Hello! Welcome back to our updates from the insolvency law landscape in India.
In the news
- Insolvency and Bankruptcy Board of India (“IBBI”) has recently released a discussion paper on issues relating to the appointment and functioning of registered valuers, consequences of the proposed removal of interim moratorium protection for personal guarantors, continuity of the resolution professional’s obligations during the pendency of withdrawal applications under section 12A Insolvency and Bankruptcy Code, 2016 (“IBC”) etc. The comments to the discussion paper can be submitted to IBBI tile 22.07.2026.
- Reliance Infrastructure Ltd. has submitted a representation to SEBI, NSE and BSE, pressing them to review the Additional Surveillance Measure (ASM) linked to the IBC. In its representation, Reliance Infrastructure Ltd. points out that ASM allows trading only once a week within a narrow ±5 per cent price band, resulting in price movements that are largely mechanical and predictable. It also flagged that the ASM framework kicked in even though the National Company Law Appellate Tribunal (“NCLAT”) had already stayed the Corporate Insolvency Resolution Process (“CIRP”) against the company.
- NCLAT has set aside an NCLT order directing CIRP against Vikram Solar Limited, ruling that the operational debt involved fell short of the Rs. 1 crore threshold — the minimum requirement under the IBC to initiate CIRP against corporate debtors.
From the Docket
- Delay in re-filing appeal before SC cannot be condoned – The Supreme Court in CA Ramchandra Dallaram Choudhary vs. Adani Infrastructure and Developers held that under Supreme Court Rules, 2013, an appeal has to be re-filed within 28 days and it cannot condone delay for appeal filed under section 62 of the IBC if such appeal has been re-filed after 28 days.
- Refund of court fee– In Sainik Industries vs. Indian Sugar Manufacturing, the Delhi High Court has held that accepting claims under a resolution plan amounts to a “settlement” within the meaning of Section 16 of the Court Fees Act, 1870; and entitles a plaintiff who withdraws a suit after a resolution plan is approved to seek refund of the court fees.
- No insolvency proceedings without invoking personal guarantee – In Think Hard India vs. Mr. Narendra Rajani, NCLT Mumbai turned away the insolvency petition against a personal guarantor, since the creditor had not invoked the personal guarantee before sending the demand notice. It clarified that a demand notice in Form B is simply a statutory notice under Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019, for kicking off insolvency proceedings, and does not amount to invocation of the guarantee.
- Existence of debt and default sufficient to initiate CIRP – NCLT Ahmedabad, in Standard Capital Markets vs. Areli Commerce, has held that debt and default alone are enough to set CIRP in motion under section 7 of the IBC. Pleas of financial hardship, liquidity crunch, market conditions and on-going revival efforts simply do not hold up as valid grounds to refuse initiation of CIRP.
- Part payment does not mean absence of dispute – In Ramareddy Devraj vs. IC India, NCLT Bengaluru has held that part-payments made to the operational creditor after a demand notice do not conclusively rule out a dispute over the entire operational debt claimed in an insolvency petition — especially where the parties’ dealings arise from a continuous running account spanning multiple projects, even as the quantum of liability itself remains disputed.
Thank you for reading! We will be back again with more updates on insolvency.
Disclaimer
The content provided in this newsletter is intended for general awareness and should not be considered as legal advice. Readers are advised to consult with a qualified legal professional regarding any specific issues mentioned herein. If you have any questions about any of these developments or would like to see something different next month, reach out to us at knowledge@sarthaklaw.com.