Insolvency Lawyers in Delhi
(Recovery Of Financial And Operational Debt In Delhi Through Insolvency)
- Drafting of Insolvency Petition
- Filing of your matter with NCLT, Delhi
- Appearances by the Advocates and pleadings for the same
- Final Order from NCLT
- Recovery of Financial and Operational debt from the Debtors
In Delhi there are lakhs of aggrieved persons viz Financial and Operational Creditors whose payment is pending from the Debtors, Financial Institutions and real-estate agencies. Being a Creditor, if in spite of all your efforts, you have been unsuccessful in recovery of dues, contact us to help you swiftly recover it through legal channels as we have the best team of Insolvency Lawyers in Delhi.
The government of India has enacted the Insolvency and Bankruptcy Code, 2016, (IBC), an effective law that is creditor driven, time-bound, with the ability of effective restructuring of assets.
Our team of highly experienced Insolvency Lawyers in Delhi is well conversed with the intricacies of IBC and has assisted many distressed Creditors in successful recovery of their unpaid debt.
Insolvency Lawyers in Delhi – Recovery Of Debt Services That We Offer In Delhi
- Initiation of Corporate Insolvency Resolution Process by Financial Creditor: Section 7 of IBC
- Application for initiation of corporate insolvency resolution process by Operational Creditor: Section 9 of IBC.
- Summary Suit (Order 37 of the Code of Civil Procedure Code, 1908)
- Section 138 of the Negotiable Instruments Act, 1881 (Cheque Bounce cases)
Our Insolvency Lawyers in Delhi provide comprehensive legal support in matters related to recovery of bad loans, from initiating the process to the conclusive closure, bringing relief to the Creditor.
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:
- A default has occurred and the application under sub-section (2) is complete, and there are no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application; or
- Default has not occurred or the application under sub-section (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may by order, reject such application.
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,
- The application made under sub-section (2) is complete.
- There is no repayment of the unpaid operational debt.
- The invoice or notice for payment to the corporate debtor has been delivered by the operational creditor.
- No notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and
- There are no disciplinary proceedings pending against any resolution professional proposed under sub-section (4).
II) Reject the Application and communicate such decision to the operational creditor and the corporate debtor 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.
- Notice of dispute has been received by the operational creditor or there is a record in the information utility.
- Any disciplinary proceeding is pending against any proposed resolution professional.
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:
- On a Written Contract,
- On an Enactment, where the sum sought to be recovered is a fixed sum of money or in the nature of the debt other than a penalty; or
- On a guarantee, where the claim against the principal is in respect of a debt or liquidated demand only.
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.
- Demand Notice (form 3 and form 4 – IBBI Rules)
- Company’s Ledger Account
- Copy of the Invoices showing proof of transactions between the two parties
- Bank Statements of the Operational/ Financial Creditor
- Affidavit by the Operational creditor Section 9 (3) (b) –IBBI Rules
- Acknowledgement of Transaction between 2 parties
- Copy of the Emails exchanged between 2 parties
- Copy of the Legal Notice served by the Operational/ Financial Creditor
- Affidavit – Bank Certificate – (Section 9 of IBBI Rules) (not mandatory)
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. |
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.
A time period of 10 days is given to the Debtors to settle/pay the disputed amount. When the debtors are unable to pay the disputed amount to the Creditors viz Traders, Employees or Manufacturers, then the Insolvency Petition against the above said persons are filed in the respective NCLT in the state having jurisdiction over the matter under Section 9 of the IBC, 2016.
Also, no demand notice is served to the opposite party before filing the petition as a financial creditor under Section 7 of the Insolvency and Bankruptcy Code, 2018.
The Court Fees in case of Financial Creditor filing the Insolvency Petition is Rs. 25,000 (which is mandatory) and in case of Operational Creditor it is Rs. 2,000.
The Minimum Amount of debt in which an Operational/Financial Creditor can approach the NCLT under IBC, 2016 is Rs. 1,00,000.
The Limitation Period is of 3 years from the date when the debt has become due/payable from the debtor to either the Financial Creditor or the Operational Creditor. Also, in the matter of B.K Educational Services vs Parag Gupta and Associates, 2017, it has been held that the Limitation Act, 1963 will apply to applications made under Section 7 and Section 9 of IBC, 2016. It has been clarified through this Judgement that IBC proceedings cannot be initiated based on time-barred claims.
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