The Supreme Court finally put to rest the long-drawn battle in the Essar Steel insolvency. This landmark decision has established the primacy of the commercial wisdom of the committee of creditors, settled several issues that have been affecting the corporate insolvency resolution process and upheld the constitutional validity of the Insolvency and Bankruptcy Code (Amendment Act), 2019.
The much-awaited judgement of the Supreme Court in the matter of Committee of Creditors of Essar Steel India Limited through Authorised Signatory v. Satish Kumar Gupta & Ors. was pronounced on 15 November 2019. The Supreme Court has put to rest doubts and settled important issues concerning the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (Code). It has clarified the scope of powers of the Committee of Creditors (CoC) of a corporate debtor and has set aside the order of the National Company Law Appellate Tribunal (NCLAT) by which decisions of the CoC of Essar Steel were modified/set aside.
The judgement has also upheld the constitutional validity of the Insolvency and Bankruptcy Code (Amendment Act), 2019 (Amendment Act, 2019) with some relaxation on the timeline for completion of the CIRP.
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