India: Insolvency/Bankruptcy

The Supreme Court of India has delivered a landmark ruling addressing the growing threat of AI-generated fabricated legal precedents in judicial proceedings. In Pooja Ramesh Singh v. Jammu and Kashmir Bank Ltd., the Court established a zero-tolerance policy toward hallucinated case law, setting aside tribunal orders that relied on non-existent judgments while establishing comprehensive guidelines for the responsible use of artificial intelligence in the legal profession.

The High Court of Punjab and Haryana through its judgment dated 20.07.2026 in Ajay Gupta and Another v. Can Bank Factors Limited dismissed a Petition filed under Section 482 of the Code of Criminal Procedure, 1973 seeking quashing of criminal proceedings under Sections 138 and 141 of the Negotiable Instruments Act, 1881 on the ground that insolvency proceedings had been initiated against the company under the IBC.

The Insolvency and Bankruptcy Code, 2016 (IBC) was designed for time‐bound corporate resolution, RERA (2016) protects homebuyers in real estate, and PMLA (2002) combats financial crime. When a real‐estate firm enters insolvency or fraud is alleged, these laws collide.

The Calcutta High Court's ruling in Jainco Projects (India) Limited v. UCO Bank examines critical procedural requirements for SARFAESI appeals, specifically addressing the interplay between One Time Settlement orders and mandatory pre-deposit provisions. This decision clarifies when borrowers can challenge debt recovery actions and what financial obligations must be met before appellate tribunals will hear their cases.

Lenders increasingly evaluate recovery across every available layer of credit support rather than treating corporate insolvency as a standalone proceeding.

The National Company Law Appellate Tribunal (NCLAT) has delivered a clear verdict on the interplay between insolvency law and anti-money laundering enforcement. In the case Value Wise Consultancy Private Limited v. Deputy Director, Directorate of Enforcement & Ors. (Company Appeal (AT) (Ins) Nos. 1226 & 1227 of 2022), the Tribunal ruled on a question that increasingly troubles insolvency practice: once a company slips into moratorium, can it also expect protection from a separate law built to chase down criminally acquired wealth?

The present appeal arose from acquisition proceedings initiated under the National Highways Act, 1956. Pursuant to notifications issued under Sections 3A and 3D of the Act, the land belonging to Respondent No. 1 was acquired and vested in the Central Government. The Competent Authority passed an award determining compensation under Section 3G(1) of the Act.

The determination of what constitutes legitimate “Insolvency Resolution Process Costs” under the Insolvency and Bankruptcy Code, 2016 remains a fertile ground for judicial scrutiny, particularly where informal...

The interplay between social welfare statutes and insolvency legislation continues to generate significant judicial discourse in India.