
Creditor to the extent of such debt .

CHAPTER: 03
INSOLVENCY RESOLUTION
PROCESS

FAST TRACK INSOLVENCY RESOLUTION
The criterion for invoking Fast Track Resolution depends on the corporate
debtor’s assets, income and nature of creditors or quantum of debt. The
standards/ thresholds for invoking Fast Track Resolution have been provided in
the Insolvency and Bankruptcy Board of India (Fast Track Insolvency
Resolution Process for Corporate Persons) Regulations, 2017. The Regulations
cover the process from initiation of insolvency till the approval of resolution by
the NCLT, which concludes the process. The entire process is completed within
90 days. However, the NCLT may, if satisfied, extend the period of 90 days by
another 45 days.
A creditor or a debtor may file an application, along with the proof of existence
of default, to the NCLT for initiating Fast Track Resolution. After the
application is admitted and the RP is appointed, if the IRP is of the opinion,
based on the records of debtor, that the Fast Track Resolution is not applicable
to the debtor, he shall file an application to the NCLT to convert the fast track
process into a normal Insolvency Resolution Process.
The Ministry of Corporate Affairs has notified the sections 55 to 58 of the

Bankruptcy Code pertaining to the Fast Track Process and that the Fast Track
Process shall apply to the following categories of debtors:
a. A small company, as defined under clause (85) of section 2 of the

Companies Act, 2013; or
b. A startup (other than the partnership firm), as defined in the notification

dated May 23, 2017 of the Ministry of Commerce and Industry; or
c. An unlisted company with total assets, as reported in the financial statement

of the immediately preceding financial year, not exceeding Rs.1 crore.

LIQUIDATION
Under the Code, the liquidator shall create an estate, i.e. a corpus, of all assets
of the corporate debtor which can be utilized and distributed subsequent to
liquidation. The liquidator is then required to receive or collect all claims from
the creditors within a period of thirty days from the date of commencement of
the liquidation process. Pursuant to a recent amendment, the liquidator has been
empowered to adopt a new methodology for the realisation of assets, namely,
“to sell the corporate debtor as a going concern.” Subject to verification, the
liquidator may admit or reject claims and such a decision can be appealed by
creditors.
The Code also mandates that the liquidator carry out effective valuation of all
claims and assets, and states that such valuation be carried out as per parameters
laid down by the Insolvency Board. If the creditors committee does not get a
resolution plan approved, then liquidation of the company’s assets will have to
be undertaken in order to satisfying outstanding debts. The Code establishes an
ordered of priority among creditors, which will determine the sequence in which
outstanding debts will be repaid
First, the dues towards the insolvency professional including fees and other
costs incurred in the insolvency resolution process;
Second, secured creditors who chose to not enforce the security they hold and
the dues owed to workmen;
Third, employee wages;
Fourth, unsecured creditors;
Fifth, dues owed to the government and residual debts to creditors even after
the enforcement of security;
Sixthly, any other outstanding debt;
Finally, shareholders, with preference shareholders’ rights taking precedence.

Once the creditors committee chooses to liquidate . Regulation , Insolvency and
Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (As
amended by the Insolvency and Bankruptcy Board Of India (Liquidation
Process) (Amendment) Regulations, 2018. the company’s assets, there are two
paths available to the secured creditor – they may choose to opt out of the
resolution process and enforce their security to recover debts owed to them; or
they may participate in the resolution process, thereby giving up all rights over
the collateral. The latter option will prioritise the secured creditor ahead of all
except the dues owed to workmen.
Another unique feature of the Code is the low priority accorded to government
dues, unlike the Companies Act, 2013 where they are paid alongside employees
and unsecured financial creditors. Now, they are paid after secured creditors,
unsecured creditors, employees, and workmen. This undoubtedly signals the
business-first principle that is guiding the Code, where the government is
viewed only as a facilitator and regulator, and not an active participant in the
affairs of commercial entities. This is a positive step, as government agencies
have unrivalled resources at their disposal to collect their dues, and do not need
to burden the insolvency resolution process, especially in its early stages.
After an order for liquidation has been passed, suits/ legal proceeding cannot be
instituted by/ against the corporate debtor. For the purpose of liquidation, the
liquidator ordinarily sells the assets of a corporate debtor by way of an auction.
However, such sale may be by way of a private sale, in cases where
(i) the asset is perishable

(ii) the asset is capable of deterioration of value if not sold immediately
(iii) the asset is sold at a higher price than the reserve price of a failed
auction as well as;
(iv) When prior permission of the Adjudicating Authority for a private sale
has been obtained.
Additionally, private sale of assets to a related party of the corporate debtor, a

related party of the liquidator or any professional appointed by him may not be
permitted unless a prior permission is taken by the Adjudicating Authority.
Furthermore, the liquidator has the liberty to stop the sale if he has reason to
believe that there is collusion between the buyers; or the corporate debtor’s
related party and the buyer; or the creditor and the buyer.

VOLUNTARY WINDING UP & LIABLITY OF
INDIVIDUAL
VOLUNTARY WINDING UP
The Code also provides for voluntary winding up by a corporate person who has
not committed any default, provided certain conditions as laid down in the Code
are fulfilled.
The RP must verify claims raised by stakeholders against the corporate person
and wind up the affairs of the corporate company within one year from the date
of commencement of the voluntary liquidation. After the sale of the assets of the
debtor, the Liquidator would make an application to the NCLT for its
dissolution. The NCLT would then make an order for dissolution of the debtor
and an order of the same would be communicated to the authority with which
the corporate debtor is registered.
LIABILITY OF INDIVIDUAL
The Code also provides for resolution of liabilities on individuals. Some of

these liabilities have been set out below:
i. In case the operations of the debtor have been carried on with intent to
defraud creditors, persons who were knowingly parties to the same
shall be liable to make contributions to the assets of the corporate
debtor.
ii. Where the director/ partner knew or ought to have known that the
there was no reasonable prospect of avoiding the commencement of
insolvency resolution process, the directors/ partners of the corporate
debtor shall be liable to make such contribution to the assets.
iii. In case an Officer has made or caused to be made any gift/ transfer of/
charge on the property of the corporate debtor, the Officer may be
liable to be punished with imprisonment for a term not be less than
one year and with fine which shall not be less than one lakh rupees but
which may extend to one crore rupees.

CHAPTER: 04
ANALYSIS OF THE
AMMENDMENT &
DEVLOPMENT OF THE CODE

ANANLYSIS OF THE AMMENDMENT OF THE
CODE
Nearly after 3 years of the promulgation of the operation there has been
significant change in the code the ordinance has made significant change with
the view of strengthening the code. These Ordinance was aimed at
strengthening the corporate insolvency resolution process. The aim of these
ordinance is to balance the interests of the code, especially the interests of the
home buyers and micro, small an d medium enterprises, promoting liquidation
and resolution of corporate debtors by lowering voting threshold of the
committee of creditors and streamlining provisions relating to eligibility of
resolution applicants".
The President of India promulgated the Insolvency Ordinance on 6 June 2018,

Like any other legislation, the IBC also has its own deficiencies, however, the
IBBI and the government have been constantly trying to plug the gaps and
introduce practical amendments which reduce the possibility of litigation and
make the entire process fairer to each participating stakeholder. Some of the key
amendments introduced during the course of the year have been discussed
below:
1. Categorization of home buyers as Financial creditors.
The home buyers were being left high and dry when it came to playing a part
in the decision making process of the CIRP. The same has been done by
expanding the definition of "financial debt" which has been expanded to include
any amount raised from an allottee under a real estate project which shall be
deemed to be an amount having the commercial effect of a borrowing for the
purposes of Section 5(8) (f) of the Code. The implication of the same is that
homebuyers will now be treated as 'financial creditors' and form a part of
the committee of creditors of a corporate debtor (the "CoC") and play a part in
the decision-making process, which includes determining the CIRP of a
corporate debtor, including whether to accept or reject a resolution plan. The
classification as a 'financial creditor' also enables homebuyers to initiate the
CIRP against large real estate houses
2. Initiation of Insolvency resolution process by operational creditors.

There existed a difference of initiating the CIRP by financial creditors &
Operational Creditors. The financial creditors could directly initiate the
CIRP by directly filling the application with the NCLT.
The operational creditors ere first required to deliver a demand notice to the
corporate debtor u/s 8 of the code then had 10 days to either pay the debt or
notify the creditors of the existence of dispute and provide a record of
pendency of the suit .
They also required to submit a certificate from their banker to certify that no
amount of money has been received from the corporate debtor to satisfy the
operational debt.
With the ordinance the operational creditor who had to file a certificate from
the banker to certify that no amount has been received now, with the
amendment this had been made optional.
The ordinance has also reduced the requirement of corporate debtor to

provide evidence of any pending suit or proceedings.
3. Voting threshold for decision making by the IBC
Reduction in the voting threshold of the CoC from 75% to 66% for
certain key decisions such as appointment52 or replacement53 of
resolution professionals, extension of insolvency resolution process,54
approval of resolution plan etc.
4. Section 29 A of the code
The Amendment Act also brought in certain key changes in Section 29A
of IBC which discusses the eligibility criteria for resolution applicants.
One of the most important changes being the clarification on the timeline
for disqualification of those resolution applicants which hold NPA’s. The
provision now states that a resolution applicant should not hold an NPA
at the time of submission of the resolution plan. The Amendment Act has
further exempted some of the categories of resolution applicants from
certain disqualifications under Section 29A to widen the pool of potential
bidders. As per the amendment any financial entity which becomes a
related party solely by way of conversion of debt or subscription to equity
linked instruments before the insolvency commencement date will not be
considered as a related party and will not be disqualified. Further, any
entity which has acquired an NPA through the insolvency resolution
process under the IBC will not be disqualified from making another
acquisition under the IBC for the next three years

DEVLOPMENT OF THE CODE
With almost two years since the introduction of the Insolvency and Bankruptcy
Code, 2016 (“IBC” and “Code”), there have been various challenges in the
effective implementation of the Code. However, constructive interpretation by
the judiciary coupled with effective amendments to the Code have helped in
eliminating many of these teething issues.
The Insolvency and Bankruptcy Board of India (“IBBI”) which is the regulatory
and supervisory body in charge of the IBC, has done a commendable job in
proactively spreading awareness and regulating the space. Many important
judgments were pronounced throughout the year, including certain landmark
cases, where the Supreme Court has tried to ensure that the spirit of the Code is
given primacy over procedural requirements.
With multiple assets on sale, strategic investors have been first off the mark,
with billion dollar conglomerates trying to outbid each other and add coveted
companies to their inventories. The interest shown by corporate India in turning
around loss making industries is extremely encouraging for the economy as well
as the NPA laden banking system.
A recent report by the Reserve Bank of India on the trends and progress of
banking in India 2017-18, has shown an interesting comparison on the efficacy
of the IBC in improving the recovery rate and in providing the lenders with a
better realization in comparison to the erstwhile regime of recovery.
More than 1000 cases have been registered in a year Out of which more than
400 cases have been admitted by the adjudicating authority. If we dissect this
ratio we find that
21% FILED BY CREDITORS
32% FILED BY FINANCIAL CREDITORS
47% FILED BY OPERATIONAL CREDITORS
The 47% of the operational creditor is very important t focus because before
IBC , the operational creditors had n collateral so it as very difficult for them to
get back there payments from companies facing financial stress but after NCLT
any creditor who looses faith in the ability of repayment of the borrower the
can file suit under NCLT, analyzing the data n an average three cases have been

filled under these provisions out of which one case have been admitted the
NCLT on an average in daily basis.
COMPARISION OF INSOLVENCY CODE OF

UK,USA,INDIA
U.K’s code is considered as one of the best working models of insolvency
resolution throught the globe. Thus when analyzing the insolvency resolution
process we should make a comparative study between the insolvency resolving
procedures of the codes.
US law chapter11 UK law Insolvency AND

Insolvency Act Bankruptcy Code
1986 2016
GENRAL Management Management control AA will appoint IRP (S
continues. Debtor in passes to Insolvency 16) and mgt of corp
Possession (DIP) practitioner or debtor shall vest with
approach is adopted administrator IRP (S 17.1). IRP will
become RP after
approval of CoC to be
convened within 07d
of CoC formation with
75% voting share (S
22).
Who can start the Debtor can disclaim, No power with Admn RP can not make any
Insolvency & adopt or assign the to disclaim or changes in material
Bankruptcy process contracts to extract terminate the contracts without the
the value contracts unless approval of CoC. S
contracts provides 50/51 gives power &
RP can make an
application to AA to
void such extortionate
transaction
Moratorium & period Debtor has an 08 weeks of Admn Based on the
for insolvency process exclusive period of 04 appointment or information memo (S
months (ext upto 18 extended period as 29), a revolution plan
months) to propose court may allow. The can be submitted (S
and seek approval resolution plan 30). S 30.4 needs that
from impaired approval requires a the plan is to be
creditors & simple majority in approved by CoC by
shareholders within value of those 75% voting share. S 31
two months. Each class creditors present & needs that such
of creditors whose voting. approved Resolution
rights have been plan by CoC should be

impaired to vote in approved by AA.
favour by majority and
2/3 in amount actually
voting
Sale of assets during S 363 allows a debtor Admn is like an agent RP may do so after the
insolvency to sell substantially all of the company has approval of CoC (S 28).
of its assets free of the power to contract
liens. This allows assets without personal
to be sold quickly and liability.They have the
avoids further erosion power to sell any of
of the value due to the debtor property
losses without the permission
of the court.
Whats happens to the Debtor can disclaim, No power with Admn S 28.1.k - RP can not
contracts (old or new) adopt or assign the to disclaim or make any changes in
contracts to extract terminate the material contracts
the value contracts unless without the approval
contracts provides of CoC. S 50/51 gives
power & RP can make
an application to AA to
void such extortionate
transaction
Resolution plan Debtor has an 08 weeks of Admn Based on the
exclusive period of 04 appointment or information memo (S
months (ext upto 18 extended period as 29), a revolution plan
months) to propose court may allow. The can be submitted (S
and seek approval resolution plan 30). S 30.4 needs that
from impaired approval requires a the plan is to be
creditors & simple majority in approved by CoC by
shareholders within value of those 75% voting share. S 31
two months. Each class creditors present & needs that such
of creditors whose voting. approved Resolution
rights have been plan by CoC should be
impaired to vote in approved by AA.
favour by majority and
2/3 in amount actually
voting
Proceeding expenses &
who bears it and
finance during process
Management Control Management Management control AA will appoint IRP (S
post Insolvency continues. Debtor in passes to Insolvency 16) and mgt of corp
proceedings Possession (DIP) practitioner or debtor shall vest with
approach is adopted administrator IRP (S 17.1). IRP will
become RP after
approval of CoC to be
convened within 07d
of CoC formation with
75% voting share (S
22).
When the process Resolution plan Admn ceases : one 180 day with a max 90

comes to an end confirmation year or any extended day one time extension
discharges debtor’s pre time and if (S 12) with the
obligation other than Administrator either approval of Resolution
what is proposed in applies that process plan by AA (S 31)
the plan. if plan is not objective is achieved failing which
confirmed then or Administrator liquidation
conversion to application saying that proceedings as per S
Bankruptcy proceeding no purpose can be 33
as per Chapter 7 achieved hence
liquidateon
Priorities of the -Secured creditors - Secured lenders Insolvency cost
payments - to be read -Insolvency - Expenses of the - workmen dues for 24
from top to bottom in proceeding cost insolvent estate months
the order of priorities -Claims arising during - Employees - Secured creditors
the gap period - 04 months prior to - Employees for
-Employees wages & insolvency preceding 12 months
benefits - Prescribed Part - Unsecured creditors
- Deposit claims protected portion of - State dues or
- Govt tax claims the money to secured creditors for
- Unsecured claims unsecured creditors any amount unpaid
- Equity interes - a formulae - Floating - any remaining debts
charge creditors & dues
- Unsecured creditors - Pref shareholders
- Equity holders - Equity holders

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INSOLVENCY AND BANKRUPTCY CODE 2016

SUMMER INTERNSHIP REPORT

CM (LAW), MARKETING HEAD OFFICE, MUMBAI

INDIAN OIL CORPORATION LIMITED

2nd (Yr.) 4th Semester

“IF YOU WANT TO WALK FAST GO ALONE

A project is a joint endeavour which is to be accomplished with utmost compassion,

INSOLVENCY AND BANKARUPTCY CODE2016 Page 2

(Signature of the Candidate)

INSOLVENCY AND BANKARUPTCY CODE2016 Page 3

Aims and Objectives………………………………………………………………………….

Indian Oil Corporation Limited ( An overview)………………………………………….

INSOLVENCY AND BANKARUPTCY CODE2016 Page 4

A. SYNOPSIS OF THE CASE

A SYNOPSIS OF THE CASE

INSOLVENCY AND BANKARUPTCY CODE2016 Page 5

NAGARJUNA OIL CASE……………………………………………..

A. SYNOPSIS OF THE CASE

A. SYNOPSIS OF THE CASE

ARCELOR MITTAL INDIA PVT. LTD. &ORS.V. SATISH KUMAR GUPTA

A. SYNOPSIS OF THE CASE

A. SYNOPSIS OF THE CASE

A. SYNOPSIS OF THE CASE

INSOLVENCY AND BANKARUPTCY CODE2016 Page 6

AIMS AND OBJECTIVES

INSOLVENCY AND BANKARUPTCY CODE2016 Page 7

The researcher considers the following hypothesis:

INSOLVENCY AND BANKARUPTCY CODE2016 Page 8

IBC Insolvency and bankruptcy code

INSOLVENCY AND BANKARUPTCY CODE2016 Page 9

INSOLVENCY AND BANKARUPTCY CODE2016Page 10

The company operates through a network of approximately 9 refineries; 13,391

Indian Oil Corporation Limited’s exploration and production portfolio

The company serves consumer, industrial, and marine customers, as well as

INSOLVENCY AND BANKARUPTCY CODE2016Page 11

Type of company Government Company under Section 617 of the Companies

INSOLVENCY AND BANKARUPTCY CODE2016Page 12

 THE CODE : OVERVIEW

INSOLVENCY AND BANKARUPTCY CODE2016Page 13

INSOLVENCY AND BANKARUPTCY CODE2016Page 15

 The Sick Industrial Companies Act 1985,

Broadly, these statutes provided for a disparate process of debt restructuring,

The Code provides creditors with a mechanism to initiate an insolvency

A Financial Creditor is one whose relationship with the debtor is a pure

INSOLVENCY AND BANKARUPTCY CODE2016Page 16

An Operational Creditor is a creditor who has provided goods or services to the

A is the debtor, B the bank has provided loan on certain considerations or

INSOLVENCY AND BANKARUPTCY CODE2016Page 17

INSOLVENCY AND BANKARUPTCY CODE2016Page 18

INSOLVENCY AND BANKARUPTCY CODE2016Page 19

INSOLVENCY AND BANKARUPTCY CODE2016Page 20

The Adjudicating Authority after the admission of the application declare the

The committee of creditors shall comprise all financial creditors of the

If the Adjudicating Authority is satisfied that the resolution plan as approved by

INSOLVENCY AND BANKARUPTCY CODE2016Page 21

The liquidator communicates his decision of admission or rejection of claims to

INSOLVENCY AND BANKARUPTCY CODE2016Page 22