[Published by Taxmann Group of Publications in June 2019 Issue]
1. The Insolvency & Bankruptcy Code, 2016 (IBC) has been in operation for more than 2 years now. It changed the scenario of debt recovery and the concept from "debtor-controlled company management" to the "creditors-controlled company management." This paradigm shift has been possible, inter alia, due to the positive interpretation of the provisions of the IBC by the Hon'ble Supreme Court of India and by the National Company Law Appellate Tribunal (NCLAT). This has made it possible to deal with many intricate legal issues which basically attempted to create roadblocks in the working of the IBC.
In this article, an attempt has been made to highlight some of the excerpts of important/notable judgments of the Hon'ble Supreme Court of India, as also the judgments passed by the NCLAT on the interpretation of the provisions of the IBC.
Role of National Company Law Tribunal (NCLT) to admit applications filed under section 7 or 9 of the IBC
2. As early as in 2017, the Hob'ble Supreme Court of India, in its judgment in the case of Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd.  85 taxmann.com 292/144 SCL 37 has observed that:-
"Once the adjudicating authority/tribunal is satisfied as to the existence of the default and has ensured that the application is complete and no disciplinary proceedings are pending against the proposed resolution professional, it shall admit the application. The adjudicating authority/Tribunal is not required to look into any other criteria for admission of the application."
In other words, an application under section 7 or section 9 of the IBC is acceptable so long as the debt is proved to be due and there has been an occurrence or existence of default. What is material is that the default is for at least Rs. 1 lakh. In view of section 4 of the IBC, the moment default is of Rs. 1 lakh or more, an application to trigger Corporate Insolvency Resolution Process (CIRP) under the IBC is maintainable. If the corporate debtor fails to show that there is no debt due or default in existence, he cannot avoid the provisions of the IBC.
Also, while interpreting the provisions of the IBC, the Adjudicating Authorities (AA) (i.e., the NCLT) has taken a persistent view that in financial transactions, adjustments and compromises are to be left to the parties to settle the matter in their best interest or exigencies of the business. However, in the absence of any binding compromise agreement/debt restructuring approval, it is beyond the powers of the AA to extend time indefinitely or to defer the prayer of the applicant-financial creditor/operational creditor for admission of the application u/s 7 or 9 of the IBC, as the case may be. The respective AAs/NCLTs have also taken a persistent view that time is the essence of the Code and that a far strict time frame is expected to be followed by the AA at every stage of the proceedings.
This strict line of enforcement of the provisions of the IBC has prompted many of the debtor companies to approach the financial creditor/operational creditor to work out a settlement and/or compromise so as to avoid being dragged to the NCLT under the provisions of the IBC. Such attempts are made not only prior to filing of the application under IBC, but even while the application is pending adjudication or even after the stage of admission of such application - to settle the matter to come out of rigour of the provisions of IBC which render the erstwhile Board of Directors of the debtor-company powerless as the management of the company goes out of their hands.
Filing of Resolution Plan - How defaulters/related persons are prevented from bidding - Supreme Court's judgment interpreting section 29A of the IBC
3. Broadly speaking, once the debtor-company goes out of the hands of the erstwhile defaulting promoters/management and the working of the company is managed by the Committee of Creditors (CoC) with the help of the appointed Resolution Professional (RP), in order to complete the CIRP within the stipulated maximum 180 days (extendable by another 90 days), bids are invited from interested parties to submit their Resolution Plans for the revival/rehabilitation of the debtor-company and stricter norms are adopted to evaluate such bids. The provisions of section 29A of the IBC have been enacted so as to prevent the defaulter directors/promoters/related persons from bidding for the same company and section 29A does not even allow them to have backdoor entry via the clever device of bidding through entities projecting as 'Resolution Applicant'. One such interesting and important case relates to the debt ridden company, Essar Steel and how the matter reached the Hon'ble Supreme Court. The Hon'ble Supreme Court of India in its judgment dated 4th October, 2018, in the case of Arcelor Mittal (P.) Ltd. v. Satish Kumar Gupta  98 taxmann.com 99/150 SCL 354 (hereinafter, "Arcelor Mittal") dealt not only with the important issue regarding eligibility criteria of the resolution applicant under Section 29A of the IBC for bidding in the resolution plan of the debt-ridden company, but the said judgment also dealt with other important issues relating to interpretation of some of the provisions of the IBC.
It needs to be highlighted here that in order to prevent the erstwhile promoters of the debtor-company and the persons acting in concert with them, from bidding in the resolution application process, section 29A was introduced in the IBC, whereby many disqualifications were inserted to disentitle the resolution applicants to be persons connected with the promoters of the debtor-company. In the aforementioned Supreme Court's Arcelor Mittal (P.) Ltd. case (supra), the provision of section 29A of the IBC which came up for interpretation was the opening line of section 29A which read as below:
"A person shall not be eligible to submit a resolution plan, if such person, or any other person, acting jointly or in concert with such person…" (followed by the instances laid down in the various sub-clauses mentioned under section 29A).
The Hon'ble Supreme Court of India, in its aforesaid Arcelor Mittal (P.) Ltd.'s case (supra) judgment, while interpreting section 29A of the IBC held that:
"The opening lines of section 29A of the Amendment Act refer to a de facto as opposed to a de jure position of the persons mentioned therein. This is a typical instance of a "see through provision", so that one is able to arrive at persons who are actually in "control", whether jointly, or in concert, with other persons. A wooden, literal, interpretation would obviously not permit a tearing of the corporate veil when it comes to the "person" whose eligibility is to be gone into. However, a purposeful and contextual interpretation, such as is the felt necessity of interpretation of such a provision as section 29A, alone governs. For example, it is well-settled that a shareholder is a separate legal entity from the company in which he holds shares. This may be true generally speaking, but when it comes to a corporate vehicle that is set-up for the purpose of submission of a resolution plan, it is not only permissible but imperative for the competent authority to find out as to who are the constituent elements that make up such a company. In such cases, the principle laid down in Salomon v. A. Salomon and Co. Ltd.  AC 22 will not apply. For it is important to discover in such cases as to who are the real individuals or entities who are acting jointly or in concert, and who have set-up such a corporate vehicle for the purpose of submission of a resolution plan."
Supreme Court Allows Piercing of Corporate Veil in Analysing Section 29A of IBC
4. The Supreme Court pierced the corporate veil and analysed the complex structure of both the competing resolution applicants and held that "since section 29A(c) is a see through provision, great care must be taken to ensure that persons who are in charge of the corporate debtor for whom such resolution plan is made, do not come back in some other form to regain control of the company without first Paying off its debts."
Further, the Supreme Court held that it is important for the competent authority to see that persons who are otherwise ineligible and hit by sub-clause (c), do not wriggle out of the proviso to sub-clause (c) by other means, so as to avoid the consequences of the proviso. For this purpose, despite the fact that the relevant time for the ineligibility under sub-clause (c) to attach is the time of submission of the resolution plan, antecedent facts reasonably proximate to this point of time can always be seen to determine whether the persons referred to in section 29A are, in substance, seeking to avoid the consequences of the proviso to sub-clause (c) before submitting a resolution plan. If it is shown on facts that at a reasonably proximate point of time before submission of the resolution plan, the affairs of the persons referred to in section 29A are so arranged as to avoid paying off the debts of the non-performing assets concerned, such persons must be held to be ineligible to submit a resolution plan or otherwise both, the purpose of the first proviso to sub-section (c) of section 29A, as well as the larger objective sought to be achieved by the said clause in public interest, will be defeated.
Supreme Court holds that resolution applicant has no vested right that his resolution plan be considered
5. In the aforesaid Arcelor Mittal India (P.) Ltd.'s case (supra) judgment, the Hon'ble Supreme Court also examined the issue as to whether any challenge can be made at various stages of the CIRP, particularly when the RP, under section 30(2) of the IBC, rejects a resolution plan, at the threshold. The Supreme Court held that it is settled law that a statute is designed to be workable and the interpretation thereof should be designed to make it so workable. The Supreme Court further stated that "given the time limit referred to above and given the facts that the resolution applicant has no vested right that his resolution plan be considered, it is clear that no challenge can be preferred to the adjudicating authority at this stage. A writ petition under Article 226 filed before a High Court would also be turned down on the ground that no right, much less a fundamental right, is affected at this stage."
Role of the Resolution Professional (RP) vis-à-vis the Resolution Plans submitted to him
6. The Supreme Court further held that the RP is only to "examine" and "confirm" as to whether a resolution plan conforms to what is provided by section 30(2) and that under Section 25(2)(i) of the IBC, the RP shall undertake to present all resolution plans at the meetings of the COC and confirms whether all the prescribed statutory conditions have been followed by the Resolution Applicant, especially with regard to eligibility criteria enumerated under section 29A(c). It was further held by the Apex Court that a conspectus of all the relevant provisions would show that the RP is required to examine that the resolution plan submitted by various applicants is complete in all respects before submitting it to the COC and that section 30(2)(e) does not empower the RP to "decide" whether the resolution plan does or does not contravene the provisions of law. It would be in the fitness of things if he appends the due diligence report carried out by him with respect to each of the resolution plans under consideration and states briefly as to why it does, or does not conform to the law.
Supreme Court holds that IBC is not intended to be a substitute for a recovery forum
7. The Hon'ble Supreme Court's judgment dated 23-10-2018 in Transmission Corpn. of Andhra Pradesh Ltd. v. Equipment Conductors & Cables Ltd.  98 taxmann.com 375/150 SCL 447 spelled out clearly that "in a recent judgment of this Court in Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. (2018) 1 SCC 353 this Court has categorically laid down that IBC is not intended to be substitute to a recovery forum. It is also laid down that whenever there is existence of real dispute, the IBC provisions cannot be invoked." In its 23-10-2018 judgment, as aforesaid, the Supreme Court also referred, inter alia, to para 51 of its judgment in Mobilox Innovations (P.) Ltd.'s case (supra), which reads as under:--
"It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application u/s 9(5)(2)(d), if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicted above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application."
Furthermore, even in its judgment dated 25-1-2019, the Hon'ble Supreme Court of India in Swiss Ribbons (P.) Ltd. v. Union of India  152 SCL 365/101 taxmann.com 389 ('Swiss Ribbons'), with regard to the approach of the IBC, has observed, inter alia, that "the objective of the IBC is to ensure revival and continuation of the corporate debtor by protecting it from its own management and from liquidation and that the Code is a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors."
8. In the aforesaid Swiss Ribbons judgment, the Hon'ble Supreme Court, while upholding the constitutional validity of the IBC, has observed that "the IBC is a legislation which deals with economic matters and, in the larger sense deals with the economy of the country as a whole. Earlier experiments, in terms of legislations having failed, "trial" having led to repeated "errors", ultimately led to the enactment of the IBC. The experiment contained in the Code, judged by the generality of its provisions and not by so-called crudities and inequities that have been pointed out by the petitioners, passes constitutional muster. To stay experimentation in things economic is a grave responsibility, and denial of the right to experiment is fraught with serious consequences to the nation…In the working of the Code, the flow of financial resources to the commercial sector in India has increased exponentially as a result of financial debts being repaid. The experiment conducted in enacting the Code is proving to be largely successful. The defaulter's paradise is lost. In its place, the economy's rightful position has been regained."
DELEP GOSWAMI, FCS
Supreme Court of India
Supreme Court of India
June 19, 2019 106 taxmann.com 208 (Article) 204 Views
IBC Changes Debtor-Control to Creditor-Control
1. The enforcement of some of the important provisions of the Insolvency and Bankruptcy Code, 2016 ("IBC") has brought about a significant positive change in the way the lender banks and financial institutions and even the operational creditors used to recover their dues from the borrower-debtor-company ('Corporate Debtor' or 'CD'). In the earlier regime, the CD used to be in control and in charge of the management of the company even while the creditors chased them for recovery of the outstanding loans and dues, but under the IBC, as soon as the petition by the Financial Creditor (FC) or the Operational Creditor (OC) under section 7 or 9 of the IBC or even by the corporate debtor itself u/s. 10 of the IBC is admitted by the Adjudicating Authority (AA), i.e., the respective jurisdictional National Company Law Tribunals (NCLT) and the Interim Resolution Professional (IRP) is appointed, under Section 17 of the IBC, the management of the affairs of the CD vest in the IRP and the powers of the board of directors of the CD shall stand suspended and be exercised by the IRP. Further, the said Section 17 of the IBC mandates that the officers and managers of the CD shall report to the IRP and provide access to such documents and records of the CD as may be required by the IRP.
Supreme Court's judgment in Swiss Ribbons case-reiterates basic object of IBC to protect CD from erstwhile promoters and from Corporate death by Liquidation
2. In the recent judgment of the Hon'ble Supreme Court of India ("the Apex Court") in the case of Swiss, Ribbons (P.) Ltd. v. Union of India  152 SCL 365/101 taxmann.com 389 (SC), while upholding the constitutional validity of the IBC, the Apex Court observed that "the IBC is a legislation which deals with economic matters and, in the larger sense, deals with the economy of the country as a whole. Earlier experiments, in terms of legislations having failed, "trial" having led to repeated "errors", ultimately led to the enactment of the IBC. The experiment contained in the Code, judged by the generality of its provisions and not by so-called crudities and inequities that have been pointed out by the petitioners, passes constitutional muster. To stay experimentation in things economic is a grave responsibility, and denial of the right to experiment is fraught with serious consequences to the nation…In the working of the Code, the flow of financial resources to the commercial sector in India has increased exponentially as a result of financial debts being repaid. The experiment conducted in enacting the Code is proving to be largely successful. The defaulter's paradise is lost. In its place, the economy's rightful position has been regained."
In the context of the present article, one cannot ignore the loud and clear message sent by the Apex Court in the Swiss Ribbons case (supra) with regard to the approach of the IBC, wherein the Supreme Court has observed, inter-alia, that "the objective of the IBC is to ensure revival and continuation of the corporate debtor by protecting it from its own management and from liquidation and that the Code is a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors."The basic thrust of IBC is therefore revival and continuation of the CD by protecting it from its own management and from liquidation.
It is pertinent to note that the Apex Court in its judgment in Swiss Ribbons (supra) case observed as follows :-
"11. …What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort, if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going concern.
12. It can thus be seen that the primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting the corporate debtor from its own management and from a corporate death by liquidation. The Code is thus a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors. The interests of the corporate debtor have, therefore, been bifurcated and separated from that of its promoters/those who are in management. Thus, the resolution process is not adversarial to the corporate debtor but, in fact, protective of its interests. The moratorium imposed by Section 14 is in the interest of the corporate debtor itself, thereby preserving the assets of the corporate debtor during the resolution process. The timelines within which the resolution process is to take place again protects the corporate debtor's assets from further dilution, and also protects all its creditors and workers by seeing that the resolution process goes through as fast as possible so that another management can, through its entrepreneurial skills, resuscitate the corporate debtor to achieve all these ends."
In the absence of Revival scheme of CD – Liquidator can sell the assets of CD as a 'Going Concern'
3. Even though liquidation is not the objective of the IBC, yet under the provisions of the IBC, if a viable revival plan of the CD, known as "Resolution Plan" of the CD is not possible within the time frame of 270 days stipulated in IBC (initial 180 days plus extended 90 days period), the AA is left with no other option, but to order liquidation of the CD under Section 33(1) of IBC. In most of the cases, the Resolution Professional (RP) is entrusted with the task of liquidation as per the provisions of the IBC.
Further, the Hon'ble Supreme Court of India in Arcelor Mittal India (P.) Ltd. v. Satish Kumar Gupta  98 taxmann.com 99/150 SCL 354 at paragraph 83, footnote (3) has noted as follows:
"3. Regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 states that the liquidator may sell the corporate debtor as a going concern."
In this regard, the Apex Court analysed its judgment in Meghal Homes Pvt. Ltd. v. Shree Niwas Girni K.K. Samiti  78 SCL 482, wherein it observed and held as follows:
"33. The argument that Section 391 would not apply to a company which has already been ordered to be wound up, cannot be accepted in view of the language of Section 391(1) of the Act, which speaks of a company which is being wound up. If we substitute the definition in Section 390(a) of the Act, this would mean a company liable to be wound up and which is being wound up. It also does not appear to be necessary to restrict the scope of that provision considering the purpose for which it is enacted, namely, the revival of a company including a company that is liable to be wound up or is being wound up and normally, the attempt must be to ensure that rather than dissolving a company it is allowed to revive. Moreover, Section 391(1)(b) gives a right to the liquidator in the case of a company which is being wound up, to propose a compromise or arrangement with creditors and members indicating that the provision would apply even in a case where an order of winding up has been made and a liquidator had been appointed. Equally, it does not appear to be necessary to go elaborately into the question whether in the case of a company-in-liquidation, only the Official Liquidator could propose a compromise or arrangement with the creditors and members as contemplated by Section 391 of the Act or any of the contributories or creditors also can come forward with such an application."
NCLAT's Directions to the Liquidator Appointed under IBC
4. The National Company Law Appellate Tribunal (NCLAT) in its judgment in S.C. Sekaran v. Amit Gupta  103 taxmann.com 222/152 SCL 536 (NCLAT) went on to state that Section 391 of the Companies Act, 1956 has been replaced by Section 230 of the Companies Act, 2013 (CA 2013) which talks of "power to compromise or make arrangements with creditors and members" and analysed in detail the elaborate provisions of Section 230 of the CA, 2013. In the aforesaid S.C. Sekaran case (supra), the NCLAT directed the liquidator to proceed in accordance with law, to verify claims of all creditors, take into custody and control the assets, property, effects and actionable claims of the CD; carry on the business of the CD for its beneficial liquidation, etc., as prescribed under Section 35 of the IBC. The NCLAT also directed that the liquidator will have access to information under Section 33 of the IBC and will consolidate the claim under Section 38 and after verification of claim in terms of Section 39, will either admit or reject the claim as required under Section 40 of the IBC. The NCLAT further directed that before taking steps to sell the assets of the CD, the liquidator will take steps in terms of Section 230 of the CA, 2013 and that the AA, if so required, will pass appropriate orders. Only on failure of revival, the AA and the liquidator will first proceed with sale of the company's assets wholly and thereafter, if not possible, to sell the company in part in accordance with law.
In another judgment, in Ajay Agarwal v. Ashok Magnetic Ltd., company Appeal (AT) (Insolvency) Nos.792 & 793 of 2018, dated 22-2-2019 (NCLAT) while reiterating its judgment in S.C. Sekaran (supra), held that even during the period of liquidation, the liquidator should ensure that the debtor-company should remain as a going concern and take steps in terms of Section 230 of the C.A., 2013 and can consider compromise, arrangements and amalgamation between the company and its members or any class of them in terms of Section 230(1)(b) of the C.A., 2013. The NCLAT also observed that it will be open to the members of the debtor-company (in this case M/s. Ashok Magnetics Ltd.) or the creditors, to contact the liquidator for compromise or arrangements in terms of Section 230 of the C.A., 2013 and if the scheme is viable, feasible and maximizes the assets of the CD and the balance of interest of the creditors, then the liquidator will move an application under Section 230 of the C.A., 2013 before the NCLT for order and directions. On failure, the liquidator will ensure to sell the CD as a going concern in its totality, taking into consideration the interests of the employees of the corporate debtor.
NCLAT: At Liquidation Stage, Liquidator may consider Scheme of Compromise or Arrangement with Creditors
5. In a recent judgment dated 27.02.2019, in Y. Shivram Prasad v. S. Dhanapal  153 SCL 294/104 taxmann.com 377 (NCLAT), the NCLAT reiterated that during the liquidation stage, the liquidator is required to take steps to ensure that the company remains a going concern and that steps are required to be taken for revival and continuance of the corporate debtor by protecting the corporate debtor and its management from death by liquidation. Thus, the steps which are required to be taken, are by compromise and arrangement with the creditors or class of creditors or members or class of members in terms of Section 230 of the C.A., 2013 and on failure, the liquidator is required to take steps to sell the business of the corporate debtor as a going concern in its totality, along with the employees. The last stage will be death of the corporate debtor by liquidation, which should be avoided. The NCLAT directed that a total 90 days' time is allowed to take steps under Section 230 of the C.A., 2013. In case for any reason, the liquidation process under Section 230 takes more time, it is open to the NCLT to extend the period, if there is a chance for approval of arrangement of the scheme.
In the aforesaid NCL-AT judgment in Y. Shivram Prasad (supra), on the question of how to deal with objections to the scheme and to examine the viability of the scheme of compromise and arrangement, the NCL-AT passed the following direction:
"18. During proceeding under Section 230, if any, objection is raised, it is open to the Adjudicating Authority (National Company Law Tribunal) which has power to pass order under Section 230 to overrule the objections, if the arrangement and scheme is beneficial for revival of the 'Corporate Debtor' (Company). While passing such order, the Adjudicating Authority is to play dual role, one as the Adjudicating Authority in the matter of liquidation and other as a Tribunal for passing order under Section 230 of the Companies Act, 2013. As the liquidation so taken up under the 'I&B Code', the arrangement of scheme should be in consonance with the statement and object of the 'I&B Code', meaning thereby, the scheme must ensure maximisation of the assets of the 'Corporate Debtor' and balance the stakeholders such as, the 'Financial Creditors', 'Operational Creditors', 'Secured Creditors' and 'Unsecured Creditors' without any discrimination. Before approval of an arrangement or Scheme, the Adjudicating Authority (National Company Law Tribunal) should follow the same principle and should allow the 'Liquidator' to constitute a 'Committee of Creditors' for its opinion to find out whether the arrangement of Scheme is viable, feasible and having appropriate financial matrix. It will be open for the Adjudicating Authority as a Tribunal to approve the arrangement or Scheme in spite of some irrelevant objections as may be raised by one or other creditor or member keeping in mind the object of the Insolvency and Bankruptcy Code, 2016.
19. In view of the observations aforesaid, we hold that the liquidator is required to act in terms of the aforesaid directions of the Appellate Tribunal and take steps under Section 230 of the Companies Act. If the members or the 'Corporate Debtor' or the 'creditors' or a class of creditors like 'Financial Creditor' or 'Operational Creditor' approach the company through the liquidator for compromise or arrangement by making proposal of payment to all the creditor(s), the Liquidator on behalf of the company will move an application under Section 230 of the Companies Act, 2013 before the Adjudicating Authority, i.e., National Company Law Tribunal in terms of the observations as made in above. On failure, as observed above, steps should be taken for outright sale of the 'Corporate Debtor' so as to enable the employees to continue."
6. Even though the aforesaid judgments give directions to the liquidator to apply the provisions of Section 230 of the Companies Act, 2013 for the scheme of compromise or arrangement, yet a closer reading of the aforesaid judgment also make it clear that, in doing so, the liquidator will have to follow and observe the mandate of the IBC. In Section 29A of the IBC, the promoters of the CD as well as the persons acting in concert with them, or related parties as defined under IBC, are ineligible to submit any resolution plan in respect of the CD under the provisions of IBC. The Supreme Court in Arcelor Mittal (supra) has observed that the CD is to be protected from the erstwhile management of the CD who have defaulted in repaying the outstanding dues to the banks and financial institutions and to the operational creditors. In such a scenario, can such promoters or their related companies acting in concert, make a back-door entry into the corporate-debtor company via the route of Section 230 of the C.A., 2013 to take hold of the CD by making arrangements or compromising with the creditors. It is worthwhile to note that for approving the resolution plan, under IBC it requires 66% voting by committee of creditors in favour whereas Section 230 of the C.A., 2013 mandates approval by scheme by shareholders and creditors representing 75% of the shareholding/debt owed, which is more rigorous and cumbersome. How all these contradictory factors will be reconciled by the Liquidator is an interesting issue on which a clear cut Court direction is awaited, but it seems that the existing promoters of the CD have no direct role while liquidation under IBC is under process. It appears that the Insolvency and Bankruptcy Board of India (IBBI) is amending the appropriate rules for liquidation of companies under IBC and what measures it takes will be an interesting issue.