Purpose of Insolvency and bankruptcy code
legal experts and in the process of deriving the inherent meaning of it. The aim is to make the interpretation comprehensive.
Some of the so-called ‘conflicting interpretations’ that may lead to a dispute have been identified by experts. Work is going on to correct the same. The fundamental objective is to make it simple to a bankruptcy lawyer while dealing with the disputes.
As there is further clarity comes about the several clauses and terms, it becomes more and more simple and clear.
What are the provisions?
The code clarifies that a corporate creditor can file the insolvency application against a debtor (corporate) before the tribunal after 10 days of the expiry of service of the demand notice raised by the operational creditor.
The following conditions should be fulfilled:
- None of the parties received repayment of the operational debt
- There is no notice from the corporate debtor about existence of dispute
- The date of the pendency of suite (or arbitration proceeding) is before the invoice or notice.
The code empowers the tribunal to reject or accept the insolvency application raised by the creditor based on certain criteria.