What happened when we asked ChatGPT about landmark judgements in the IBC space…

So, we asked ChatGPT about the landmark judgements under the Insolvency and Bankruptcy Code regime, and it came up with a number of landmark judgements. But all those judgements are from the period before 2022.

Here are some recent landmark judgments in the Indian Insolvency and Bankruptcy Code (IBC) (that the ChatGPT came up with:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019): In one of the first landmark judgements in the IBC space, the Supreme Court upheld the constitutional validity of the IBC, stating that it was a much-needed reform to tackle the issue of bad debts and non-performing assets in the banking sector.

In this case, the Supreme Court also held that the provisions of the IBC do not violate the constitutional right to equality and do not discriminate against any class of creditors.

Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta (2019): This case dealt with the question of who should control the resolution process under the IBC. The Supreme Court ruled that the Committee of Creditors has the right to approve or reject a resolution plan, rather than the courts.

Bhushan Power & Steel Ltd. (2020): In this case, the National Company Law Appellate Tribunal (NCLAT) ruled that the resolution process under the IBC must be completed within 330 days, and any extension of this deadline must be approved by the courts.

RP Sanjiv Goenka Group v. AMR Infrastructure Ltd. (2021): The Supreme Court ruled that operational creditors must be treated equally with financial creditors in the resolution process under the IBC.

Innoventive Industries Ltd. v. ICICI Bank (2018): This case dealt with the issue of default by a corporate debtor and the rights of financial creditors. The Supreme Court ruled that a default under the IBC must be a “default in payment” and not just a “default in performance.”

Binani Cement Ltd. v. Bank of Baroda (2018): This case addressed the question of whether the resolution process under the IBC can be triggered by a single financial creditor. The Supreme Court ruled that a single financial creditor can initiate the resolution process.

Jaypee Infratech Ltd. (2018): In this case, the NCLAT ruled that the IBC allows for the appointment of an interim resolution professional even if the Committee of Creditors has not been constituted.

JSW Steel Ltd. v. Bhushan Power & Steel Ltd. (2020): The NCLAT ruled that the provisions of the IBC take precedence over the provisions of any other law in the case of a conflict between the two.

ArcelorMittal India Pvt. Ltd. v. Satish Kumar Gupta (2019): In this case, the Supreme Court ruled that the resolution process under the IBC must prioritize the repayment of secured debts over unsecured debts.

SREI Infrastructure Finance Ltd. v. Jaypee Infratech Ltd. (2019): The NCLAT ruled that the IBC does not provide for a stay on proceedings in other courts in the case of a corporate insolvency resolution process.

Homebuyers v. Amrapali Group (2019): The Supreme Court held that the homebuyers are considered financial creditors under the IBC and can participate in the resolution process.

Union Bank of India v. Alok Industries Ltd. (2018): The NCLAT ruled that the IBC does not permit a corporate debtor to challenge the validity of a debt once it has been admitted by the Committee of Creditors.

Essar Steel India Ltd. v. Gujarat NRE Coke Ltd. (2019): The Supreme Court ruled that the provisions of the IBC take precedence over the provisions of any other law, including the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

RP Sanjiv Goenka Group v. Shri Vaibhav Kapoor (2020): The NCLAT ruled that the powers of the resolution professional under the IBC are wide-ranging and cannot be challenged in court unless they are in violation of the law or the provisions of the IBC.

ArcelorMittal India Pvt. Ltd. v. Numetal Mauritius Ltd. (2018): The NCLAT ruled that a resolution applicant must not be associated with a defaulting promoter in order to be eligible to participate in the resolution process under the IBC.

Operational Creditor v. Nagarjuna Fertilizers and Chemicals Ltd. (2018): The NCLAT ruled that operational creditors must be given equal treatment with financial creditors in the resolution process under the IBC.

Dewan Housing Finance Corp. Ltd. v. Rajesh Kumar Wadhawan (2018): The NCLAT ruled that the provisions of the IBC apply to both individual and corporate debtors, and that the resolution process must be initiated against both in a similar manner.

Standard Chartered Bank v. Satish Kumar Gupta (2018): The Supreme Court held that the provisions of the IBC do not infringe upon the right to carry on a trade or business, and that the resolution process may be initiated even against a running business.

Tata Steel Ltd. v. S.N. Suhag (2019): The NCLAT ruled that the provisions of the IBC do not apply to debt owed by a person to the Central Government or any State Government, and that such debt must be recovered through other means.

These landmark judgments have helped provide clarity and direction on various key aspects of the IBC and have helped to establish it as a comprehensive framework for dealing with insolvency and bankruptcy in India.

Also See: Landmark Judgements