Insolvency Professionals In India
Recovery Of Financial And Operational Debt In India Through Insolvency
India’s economic growth in the last few years has been remarkable! Globalization has ushered in a regime where the economy has opened up for international players, but at the same time, unrecovered debts or bad debts is a big cause of concern. Are you one of such people or entity who are looking for capable insolvency professionals in India to recover overdue debts?
When it comes to reclaiming your money from a debtor, it turns into a herculean task if the debtor evades or dodges you. If the defaulter is a corporate debtor who owes you more than one lakh rupees, then there are ways to take help from insolvency professionals in India in dealing with such wrongdoers.
If you are a financial creditor or even an operational creditor, the Insolvency and Bankruptcy Code, 2016, (IBC), is a tool which has been worked out to overcome the perils of bad debt. We have a highly qualified and committed team of insolvency professionals in India which thoroughly understands the nuances of the IBC and works to expedite the entire process effectively.
Our steadfast commitment, professional fairness, and ethical accountability have richly rewarded us and today we can proudly boast of assisting more than 90 clients in successfully recovering their debts. We have a pan India presence, providing us the advantage of catering to entities from all corners of the country.
Recovery Of Debt Services That We Offer In India:
Our proficient team of insolvency professionals in India extends complete legal support in overcoming the problem of bad debt, bringing much-needed relief to the Creditor. The newly adopted Code offers a uniform and comprehensive insolvency legislation encompassing all companies, partnerships and individuals (other than financial firms). Taking professional help of best firm is essential otherwise you may land into more complexities, for example, if the application is not filled properly, it may get rejected. Reapplying will result in waste of time and money.
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.
Documents Required For Recovery Of Financial And Operational Debt Through Insolvency
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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Banks, Financial Institutions, Homebuyers, Enterprise, Corporate Entity or Company, etc. fall in the category of Financial Creditors and can approach under Section 7 of the Insolvency and Bankruptcy Code, 2016 for recovery of overdue debt. Whereas, Manufacturers, Traders, Employees etc. are called Operational Creditors and they
can approach under Section 9 of the Insolvency and Bankruptcy Code, 2016 for recovery of debt.
The Adjudicating authority is NCLT but those cases where the party is dissatisfied by the action of NCLT, they can approach NCLAT.
Rejection of an application can take place 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.
IBC mandates that amount of rupees one lakh or more shall make you eligible to initiate action against a Corporate Debtor.
The Insolvency Resolution Professional has a vital role to play as he is duty bound to:
- Monitor the assets that belong to the Debtor,
- Assess the claims made against the Corporate entity, and
- Constitute a Committee of Creditors.
