Bankruptcy and Insolvency Adjudicator

Tags Bankruptcy and Insolvency Who is the Bankruptcy and Insolvency

Adjudicator, Insolvency and Bankruptcy Adjudicator;
Board of India, Laws to deal with bad
The Code proposes two separate tribunals to
Loans, Reserve Bank of India, What is
oversee the process of insolvency resolution,
Insolvency & Bankruptcy Code
for individuals and companies:

 The National Company Law

Tribunal for Companies and Limited
Liability Partnership firms; and
 The Debt Recovery Tribunal for
individuals and partnerships.

Procedure for application

The Insolvency and Bankruptcy Code (IBC)

 A plea for insolvency is submitted to
— billed as the biggest economic reform in
the adjudicating authority (NCLT in
India after the Goods and Services Tax
case of corporate debtors) by
(GST) — is a rare example of a speedy
financial or operation creditors or the
rollout and implementation of a much-
corporate debtor itself.
needed law. Although it is undergoing an
initial period of adjustment and cleaning-up,  The max time allowed to either
the law lays down a robust framework and accept or reject the plea is 14 days.
time-bound road map to deal with failed
 If the plea is accepted, the tribunal
recovery of bad loans leading to distressed
has to appoint an Insolvency
or failed businesses.
Resolution Professional (IRP) to
draft a resolution plan within 180
days (extendable by 90 days)
 following which the Corporate
Insolvency Resolution process is
initiated by the court.
 For the staid period, the board of
directors of the company stands
suspended, and the promoters do not
have a say in the management of the
company.
 The IRP, if required, can seek the
support of the company’s
management for day-to-day
operations.
 If the CIRP (Corporate Insolvency
Resolution Process) fails in reviving
the company the liquidation process
is initiated.
The Making of a Bankruptcy Order
As many will be aware, debtor’s bankruptcy
petitions have been abolished being replaced
by online bankruptcy applications. These
applications are determined by
adjudicator rather than a judge, thus
removing the court from the petition
process.
In a case that is one of the first of its kind, a
judgment has been made on an appeal
against an adjudicator’s refusal to make a
bankruptcy order. This case is unique in not
only did it consider issues with regard to the
bankruptcy application process but also
addressed a number of further issues. Issues
considered were:
 What is the meaning of ‘satisfied’ in
IA 1986, s263K(2)? (issue one)
 What is the nature of an appeal under
IA 1986, S263N(5)? (issue two)
 How should evidence on an appeal
be adduced? (issue three)
 What role should the adjudicator
play on an appeal? (issue four)
 What role should creditors play on
an appeal and should they be
notified? (issue five)
 Which court and what level of judge
should hear appeals under IA 1986,
s263N(5)? (issue six)
 Who should prepare the hearing
bundle for the court? (issue seven)
 Who should pay the costs of an
appeal? (issue eight)
Appealing the adjudicator’s decision not
an to make a bankruptcy order
In what is believed to be the first reasoned
judgment dealing with an appeal from a
decision of the adjudicator not to make a
bankruptcy order, we consider the judgment
in Re Budniok; Budniok v Adjudicator,
Insolvency Service.
The High Court of Justice allowed the
applicant’s appeal against a decision of the
adjudicator of the Insolvency Service, in
which the adjudicator refused to make a
bankruptcy order in relation to him. On the
evidence, there was nothing to prevent the
order being made. The court also gave
consideration to general issues arising out of
appeals under the Insolvency Act 1986 (IA
1986).

Submitted by

Prabhakaran-II MBA

Muhammad Samil Musthafa-1 MBA

Hindusthan college of engineering and

technology