• UGI USER
  • Jun 05, 2024
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“NCLT REJECTS JAL’S CLAIMS, ORDERS INSOLVENCY PROCEEDINGS INITIATION”

Why in the news?

  • The National Company Law Tribunal (NCLT) ordered the initiation of insolvency proceedings against Jaiprakash Associates Ltd. (JAL) on June 3.
  • Jaiprakash Associates Ltd. (JAL’s) claim of facing a liquidity crunch and defaulting on debt repayments due to government delays and litigation was rejected by the NCLT.
source:slideplayer

About National Company Law Tribunal (NCLT):

  • Purpose: Quasi-judicial authority for resolving civil corporate disputes under the Companies Act, 2013.
  • Establishment: Formed on 1 June 2016 under the Companies Act, 2013.

Powers:

  • Not bound by Civil Procedure Code; follows principles of natural justice.
  • Can enforce orders akin to a court.
  • Empowered to scrutinize its own orders and regulate its procedure.
  • Adjudicates insolvency resolution process for companies and limited liability partnerships under Insolvency and Bankruptcy Code, 2016.
About Insolvency and Bankruptcy Code, 2016 :

  • Provides a time-bound process for resolving insolvency in companies and individuals.
  • Aims :to consolidate and amend existing insolvency laws, simplifying and expediting proceedings in India.

Objectives of IBC:

  • Consolidate and amend all existing insolvency laws in India.
  • Simplify and expedite the insolvency and bankruptcy proceedings in the country.

Associated Article:

https://universalinstitutions.com/insolvency-and-bankruptcy-code/

https://universalinstitutions.com/need-legislative-change-for-group-insolvency-framework/