Insolvency Law: Two Landmark Rulings By Supreme Court: ELP Analysis
The rulings clarify the issue of rights and powers of statutory bodies to confiscate assets of corporate debtor.
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In this update, we analyse two landmark judgments delivered by the apex court on August 26, 2022 in the matter of CIRP/Liquidation of ABG Shipyard and Welspun Steel Resources Pvt Ltd.
Key points to note here are:
IBC Prevails over the Provisions of Custom Act
Customs cannot claim title over the goods and issue notice to sell the goods in terms of the Custom Act when the liquidation process has been initiated
The Appellate Authority cannot don the mantle of a supervisory authority for overseeing the validity of the approach of the liquidator in opting for a particular mode of sale of the assets of the corporate debtor
These landmark judgments bring much needed clarity on the issue of rights and powers of statutory bodies to confiscate/sell assets of corporate debtor undergoing corporate resolution or liquidation process under the provisions of the Insolvency and Bankruptcy Code, 2016.
The Judgments also empower liquidators and the stakeholders committee to take commercial decisions with regards to realisation of the liquidation estate of the corporate debtor within the framework of the code. This will pave the way for faster realisation of assets and conclusion of liquidation process.
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