Role of Adjudicating Authorities

The Insolvency and Bankruptcy recognized the NCLT as constituted under section 408 of the Companies Act 2013 to be the adjudicating authority for the purpose of insolvency and liquidation of corporate persons. The proposal for constituting the NCLT was made by the Eradi Committee.

• Once the resolution plan which is approved by the COC and placed before the Adjudicating authority for approval, it will have to ensure that whether the resolution plan has met the following requirements as per Section 30(2) of the Code.
• Approval of the COC with 66% Voting share the resolution plan
• Whether the resolution plan is fulfilled the requirements of Section 30(2) of the Code Section 30(2) of the Code says that the resolution plan should meet the following requirements
• It should provide for payment of insolvency and resolution Process costs
• It must provide for the payment of debts of Operational Creditors which should not be less than the amount to be paid as per Section 53 in case of liquidation of the corporate debtor or amount to be paid in the case of resolution of the corporate debtor.
• It must provide for management of the affairs of the Corporate Debtor after approval of the resolution plan.
• Implementation and supervision of the resolution plan.
• It must not contravene any of the provisions of the law.
• It should confirm to the such other requirements as may be specified by the Board.

NCLT

The adjudicating authority for corporate person as mentioned above shall be the NCLT having territorial jurisdiction over the place where the registered office of the corporate person is located. It is important to note that incase where a corporate insolvency resolution process or liquidation proceedings of a corporate debtor is pending before NCLT, then the application for insolvency resolution or bankruptcy of personal guarantor of such corporate debtor shall also be filed before the same NCLT as that of the corporate debtor.

If the insolvency process or bankruptcy proceedings of personal guarantor of the corporate debtor is appending before any court or tribunal then it shall in such a situation shall transferred to the same adjudicating authority which is dealing with the insolvency resolution process or liquidation proceedings of the corporate debtor.

NCLAT

Once the application under IBC is admitted by the NCLT from the corporate person then any person aggrieved by the order of NCLT may prefer an appeal before the NCLAT. Every appeal shall be filed before NCLAT within thirty days. An appeal can be filed beyond thirty days if NCLAT is satisfied that there was a sufficient cause for not being able to file within the thirty days duration , but then within fifteen days period after thirty days only.

Supreme Court

If a person is not satisfied and is aggrieved by the order of NCLAT then in such a case he can file an appeal to the Supreme Court. The application to be filed shall be based only on question of law that arouse out of the order only.

The application before Supreme Court shall be filed within forty-five days from the date of receipt of order of NCLAT. However, the Supreme Court may allow extension beyond forty-five days if it is satisfied that person was prevented by sufficient clause. The extension allowed shall be only fifteen days beyond the forty-five days duration.

Offences and penalties in relation to corporate insolvency

The Insolvency and Bankruptcy Code, 2016 makes stringent provisions for punishments to fraudulent persons. These include imprisonment. Such offences have to be tried in criminal courts only.

Offences under of this Code shall be tried by the Special Court established under Chapter XXVIII of the Companies Act, 2013.

Court shall not take cognizance of any offence punishable under this Act, except on a complaint made by the Board (IBBI) or the Central Government or any person authorised by the Central Government in this behalf section 236(2) of Insolvency Code, 2016.

The provisions of the Code of Criminal Procedure, 1973 shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be deemed to be a Court of Session and the person conducting a prosecution before a Special Court shall be deemed to be a Public Prosecutor.