NCLT Lawyer Kolkata Insolvency

The IBC, 2016, is a comprehensive code covering corporate insolvency resolution (Part II), liquidation (Part III), and individual/firm insolvency (Part III). The key objective is time-bound resolution — the CIRP must be completed within 330 days (including litigation time). The key participants in the IBC ecosystem are: (a) Adjudicating Authority — the NCLT for corporate persons and the DRT for individuals/firms. (b) Insolvency Professional/Resolution Professional (RP) — appointed by the NCLT to manage the corporate debtor's affairs during CIRP, replacing the board of directors. (c) Committee of Creditors (CoC) — comprising financial creditors, which takes all key decisions during CIRP (appointment of RP, approval of resolution plan). (d) Resolution Applicant — any person who submits a resolution plan for the revival of the corporate debtor. (e) Information Utility (IU) — a repository of financial information to establish default. The IBC process begins with an application under Section 7 (by financial creditor), Section 9 (by operational creditor), or Section 10 (by the corporate debtor itself — voluntary insolvency). The threshold for initiating CIRP is a default of at least Rs. 1 crore. Once admitted, a moratorium under Section 14 prohibits all legal proceedings, asset transfers, and enforcement actions against the corporate debtor — this 'calm period' allows the RP and CoC to work on a resolution plan without the distraction of creditor actions.

The CIRP follows a statutorily defined timeline. (1) Filing and admission: The creditor files an application under Section 7 or 9 before the NCLT. The NCLT must admit or reject the application within 14 days. (2) Moratorium: On admission, a moratorium under Section 14 comes into effect — all suits, proceedings, execution, and asset transfers are stayed. The board of directors is suspended and replaced by the Interim Resolution Professional (IRP). (3) Public announcement and claims: The IRP makes a public announcement inviting claims from all creditors (financial and operational). Creditors must submit their claims with proof within the stipulated time. (4) Constitution of CoC: The IRP constitutes the Committee of Creditors comprising all financial creditors, voting in proportion to their debt. The CoC may replace the IRP with a Resolution Professional (RP). (5) Resolution plan: The RP invites resolution plans from prospective resolution applicants. The CoC evaluates the plans and votes — a plan requires approval by at least 66% of the voting share of the CoC. (6) NCLT approval: The approved resolution plan is submitted to the NCLT for final approval under Section 31. Once approved, the plan is binding on all stakeholders — corporate debtor, employees, members, creditors, guarantors, and government authorities. (7) If no resolution plan is approved within the timeline, the corporate debtor goes into liquidation under Section 33. Advocate Panchanand Shaw represents clients at every stage — from initiating CIRP as a creditor, defending against CIRP admission as a corporate debtor, participating in CoC meetings as a financial creditor, and challenging resolution plans before the NCLT and NCLAT.

For a corporate debtor, the admission of a CIRP application is often an existential threat. Defences against initiation of CIRP include: (a) The debt is disputed — there is a pre-existing dispute regarding the goods/services/goods supplied (for operational creditor applications under Section 9). The NCLT must reject the application if notice of dispute has been received by the operational creditor, or if there is a plausible contention requiring further investigation. (b) The debt is not 'due and payable' — it is contingent, conditional, or not yet matured. (c) The application is barred by limitation — the right to file the application has expired under the Limitation Act. (d) The application is not complete — mandatory requirements (e.g., certificate from a financial institution confirming default, or for operational creditors, a copy of the invoice and demand notice) are not met. (e) The debt falls below the threshold (Rs. 1 crore). (f) The application is filed with a mala fide intent to recover a disputed debt by threatening insolvency. Advocate Panchanand Shaw has successfully defended corporate debtors against CIRP applications by raising these and other defences, often securing dismissal of the application at the admission stage itself.

Orders of the NCLT can be appealed to the National Company Law Appellate Tribunal (NCLAT) under Section 61 of the IBC. The appeal must be filed within 30 days (extendable by 15 days on sufficient cause). The NCLAT, which sits in New Delhi (with a circuit bench in Chennai), re-examines the NCLT's order on both facts and law. Common NCLAT appeals in IBC matters include: challenging the admission or rejection of a CIRP application, challenging the approval or rejection of a resolution plan, challenging an order of liquidation, and challenging orders relating to avoidance transactions (preferential, undervalued, or fraudulent transactions under Sections 43-66 of the IBC). A further appeal from the NCLAT lies to the Supreme Court under Section 62 of the IBC — on a question of law, within 45 days. Advocate Panchanand Shaw handles NCLAT appeals — drafting appeal memoranda, coordinating with arguing counsel in Delhi, and advising clients on the prospects and strategy of the appeal. Given the time-sensitive nature of IBC proceedings, speed in filing and arguing appeals is critical.

From 1 December 2019, the IBC's provisions relating to personal guarantors to corporate debtors were brought into force. This means that a financial creditor can now initiate insolvency proceedings against a personal guarantor (typically a director/promoter who gave a personal guarantee for the company's loan) simultaneously with or independently of the CIRP against the corporate debtor. The application against a personal guarantor is filed before the DRT (not the NCLT) under Part III of the IBC. Once admitted, an interim moratorium applies, and a resolution professional is appointed to examine the guarantor's assets and liabilities and recommend a repayment plan (or, if no viable plan, recommend bankruptcy). This provision has significant implications for directors and promoters — a personal guarantee that was once seen as a formality now exposes them to personal insolvency proceedings. Advocate Panchanand Shaw advises personal guarantors on their exposure under the IBC and represents them in DRT insolvency proceedings.