Income-tax (24th Amendment) Rules, 2021

  • In exercise of the powers conferred by Clause (c) and Clause (cd) of Section 140 and Clause (viii) of Sub-Section (2) of Section 288 read with Section 295 of the Income-tax Act, 1961 (43 of 1961), CBDT amended the existing Income-tax Rules, 1962 (Principal Rules). ,/
  • Rule 12AA is inserted to define 'any other person' in relation to verification of returns in terms of Section 140 of Income-tax Act. As per the said Rule, 'any other person' shall be the person, appointed by the Adjudicating Authority for discharging the duties and functions of an Interim Resolution Professional, a Resolution Professional or a Liquidator under the Insolvency and Bankruptcy Code, 2016.,/
  • The amendment is also introduced by way of Regulation 51B whereby an 'Authorized Representative' for the purposes of Clause (viii) of Sub-Section (2) of Section 288, any other person, in respect of a company or a limited liability partnership, shall be the person appointed by the Adjudicating Authority for discharging the duties and functions of an Interim Resolution Professional, a Resolution Professional or a Liquidator.,/

The Insolvency and Bankruptcy Code (Amendment) Act, 2021

  • The Insolvency and Bankruptcy Code (Amendment) Bill, 2021 as introduced by the Ministry of Finance before the Lok Sabha in July 2021. It received the assent of the President in August 2021. In view thereof, Amendment Bill, 2021 will now be recognized as the Insolvency and Bankruptcy Code (Amendment) Act, 2021 (Amendment Act).
  • A brief history of the Amendment:
    • A proviso has been added to Section 4 of the IBC whereby a minimum threshold of not more than one crore rupees for initiating pre-packaged insolvency resolution process has been introduced.
    • Chapter III-A, containing Sections 54A to 54P dealing with pre-packaged insolvency resolution process for micro, small and medium enterprise, has been introduced. These are to be read with the IBBI (Pre-packaged Insolvency Resolution Process) Regulations, 2021 (PPIRP Regulations).
    • The provisions pertaining to penalty for fraudulent management of the Corporate Debtor during PPIRP and punishment for offences related to PPIRP has been introduced.


Pratap Technocrats Pvt Ltd & Ors v. Monitoring Committee of Reliance Infratel Ltd & Anr

Civil Appeal No. 676 of 2021

Background facts

  • The Corporate Insolvency Resolution Process (CIRP) of Reliance Infratel Ltd (Corporate Debtor), was initiated by an order dated May 15, 2018, of the NCLT. However, the same was challenged in an appeal, and the order of admission was stayed. On April 30, 2019, the National Company Law Appellate Tribunal (NCLAT) vacated the stay on the CIRP as the appeal was withdrawn. In view thereof, the CIRP of the Corporate Debtor resumed and the Resolution Professional (RP) collated the claims and formed the Committee of Creditors (CoC) of the Corporate Debtor.
  • Thereafter, the RP invited Expressions of Interest from prospective Resolution Applicants. A total of fifteen Expressions of Interest were received, out of which only four Resolution Plans were received. After due deliberation, the Resolution Plan submitted by Reliance Digital Platform and Project Services Limited was approved by the CoC.
  • The plan approved by the CoC was placed before the NCLT for approval in terms of Sections 30(6) and 31 of the IBC. The NCLT, vide order dated December 03, 2020 approved the Resolution Plan by Reliance Digital Platform and Project Services Ltd. The order by the NCLT approving the Resolution Plan was challenged by certain Operational Creditors before NCLAT on the following grounds:
    • The Appellants were kept unaware of the CIRP and no details were provided by the RP on the disposal of the fund towards their claims.
    • The claims of the Appellants had not received a fair and equitable treatment as the Appellants were made to suffer a reduction of 90% of their total claims.
  • The NCLAT, vide judgment dated January 04, 2021 (Impugned Order), rejected the appeal by the Appellants stating that there was no substance in the grievance of the Operational Creditors that they have been unfairly or inequitably treated regarding the distribution of funds. The NCLAT held that equitable treatment can be claimed only by similarly situated creditors. Operational Creditors stand on a different footing as compared to Financial Creditors.
  • Aggrieved by the Impugned Order, the Appellants filed an Appeal before the Supreme Court (SC)

Issue at hand?

  • What is the ambit of the Adjudicating Authority to determine the amount that is payable to the Operational Creditors or the overall creditors of the Corporate Debtor under the Resolution Plan?

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