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Corp Viva
Corp Viva
Corp Viva
HISTORY OF IBC
✓ Sick Industrial Companies Act (SICA), the
✓ Recovery of Debts due to Banks and Financial Institutions Act (RDDBFI Act),
✓ Securitization and Reconstruction of Financial Assets
✓ Enforcement of Security Interest Act
✓ However, these laws suffered from inefficiencies, conflicts, and prolonged timelines,
necessitating the introduction of the IBC.
✓ Transparency:
✓ conduct investigations into transactions, and fraudulent trading
✓ These findings are recorded in Form CIRP 8, providing transparency regarding the
financial conduct of the corporate debtor.
✓ Accountability: corporate leaders responsible for their actions.
✓ boards of directors of corporate debtors are replaced by insolvency professionals during
the resolution process.
VOLUNTARY LIQUIDATION
✓ a solvent company, having adequate assets to cover its debts, elects to cease its
operations and distribute its assets among stakeholders
✓ objective is to ensure equitable distribution of the company's assets among its
creditors and shareholders, while facilitating a
✓ prompt and efficient exit strategy from the business landscape.
✓ specific criteria: The company must maintain solvency, indicating its ability to settle
liabilities.
✓ A special resolution passed by the shareholders must affirm the company's decision to
wind up voluntarily.
In this case, the Court made it clear that once an insolvency professional assumes management
of a company, former directors who are no longer part of the management cannot represent
1
Innoventive Industries Ltd. v. ICICI Bank - (2018) 1 SCC 407
the company in appeals. Additionally, it underscored the supremacy of the Insolvency and
Bankruptcy Code, 2016, over conflicting state laws.
M/S. Vistra ITCL (India) & Ors. v. Mr. Dinkar Venkatasubramanian & Anr.2
In a ruling from May 2023, the Supreme Court addressed the entitlement of secured creditors
to retain sale proceeds from shares pledged by a corporate debtor. It was clarified the rights of
secured creditors under Sections 52 and 53 of the IBC, ensuring their protection in insolvency
proceedings.
2
M/S. Vistra ITCL (India) & Ors. v. Mr. Dinkar Venkatasubramanian & Anr. (2023) 7 SCC 324