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Economic Times
2 days ago
- Business
- Economic Times
IBC amendment seeks to end legal confusion and discretionary power
ANI IBC Amendment Bill 2025, has provisions for faster and efficient resolution of insolvency cases New Delhi: Various Supreme Court judgments in recent years have played their part in influencing the amendment to the Insolvency and Bankruptcy Code (IBC) proposed last week, as the government seeks to remove any legal ambiguity from the extant legislation, experts said. As per the proposed amendment, only the proof of default would be enough to admit an insolvency case. This would curb the discretionary power of the adjudicating authority in delving into other issues while deciding whether to admit a case. In the Vidarbha Industries Power versus Axis Bank case in 2022, the apex court had stated that section 7 of the IBC provides discretionary power to the National Company Law Tribunal (NCLT) to accept or reject an insolvency application, and that it can also consider relevant issues other than just default while doing so. The IBC amendment was introduced in the Lok Sabha last week and referred to a select committee. Anoop Rawat, national practice head (insolvency and restructuring practice) at Shardul Amarchand Mangaldas, said, "By clarifying that only default is required for admission into insolvency under section 7, prescribing timelines for the NCLT for admission of insolvency and approval of resolution plans, clarifying the definition of security interest (in aftermath of SC judgment in Rainbow Papers), and laying down the procedure for settlement proposals under Section 12A (in light of the SC judgment in Byju's), the amendment bill intends to remove ambiguities marring the IBC today." In the state tax officer versus Rainbow Papers case in 2023, the Supreme Court relied on the Gujarat VAT Act and held that the state tax department was a secured creditor. Experts had then said it was against the IBC intent and sought clarity on the status of government latest amendment clarified that government dues come lower in the priority order under the IBC's waterfall mechanism than those of secured secured creditor status will be recognised only if there are commercial agreements between the parties to this effect, it the latest amendment made it clear that once an insolvency case is admitted, the case can't be withdrawn by parties until the constitution of the committee of creditors (CoC). This is in sync with the Supreme Court verdict in a case involving Byju's parent Think and Learn and the Board of Control for Cricket in India (BCCI).
Time of India
2 days ago
- Business
- Time of India
IBC amendment seeks to end legal confusion and discretionary power
New Delhi: Various Supreme Court judgments in recent years have played their part in influencing the amendment to the Insolvency and Bankruptcy Code (IBC) proposed last week, as the government seeks to remove any legal ambiguity from the extant legislation, experts said. As per the proposed amendment, only the proof of default would be enough to admit an insolvency case. This would curb the discretionary power of the adjudicating authority in delving into other issues while deciding whether to admit a case. In the Vidarbha Industries Power versus Axis Bank case in 2022, the apex court had stated that section 7 of the IBC provides discretionary power to the National Company Law Tribunal ( NCLT ) to accept or reject an insolvency application, and that it can also consider relevant issues other than just default while doing so. The IBC amendment was introduced in the Lok Sabha last week and referred to a select committee. Anoop Rawat, national practice head (insolvency and restructuring practice) at Shardul Amarchand Mangaldas , said, "By clarifying that only default is required for admission into insolvency under section 7, prescribing timelines for the NCLT for admission of insolvency and approval of resolution plans, clarifying the definition of security interest (in aftermath of SC judgment in Rainbow Papers), and laying down the procedure for settlement proposals under Section 12A (in light of the SC judgment in Byju's), the amendment bill intends to remove ambiguities marring the IBC today." In the state tax officer versus Rainbow Papers case in 2023, the Supreme Court relied on the Gujarat VAT Act and held that the state tax department was a secured creditor . Experts had then said it was against the IBC intent and sought clarity on the status of government dues. The latest amendment clarified that government dues come lower in the priority order under the IBC's waterfall mechanism than those of secured creditors. The secured creditor status will be recognised only if there are commercial agreements between the parties to this effect, it clarified. Similarly, the latest amendment made it clear that once an insolvency case is admitted, the case can't be withdrawn by parties until the constitution of the committee of creditors (CoC). This is in sync with the Supreme Court verdict in a case involving Byju's parent Think and Learn and the Board of Control for Cricket in India (BCCI).
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Business Standard
5 days ago
- Business
- Business Standard
Best of BS Opinion: Myanmar tensions, Dubai's Malathon, and Sindoor lessons
The Insolvency and Bankruptcy Code (IBC) Amendment Bill aims to reinforce core principles while streamlining processes. By undoing the Vidarbha Industries and Rainbow Papers rulings, it restores the original insolvency trigger and prioritises secured creditors over government dues. It strengthens the 'clean slate' principle, binds all stakeholders to approved resolution plans, and safeguards existing licences. Tighter timelines for adjudicating authorities, incorporation of regulatory provisions into the Code, and new rules for creditor committees are notable steps. Yet, as M S Sahoo points out, persistent inequities — such as the gap between recoveries for financial and operational creditors — remain unaddressed, and cross-border provisions risk concentrating power with the executive. Shifting to the Northeast, political developments in Myanmar and Manipur carry significant regional implications. Myanmar's plan to hold elections in December 2025 comes even as civil war leaves border states vulnerable to Chinese influence. These tensions spill over into Mizoram, Nagaland, and Manipur, where infiltration from Myanmar is tied to ethnic strife between Meitei and Kuki-Zo groups. Measures like scrapping the Free Movement Regime and initiating border fencing may take years to complete. Resistance groups with cross-border ties remain active. As Aditi Phadnis notes, while President's rule in Manipur has reduced violence, incidents like the June 2025 protests show underlying divisions remain ahead of pivotal elections in Myanmar, India, and Bangladesh. In Dubai, coping with August heat that touches 50 degree Celsius has taken a novel turn. The 'Mallathon,' organised by the Dubai Sports Council, opens shopping malls early for walkers and joggers, creating climate-controlled fitness spaces. About 500 people participate daily, including corporate teams, with attractions like robotic humanoid races adding flair. Inspired by similar practices in colder regions abroad, the initiative, says Sandeep Goyal, has been embraced as an inclusive and practical response to extreme weather, even if some critics dismiss it as image-building. Meanwhile, Operation Sindoor has reignited debate on air force doctrines. The Pakistan Air Force traditionally focuses on fleet preservation and air-to-air combat tallies, while the Indian Air Force prioritises strategic objectives, even at higher aircraft loss rates. As Shekhar Gupta observes, the IAF's strikes on preselected targets contrasted sharply with the PAF's defensive posture, reflecting a longstanding divergence in approach. Finally, Kumar Abishek delves into the science of randomness, distinguishing it from unpredictability and highlighting its role in cryptography, simulations, and secure communications. Advances in quantum computing now allow certified randomness generation, a reminder of both technology's reach and nature's limits. Stay tuned!
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Business Standard
5 days ago
- Business
- Business Standard
IBC Amendment: More clarity, less reform, focuses on incremental fixes
By sidestepping deeper structural issues and leaning on delegated legislation, it offers incremental fixes where the system needs a transformative overhaul M S Sahoo Mumbai Listen to This Article The IBC Amendment Bill uses the phrase 'it is hereby clarified' 17 times. One such clarification restores the original trigger for initiating corporate insolvency resolution: Admission if a default exists, rejection if it does not, and no other grounds. This undoes Vidarbha Industries (2022) and reaffirms what the Bankruptcy Law Reforms Committee, the original notes on clauses, and Innoventive Industries (2017) had already settled. Another restores the original liquidation waterfall by overturning Rainbow Papers (2022), which had put government dues under the Gujarat Value Added Tax Act, 2003, at the same level as secured creditors. The Bill makes it clear
