Lenders Law

When an operational creditor issues a demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 , the corporate debtor has 10 days to: Repay the amount due, or Bring to notice the existence of a dispute . Sometimes, the real issue arises when a reply is sent — but instead of being a genuine dispute, it is a tactic to stall or avoid insolvency proceedings, or instead of a full reply, the corporate debtor sends an “interim reply” within those 10 days — saying something like “ We are in the process of preparing a detailed response to the Demand Notice. Meanwhile, we request you to kindly treat this communication as our interim/ holding response” .  Now, the question which arises here is: does this obligate the creditor to wait further before filing an application under Section 9? The Legal Framework Statutory Timeline : The Code strictly prescribes 10 days from receipt of the Section 8 notice. There is no provision for extending this timeline merely bec...

1) The NCLAT ruled on several cases related to IBC in July-August 2021, providing clarifications on key issues.  2) In one case, the NCLAT allowed the withdrawal of CIRP proceedings after full payment to operational creditors, noting that mere claims do not constitute default before the CoC is constituted.  3) In another case, the NCLAT held that bank guarantees are the responsibility of banks to release funds, minus amounts provided by CDs, as the assets of sureties are separate from CDs. 4) The NCLAT dismissed several intervenor applications filed prior to CoC constitution, noting the objective of IBC is revival, not just recovery.