Section 60 Adjudicating Authority for corporate persons
“(1) The Adjudicating Authority, in relation to insolvency resolution and liquidation for corporate persons including corporate debtors
and personal guarantors thereof shall be the National Company Law Tribunal having territorial jurisdiction over the place where the
registered office of a corporate person is located.
(2) Without prejudice to sub-section (1) and notwithstanding anything to the contrary contained in this Code, where a corporate
insolvency resolution process or liquidation proceeding of a corporate debtor is pending before a National Company Law Tribunal, an
application relating to the insolvency resolution or liquidation or bankruptcy of a corporate guarantor or personal guarantor, as the case
may be, of such corporate debtor shall be filed before the National Company Law Tribunal.
(3) An insolvency resolution process or liquidation or bankruptcy proceeding of a corporate guarantor or personal guarantor, as the case
may be, of the corporate debtor] pending in any court or tribunal shall stand transferred to the Adjudicating Authority dealing with
insolvency resolution process or liquidation proceeding of such corporate debtor.
(4) The National Company Law Tribunal shall be vested with all the powers of the Debt Recovery Tribunal as contemplated under Part III
of this Code for the purpose of subsection (2).
(5) Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal
shall have jurisdiction to entertain or dispose of –
(a) any application or proceeding by or against the corporate debtor or corporate person;
(b) any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries
situated in India; and
(c) any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation
proceedings of the corporate debtor or corporate person under this Code.
(6) Notwithstanding anything contained in the Limitation Act, 1963 or in any other law for the time being in force, in computing the
period of limitation specified for any suit or application by or against a corporate debtor for which an order of moratorium has been
made under this Part, the period during which such moratorium is in place shall be excluded ”
VL Note : –
Section 61 Appeals and Appellate Authority
“(1) Notwithstanding anything to the contrary contained under the Companies Act 2013 (18 of 2013), any person aggrieved by the order
of the Adjudicating Authority under this part may prefer an appeal to the National Company Law Appellate Tribunal.
(2) Every appeal under sub-section (1) shall be filed within thirty days before the National Company Law Appellate Tribunal:
Provided that the National Company Law Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of thirty
days if it is satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days.
(3) An appeal against an order approving a resolution plan under section 31 may be filed on the following grounds, namely: –
(i) the approved resolution plan is in contravention of the provisions of any law for the time being in force;
(ii) there has been material irregularity in exercise of the powers by the resolution professional during the corporate insolvency
resolution period;
(iii) the debts owed to operational creditors of the corporate debtor have not been provided for in the resolution plan in the manner
specified by the Board;
(iv) the insolvency resolution process costs have not been provided for repayment in priority to all other debts; or
(v) the resolution plan does not comply with any other criteria specified by the Board.
(4) An appeal against a liquidation order passed under section 33 may be filed on grounds of material irregularity or fraud committed in
relation to such a liquidation order.”
VL Note : –
Section 62 Appeal to Supreme Court
“(1) Any person aggrieved by an order of the National Company Law Appellate Tribunal may file an appeal to the Supreme Court on a
question of law arising out of such order under this Code within forty-five days from the date of receipt of such order.
(2) The Supreme Court may, if it is satisfied that a person was prevented by sufficient cause from filing an appeal within forty-five days,
allow the appeal to be filed within a further period not exceeding fifteen days.”
VL Note : –
Section 63 Civil court not to have jurisdiction
“No civil court or authority shall have jurisdiction to entertain any suit or proceedings in respect of any matter on which National
Company Law Tribunal or the National Company Law Appellate Tribunal has jurisdiction under this Code. Civil court not to have
jurisdiction”
VL Note : –
Section 64 Expeditious disposal of applications
“(1) Where an application is not disposed of or order is not passed within the period specified in this Code, the National Company Law
Tribunal or the National Company Law Appellate Tribunal, as the case may be, shall record the reasons for not doing so within the
period so specified; and the President of the National Company Law Tribunal or the Chairperson of the National Company Law Appellate
Tribunal, as the case may be, may, after taking into account the reasons so recorded, extend the period specified in the Act but
not exceeding ten days.
(2) No injunction shall be granted by any court, tribunal or authority in respect of any action taken, or to be taken, in pursuance of any
power conferred on the National Company Law Tribunal or the National Company Law Appellate Tribunal under this Code.”
VL Note : –
Section 65 Fraudulent or malicious initiation of proceedings
“(1) If, any person initiates the insolvency resolution process or liquidation proceedings fraudulently or with malicious intent for any
purpose other than for the resolution of insolvency, or liquidation, as the case may be, the Adjudicating Authority may impose upon a
such person a penalty which shall not be less than one lakh rupees, but may extend to one crore rupees.
(2) If, any person initiates voluntary liquidation proceedings with the intent to defraud any person, the Adjudicating Authority may
impose upon such person a penalty which shall not be less than one lakh rupees but may extend to one crore rupees.”
VL Note : –
Section 66 Fraudulent trading or wrongful trading
“(1) If during the corporate insolvency resolution process or a liquidation process, it is found that any business of the corporate debtor
has been carried on with intent to defraud creditors of the corporate debtor or for any fraudulent purpose, the Adjudicating Authority
may on the application of the resolution professional pass an order that any persons who were knowingly parties to the carrying on of
the business in such manner shall be liable to make such contributions to the assets of the corporate debtor as it may deem fit.
(2) On an application made by a resolution professional during the corporate insolvency resolution process, the Adjudicating Authority
may by an order direct that a director or partner of the corporate debtor, as the case may be, shall be liable to make such contribution
to the assets of the corporate debtor as it may deem fit, if-
(a) before the insolvency commencement date, such director or partner knew or ought to have known that the there was no
reasonable prospect of avoiding the commencement of a corporate insolvency resolution process in respect of such corporate
debtor; and
(b) such director or partner did not exercise due diligence in minimising the potential loss to the creditors of the corporate debtor.
Explanation. – For the purposes of this section a director or partner of the corporate debtor, as the case may be, shall be deemed to
have exercised due diligence if such diligence was reasonably expected of a person carrying out the same functions as are carried out by
such director or partner, as the case may be, in relation to the corporate debtor. ”
VL Note : –
Section 67 Proceedings under section 66
“(1) Where the Adjudicating Authority passes an order under sub-section (1) or subsection (2) of section 66, as the case may be, it may
give such further directions as it may deem appropriate for giving effect to the order, and in particular, the Adjudicating Authority may—
(a) provide for the liability of any person under the order to be a charge on any debt or obligation due from the corporate debtor to
him, or on any mortgage or charge or any interest in a mortgage or charge on assets of the corporate debtor held by or vested in
him, or any person on his behalf, or any person claiming as assignee from or through the person liable or any person acting on his
behalf; and
(b) from time to time, make such further directions as may be necessary for
enforcing any charge imposed under this section.
Explanation. – For the purposes of this section, “assignee” includes a person to whom or in whose favour, by the directions of the person
held liable under clause (a) the debt, obligation, mortgage or charge was created, issued or transferred or the interest created, but
does not include an assignee for valuable consideration given in good faith and without notice of any of the grounds on which the
declaration has been made.
(2) Where the Adjudicating Authority has passed an order under sub-section (1) or (2) of section 66, as the case may be, in relation to a
person who is a creditor of the corporate debtor, it may, by an order, direct that the whole or any part of any debt owed by the
corporate debtor to that person and any interest thereon shall rank in the order of priority of payment under section 53 after all other
debts owed by the corporate debtor. ”
VL Note : –