Book Description

Insolvency And Bankruptcy Code, 2016 has been the most volatile piece of Legislation since its enactment in 2016. There have been numerous Landmark judgments in the field by various forums which have tried to clarify the unventured terrain in the Code. There have been varying interpretation of these areas in the code by different forums and the and on the top of it the Legislation has undergone few amendments since its enactment. The Code has been used as a recovery mechanism by creditors and the Corporate debtors have also fallen prey to said recovery tactics by the creditors under the fear of insolvency petition being admitted against the Corporate Debtors and the implications thereto. However, the recent developments and judgments of the Apex Authority have had the effect of putting the Operational Creditors on a back foot. The Operational creditors, in case of disputed claims, are made to think whether to file the claim before the Resolution Professional or to continue with the adjudicatory process by the Judicial Bodies pursuant to the Moratorium being lifted. However, in the recent Judgment of Sirpur Paper Mills Ltd vs I.K. Merchants Pvt. Ltd , the Kolkata High Court has held that non participation by the Operational Creditor in the Corporate Insolvency Resolution Process, cannot defeat the claim existing prior to insolvency. The question therefore arises is whether filing claims before the Resolution Professional mandatory?Through this article the author has tried to analyze the recent Judgments passed by the Courts and also the mechanism in the Insolvency and Bankruptcy Code 2016, and try to figure out whether the Operational Creditor has an option not to file the claims with the Resolution Professional and the options available with the Operational Creditor in case its disputed claims are not considered by the said Resolution Professional.