LEGAL PRACTICES OF INSOLVENCY AND BANKRUPTCY IN INDIA

Bankruptcies have historically followed the business cycle closely. Failure of certain company strategies is a natural part of the market economy’s process. When a firm fails, the optimum outcome for society is a quick renegotiation between financiers, to fund the going concern with a new structure of obligations and a new management team. The purpose of bankruptcy legislation is to recover an entity’s debt and distribute its assets among competing claimholders. As a result, the RBI’s asset quality reviewers identified an extremely high number of NPAs. The government’s most major change is the insolvency and bankruptcy legislation. On the heels of the adoption of the Insolvency and Bankruptcy Code, India jumpedfrom 108thto 52nd in the resolving insolvency category, while its rating improved significantly in dealing with construction permits to 27th from 52nd and trading across borders to 68th from 80th. The purpose of this study is to look into the regulatory framework in India for insolvency and bankruptcy. The impact of insolvency and bankruptcy Code on the Indian economy is also discussed in the study. KEYWORDS: Insolvency, Bankruptcy, Code, Regulatory, SARFAESI Act, National Company Law Appellate Tribunal (NCLAT)

Analisis Perubahan Undang-Undang Investasi Melalui Omnibus Law 2020 dan Dampaknya Terhadap Perijinan Investasi

Hubungan debitur dan kreditur dalam perjanjian utang piutang menimbulkan suatu perjanjian pinjam meminjam uang yang menyebabkan adanya suatu perikatan diantara para pihak. Dengan adanya perikatan maka masing-masing pihak mempunyai hak dan kewajiban. Salah satu kewajiban dari debitor adalah mengembalikan utangnya sebagai suatu prestasi yang harus dilakukan. Perjanjian utang piutang bukanlah menjadi suatu masalah dalam dunia usaha bila antara debitur dan kreditur terdapat konsep pemahaman dalam isi perjanjian dan debitur tetap mampu untuk melakukan pembayaran utang. Permasalahan baru timbul apabila debitur tidak cukup efisien dalam menjalankan roda perusahaan dikarenakan krisis financial dan mengalami kebangkrutan atau yang disebut dengan pailit. Oleh karena itu, bagaimana persamaan dan perbedaan perdamaian menurut Undang-Undang Kepailitan dengan Reorganization Plan menurut Chapter 11 United State Bankruptcy code serta Penerapan Reorganization Plan berdasarkan Chapter 11 United State Bankruptcy menjadi rumusan dalam penelitian ini. Berdasarkan pendapat dari Lawrence terdapat tiga komponen yang menjadi dasar perbedaan hukum antara lain; sistem hukum, subtansi hukum, budaya hukum. Adapun metode penelitian yang digunakan dalam penelitian dengan pendekatan perundang-undangan. Pendekatan ini dilakukan dengan menelah semua peraturan perundang-undangan yang berkaitan dengan isu hukum yang akan diteliti. penelitian ini menggunakan data sekunder dengan mengumpulkan data-data berupa peraturan hukum kepailitan dan Chapter 11 serta Chapter 7. Setelah itu, penulis melakukan analisis data. Sehingga menemukan hasil yaitu; terdapat perbedaan sistem hukum Indonesia Undang-Undang Nomor 37 Tahun 2004 tentang Kepailian dan penundaan Kewajiban Pembayran Utang berbeda dengan Chapter 11 Reorganization Plan US Bankrupty Code. Persamann dan perbedaan didasarkan pada adanya sistem hukum yang berbeda Chapter yang menjelaskan tentang Reorganisasi Plan yang pada umumnya disebut sebagai reorganisasi kedua negara menentukan pihak ketiga yang ikut menyelesaikan permasalah yaitu Amerika disebut dengan Trustee dan Indonesia disebut dengan kurator. Penerapan reorganisasi Plan di Amerika Serikat Dalam Chapter 11 yang menjelaskan tentang Reorganisasi Plan yang pada umumnya perusahan yang mengalami kesulitan keuangan memberikan suatu petisi (Petition), (Protection), (Proceeding) yang menjadi tahap-tahap pengajuan permohonan, perlindungan hukum diberikan terhadap pihak yang harus menerimanya serta proses dan ketentuan yang berlaku bagi kreditor dan debitor dalam menyelesaiakan permasalahan utang

India’s ‘bad’ bank brings risks and opportunities

Significance This ‘bad’ bank, an asset reconstruction company, will work in tandem with a debt resolution firm. It will be partially backed by government guarantees. Impacts Resolution professionals, seen as possessing special skills, will play a key role in the workings of the new debt resolution firm. India will rely less on its 2016 Insolvency and Bankruptcy Code to tackle non-performing loans. The government will count on PSB mergers to moderate competition and reap economies of scale in the banking sector.

Critical Perspectives to Non-performing Assets of Indian Banks, Shrinking Balance Sheet, Challenges and Way Ahead

Indian banking sector is facing the problem of rising bad loans as gross non-performing assets (GNPA) of Indian banks is on continuous rise. The present study is an attempt to analyse rising bad loans scenario of Indian banks, various factors that contributes to non-performing assets (NPA), along with the present state of Indian banks. This study found that poor recovery measures, lack of proper credit and risk management system at bank level, wilful default by borrowers, lack of stringent regulation, poor level of corporate governance and misuse of funds by borrowers are the key factors behind the rising level of bad loans of Indian banks. It was found that public sector banks (PSB) are suffering the most from rising level of NPA, high rate of NPA of banks have adverse impact on banks’ balance sheets, their assets quality, increased provisioning coverage ratio of banks and low return on assets. Although various concerned stakeholders have taken numerous measures to curb the situation, such as recapitalization of PSB, construction of assets reconstruction companies (ARC), Debt Recovery Tribunals for speedy recovery of bad loans and enactment of insolvency and bankruptcy code (IBC),still there is much more to do, and have a huge scope to bring reforms in banking sector, especially in PSB of India.

Performance Analysis and Liquidation Preference under Insolvency and Bankruptcy Code in India

The Insolvency and Bankruptcy Code (2016) was introduced with the main objective of maximization of value of assets and revival of stressed assets. The paper analyses the performance of the Insolvency and Bankruptcy Code (IBC) 2016 on various parameters since its inception. The paper emphasises the fact that in order to achieve the timeline whether the code is favouring liquidation over resolution. The paper is qualitative in nature analyzing the performance of the IBC on various parameters. The study finds out that the code has given positive results on the resolution of insolvency of 12 major NPA accounts as compared to other previous schemes but in order to prove its efficacy it has somewhere missed its major objective of resolution of stressed assets, which is its primary objective, and favored liquidation. The paper will give an overview of the performance of the code which is a gap in literature as it is a new code in Indian insolvency regime.

Gugurnya Hak Menuntut Terhadap Korporasi Akibat Pailit

Prosecution is basically an action by the public prosecutor to delegate a criminal case to the competent District Court so that it is examined and decided by a judge in a court session. With regard to prosecution, Article 109 of the Criminal Procedure Code states that there are 3 reasons for stopping prosecution, namely that an event is not a criminal act, there is not enough evidence collected by investigators to prove the fulfillment of the elements in a criminal act and for the sake of law. The Criminal Code, First, with regard to the application of the principle of ne bis in idem. Second, if the Defendant dies, Third, Expires, Fourth, Settlement outside the court, Article 82 of the Criminal Code has described if an offense is threatened with a fine only, then prosecution can be avoided by paying the maximum fine directly. Against corporations, prosecution is limited by a number of provisions, in this case also including when the corporation is bankrupt. That as a result, if the entire corporate assets are included in the bankruptcy code, there will be a transfer of corporate licenses and an impact on the liquidation process. Thus, based on the provisions of Article 142 paragraph (1) of Law no. 40 of 2007 concerning Limited Liability Companies, the corporation is dissolved. Thus, the prosecution of the bankrupt corporation can be dropped.

THE HEALTHY INTEGRATION: MODERN ECONOMICS AND CHANAKYA’S ARTHASASHTRA

Economic Evolution is a gradual process. It takes ages to develop and convert any country into meaningful and sustainable growth engines. The Indian Economy is no exception to this evolutionary process. In spite of the successful completion of the Five-Year Plans from 1951 to the Twelfth Five-year plan ( 2012-2017) , Indian Economy has still been reeling with challenges like Population Growth, Crumbling Infrastructure, Terrorism, Corruption, Inadequate Taxation and Unemployment. However, there is a shift in the economy post Liberalization. Since 1991, the economy has been transformed from a closely held inward looking economy to a driving force of global growth. Recently there has been a concentrated effort to reform the cobweb of taxes across the Indian Economy which is reflected in the Constitutional Amendment Bill for GST and its implementation, Demonetization of High Denomination Bank Notes, enactment of Insolvency and Bankruptcy Code, enactment of Aadhaar Bill for disbursement of financial subsidies and benefits. There has been an overall complex- security development matrix in India. The sudden economic upheavals intrigue one to think if there exists any root or connection of the various economic strategies and their origin in India, or they are simply borrowed from the western economic theories. Arthashastra, by Chanakya, being a very famous Indian treatise on politics, economics, military strategy, state function and social organization of ancient India, an attempt is made to relate the contemporary economic scenario with those mentioned in the Arthashastra. The paper shall try to reflect the connectivity of various functional roots from Kautilya to kalyug.

CIRP RE-ENGINEERING AND RE-STRUCTURING UNDER INSOLVENCY AND BANKRUPTCY REFORMS

Introduction. This article discusses the theory of corporate restructuring and its importance in the country. Business restructuring is the redesigning of existing business strategies and aspects for various reasons. Usually a corporate’s varied challenges and financial adjustments to its assets and liabilities necessitates this process. It analyses how the different avenues of business restructuring exercises such as mergers, acquisitions, amalgamations, compromises, and arrangement are processed with in respect to the process provided under the Insolvency and Bankruptcy Code 2016. Introduction followed by brief Literature Review. Research methods are exploratory in nature, since the study has to explore the impact of IBC on Indian Economy. Results and discussions.

The bankruptcy law of Saudi Arabia: policy, operation and comparison

Purpose The purpose of the paper is to analyze the new Bankruptcy Law in Saudi Arabia (KSA Bankruptcy Law) under both a comparative lens and a policy-oriented one, while highlighting some of the most essential operational steps and procedures in a bankruptcy proceeding under the law. Design/methodology/approach The approach adopted analyzes the specific mechanics and procedures of a bankruptcy law under the general policies and goals of bankruptcy. Additionally, where appropriate, a brief comparison to the US Bankruptcy code and its provisions is presented to provide an alternative approach on how similar issues are handled under a reputable and proven bankruptcy system. Findings Overall, the KSA Bankruptcy Law is a major accomplishment and advancement to the Kingdom’s insolvency regime. The law consolidated and codified the laws governing bankruptcy under the Kingdom’s prior regime, and followed the structure of a modern bankruptcy regime. In doing so, several of the law’s policies and objectives have been fulfilled by providing an effective, predictable and reliable bankruptcy system. Originality/value Given the relatively recent adoption of the KSA Bankruptcy Law, the paper provides a comprehensive assessment of the law’s operation and its effectiveness in achieving its policy goals as a modern bankruptcy law.

Settlements and Resolutions Under the Insolvency and Bankruptcy Code: Assessing the Impact of Covid-19

In this study, we develop a model to examine the dynamics of the insolvency and bankruptcy code (IBC) processes in the aftermath of Covid-19. We use the model to study the impact of the pandemic on the following aspects of the financial disputes and their implications: number of disputes between debtors and their creditors in the aftermath of Covid-19; frequency of these disputes coming to the National Company Law Tribunal (NCLT); impact of the pandemic on the frequency of ‘out of court’ settlements; the nature of disputes settled amicably and those adjudicated under the corporate insolvency resolution process of the NCLT; and the recovery rates in the settled versus litigated disputes. We show that while the number of disputes will go up, the frequency of settlements will come down in the post-Covid world. Moreover, the post-pandemic legal changes made to the IBC are detrimental to the interest of the micro, small and medium enterprises and also for the formal and informal sector employees. We offer suggestions for promoting out-of-court settlements to save time and costs of the parties involved. Our suggestions related to public policy can help mitigate the macroeconomic costs of the pandemic. JEL Classification Codes: K00, K22, K41, G21