Lenders Law

IBBI Valuation Framework – Current vs Proposed The Insolvency and Bankruptcy Board of India (IBBI) has released a Discussion Paper on Strengthening the Valuation Process under the IBC . The IBBI's proposed overhaul of valuation standards under the Insolvency and Bankruptcy Code seeks to eliminate inconsistencies, enhance transparency, and reduce subjectivity in valuation outcomes. Key reforms include introducing a unified valuation standard, redefining the appointment structure of valuers, and expanding valuation scope to intangible and synergy values. These reforms aim to strengthen market confidence, improve CoC decision-making, and bring valuation practices closer to global norms. However, proportionality remains essential—larger insolvencies require deeper analytical structures, while MSMEs should not be burdened with disproportionate compliance costs. Stakeholder feedback remains critical to fine-tuning these reforms. This blog analyses the changes suggested in the...

  In the recent ruling of Home Kraft Avenues vs Jayesh Sanghrajka and Anr . [1] , the National Company Law Appellate Tribunal has held that the creditor will be treated as “secured” during corporate insolvency resolution process (CIRP) despite the charge being unregistered under Section 77 of Companies Act 2013. In this article, the author has tried to analyse the said ruling. Provisions relied upon by NCLAT: The Hon’ble NCLAT relied upon the language stipulated in Section 77(3) of Companies Act 2013, reproduced as follows: “Notwithstanding anything contained in any other law for the time being in force, no charge created by a company shall be taken into account by the ‘liquidator’ or any other creditor unless it is duly registered under subsection (1) and a certificate of registration of such charge is given by the Registrar under sub-section (2).” Considering the aforementioned, the Hon’ble Appellate Tribunal observed that the said section casts an obligation only upon “l...

1. Significant Supreme Court Judgments: (a) Arun Kumar Jagatramka vs. Jindal Steel and Power Ltd. & Anr. (15 March, 2021): The prohibition placed by the Parliament in Section 29A and Section 35(1)(f) of the Code must also attach itself to a scheme of compromise or arrangement under Section 230 of the Companies Act, 2013, when the company is undergoing liquidation under the auspices of the Code. (b) Kalparaj Dharamshi & Anr. Kotak Investment Advisors Ltd. & Anr. (10 March, 2021):   It is sought to be urged that since there has been a material irregularity in exercise of powers by RP, NCLAT can interfere with the exercise of power by RP u/s 61(3)(ii) of IBC, however, in the instant case, the court observed that all actions of RP have the seal of approval of CoC, and in view of the paramount importance given to the decision of CoC, the Apex Court held that NCLAT cannot interfere with the commercial decision of the CoC. The legislative scheme, as interpreted by various de...