Insolvency Lawyers In India
( Recovery Of Financial And Operational Debt Through Insolvency In India)
- Drafting of Insolvency Petition
- Filing of your matter with NCLT
- Appearances by the Advocates and pleadings for the same
- Final Order from NCLT
- Recovery of Financial and Operational debt from the Debtors
India is a vast country with a huge population and there are many individuals and entities who are forced to endure suffering due to pending payments or loans that they owe to debtors. Despite of all their sincere efforts they are not able to recover the due amount, causing financial loss as well as mental agony. There are hundreds of firms that offer services of insolvency lawyers in India for recovery of bad loans through insolvency, especially if the amount is owed by a corporate entity.
If you are one of such aggrieved persons, frustrated by overdue debts and looking for recovery of your debt, then your time for chasing or running after debtors is over!
Please note that we possess the best team of insolvency lawyers in India and with tons of experience behind us, we are greatly advantaged to cater to a gamut of national and global clients, both financial or operational creditors.
It is imperative to know that the newly implemented Insolvency and Bankruptcy Code, 2016 (IBC) is an effective law that is creditor driven, time-bound, and with the ability of effective restructuring of assets.
MUDS consultancy firm has been established with the mission to simplify legal & regulatory complexities with ethical dedication. it has helped 160+ Creditors to recover their debts in the shortest time with our team of most efficient insolvency lawyers in India, who understand the intricacies of IBC, 2016 completely.
Recovery Of Debt Services That We Offer Pan India:
● 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 team of insolvency lawyers in India, with their steadfast commitment & professional fairness, has led to forging a long-lasting relationship with our satisfied clients. They extend support through the entire process, 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) 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
(b) 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. |
All Operational and Financial Creditors, secured and unsecured, can initiate Insolvency under IBC, 2016. The minimum default amount should be one lakh or 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.
Yes, the court fee varies in both cases, in the case of Financial Creditor filing the Insolvency Petition it is Rs. 25,000 and in case of Operational Creditor it is Rs. 2,000.
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.
NCLT can reject the application if it is incomplete or there has been repayment of the unpaid operational debt. Also, if the Creditor has not delivered the invoice or notice for payment to the corporate debtor or any disciplinary proceeding is pending against any proposed resolution professional, the application shall face rejection.
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