About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

LOG IN
LOG IN


9 RGNUL Fin. & Mercantile L. Rev. 94 (2022)
NCLT's Judicial Inference: A Hurdle to the Commercial Wisdom of Committee of Creditors under the IBC

handle is hein.journals/rlfladme9 and id is 108 raw text is: V. NCLT'S JUDICIAL INTERFERENCE: A HURDLE TO THE COMMERCIAL WISDOM OF COMMITTEE OF CREDITORS UNDER THE IBC - Nipun Ninad Naphade* ABSTRACT Over several decades, the Government of India has introduced special legislations to govern complex areas of law, and special tribunals to adjudicate upon the matters arising therein. In this context, the Insolvency & Bankruptcy Code, 2016 (IBC) was introduced to replace ineffective laws like the Sick Industrial Companies (Special Provisions) Act, the Recovery of Debts Due to Banks & Financial Institutions Act, and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. The new Code was a well-planned reform and made the process easier to some extent. However, the overlapping provisions and vague interpretation of certain aspects led to jurisprudential ambiguity. One such area was the liberty provided to the Committee of Creditors (COC) under the Act, in taking decisions or giving approval to a particular resolution plan. The dilemma of authority arose as the same plan would then require the approval of the National Company Law Tribunal (NCLT). The NCLT in some cases held that such a need for judicial approval meant that the commercial wisdom of the COC was not the sole deciding criteria in the resolution process, and the judicial wisdom of the Adjudicating Authority was intended to be employed before giving approval. This paper analyses the abovementioned ambiguity through an analysis of the bare provisions of the IBC, exploration of the opinions presented by government bodies, and an in-depth study of what various courts opined on the issue. The study attempts to explain how the IBC has fortified the position of the COC in order to protect the interests of the stakeholders and to increase the confidence of investors in the market. * The author is fourth-year student of B.B.A. LL.B. (Hons.) at Symbiosis Law School, Pune. Views stated in this paper are personal.