Bankruptcy Professionals In India
Recovery Of Financial And Operational Debt In India Through Insolvency
India’s recent economic growth has taken the world by surprise and so because it has become the sixth largest economy, going by the GDP. It has been applauded to be the fastest expanding economy among the growing economies and has witnessed marvelous growth in all sectors. Lot of credit for this goes to the government which has sincerely taken up liberalization of the regulatory framework. This ease of regulations motivated many entities, big and small, to venture into the Indian market and make the most of it.
But managing and running a business is not a child’s play, it needs multiple factors to be taken into consideration. Any error in planning or strategies, or any miscalculation of expenses or inadequate liquidity or even external factors like slump in the market, etc. can create disastrous impact. So many a times, it happens that companies and firms face a situation where they reach a point of no return and need to wind up.
If your company has become insolvent, that is, unable to meet financial obligations, then you as a creditor can initiate liquidation under the Insolvency and Bankruptcy Code, 2016 (IBC). On the other hand, if your company is solvent, then as a member you can go for voluntary winding up.
Under any circumstance you will need legal assistance to execute the entire process successfully and get the desired result. Comprehending the legal language and regulations is an arduous task which is beyond the capabilities of the common man.
MUDS is a consulting firm par excellence and we have the best team of bankruptcy professionals in India. We extend unwavering support to companies, businesses and individuals that want assistance in insolvency, bankruptcy or liquidation.
Our team of highly accomplished bankruptcy professionals in India are adept in Insolvency and Bankruptcy Code, 2016, and this is the main reason for us being one of the most sought-after consulting firms in India.
Recovery Of Debt Services That We Offer In India:
Our team of bankruptcy professionals in India is unmatched and it has an impeccable track record with 160+ successfully completed cases and another 50 in the pipeline. We lay great emphasis on professional and ethical accountability of each one of our employees, and along with it earnest devotion, honest dedication and ardent professionalism.
Eligibility Criteria To File Recovery Of Debt Cases:
1. In case of initiation of Corporate Insolvency Resolution Process by Financial Creditor, it should owe the financial debt and the debt should be legally assigned to him and transferred. The Term “Financial Creditor” includes Banks, Financial Institutions, Homebuyers, Enterprise, Corporate Entity or Company (Section 7 of the IBC).
According to Sub-section (1) of the Act, the Financial Creditor either by itself or jointly with other financial creditors may file an application for initiating the Corporate Insolvency Resolution Process against a corporate debtor when a default has occurred.
The Adjudicating Authority shall within 14 days of the receipt of the application under sub-section (2), ascertain the existence of the default from the records of the information utility or on the basis of the evidence furnished by the financial creditor under sub-section (3).
Also, where the Adjudicating authority is satisfied that:
2. In case of initiation of Corporate Insolvency Resolution Process by the Operational Creditor, the Operational Creditor should owe the financial debt and the debt should be legally assigned to him and transferred. The term “Operational Creditor” includes Manufacturers, Traders, Employees (Section 9 of the IBC).
After the expiry of the period of 10 days from the date of delivery of the notice or the invoice demanding payment under (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or the dispute under sub-section (2) of section 8, the operational creditor may file an application before the adjudicating authority for initiating the CIRP process.
The Adjudicating authority shall within 14 days of the receipt of the application under sub-section (2), by an order:
I) Admit the application and communicate such decision to the operational creditor and corporate debtor if,
II) Reject the Application and communicate such decision to the operational creditor and the corporate debtor if,
3. In case of the Summary Suit under Order 37 of the Code of Civil Procedure, 1908, the Creditor shall file the Summary Suit in the respective courts having jurisdiction if there is a suit upon Bills of Exchange, Hundis and Promissory Notes.
Suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the defendant, with or without interest, arising:
4. Section 138 of the Negotiable Instruments Act, 1881 (Cheque Bounce Recovery Case): If the customer delays the payment through cheque then the seller can file a suit against the customer under Section 138 of the Negotiable Instruments Act, 1881.
Under Section 138, a legal notice is sent to the customer regarding the bouncing of the cheque and if he does not pay within 30 days, then the seller can file a suit against the customer under Section 138 of the NI Act regarding non-payment of the payment.
The brief description of the procedure of insolvency is enough to give you an insight into the legal entanglements that it carries. It is essential for you to make a wise choice as you should be aware that not all firms are competent in it. Any amateur firm that has a team of inexperienced bankruptcy professionals in India, may lead you to another hurdle or crisis, instead of bringing relief.
We are a legal firm, which has professionals with extensive experience in the matter, and therefore, are the best bet. We shall expedite the entire process, follow it continuously and keep you updated. Take an informed decision and overcome your hurdles by contacting us!
A Comparative Chart Of All Options
| Comparison Basis | Section 7 of IBC | Section 9 of IBC | Summary Suit (Order 37 of Cpc, 1908) | Section 138 of NI Act, 1881 |
|---|---|---|---|---|
| Claim Amount | Minimum Amount is Rs. 1 lac | Minimum Amount is Rs. 1 lac | It is prescribed as per the Code of Civil Procedure, 1908. | It is prescribed as per the NI Act, 1881. |
| Limitation Period | It is 3 years from the date when the debt has become due. | It is 3 years from the date when the debt has become due. | The limitation is prescribed as per the | 45 days is the time period for filing the case in the Concerned Court when the cheque has been bounced. |
| Total time-frame | 6 months (Approx.) | 6 months (Approx.) | 3-4 months (Approx.) | 6 months- 1 year (It can vary) |
| Type of Persons availing the Services | Homebuyers, Financial Institutions, Banks etc. (They all are termed as Financial Creditors) | Employees, Traders, Manfacturers (They all are termed as Financial Creditors) | Manfacturers, Traders, Buisnessmen and any other person dealing in goods and services. | Any person whose cheque has been bounced by the Bank due to insufficient funds on payment by the debtor. |
| Court Fees to be Paid | Rs. 25,000 | Rs. 2,000 | It is prescribed as per the Amount of claim. | It is prescribed as per the Amount of claim. |
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- All Operational and Financial Creditors, secured and unsecured, can initiate Insolvency under IBC, 2016, if the minimum default amount is one lakh and above. Banks, Financial Institutions, Homebuyers, Enterprise, Corporate Entity or Company can approach under Section 7 of the Insolvency and Bankruptcy Code, 2016 for recovery of Money. And Manufacturers, Traders, Employees etc. can approach under Section 9 of the Insolvency and Bankruptcy Code, 2016 for recovery of Money.
According to Section 3 (11) of IBC, ‘debt’ refers to any amount or obligation which is due from anyone; it includes financial as well as operational debt.
NCLT, can reject the application under these circumstances, if:
- The application made under sub-section (2) is incomplete.
- There has been repayment of the unpaid operational debt.
- The Creditor has not delivered the invoice or notice for payment to the corporate debtor.
- Any disciplinary proceeding is pending against the proposed resolution professional.
The Financial Creditor or the Operational Creditor, initiating action under Section 7 and Section 9 of the Insolvency and Bankruptcy Code, 2016, need to act within three years from when the debt had become due or payable.
