KIIT Law School Organizes Webinar on Liquidation Process under Insolvency and Bankruptcy Code, 2016
KIIT Law School (KLS) Centre for Studies in Business and Corporate Law (KCBCL), under the aegis of the Department of Business Law and Corporate Governance, conducted aWebinar on ‘Liquidation Process under Insolvency and Bankruptcy Code, 2016’ on 27th February 2022 on Zoom Platform.
Delivering the webinar lecture, Mr. Kunal Godhwani, Independent Legal Practitioner stated that in the earlier regime, there was the process of winding up which was incorporated in Section 397 and 398 of the Companies Act, 2013. The dissolution process has to be completed within a stipulated time frame of 330 days. If there is no resolution which has been accepted within the time period, it would lead to the company ending up for liquidation. The company will then invite a third prospective buyer to come and buy the company at a better value. What needs to be kept in mind is that liquidation only happens when resolution fails or there is no resolution.
The Speaker proceeded to give a brief overview of Section 53 of the Code which provides the waterfall mechanism for the liquidation process. He also mentioned the linkage of the SARFAESI Act to Section 52 of the Code and stated it to be the route the creditor will take, if they want to stand outside the liquidation process and sell their assets on their own. The two stages which are involved under this are Realization & Relinquishment. He further explained in detail the order of payment under Section 53 specifically the pari passu treatment of workers due with that of the Secured Creditors.
He highlighted the pending issue before the Hon’ble Supreme Court regarding secured creditors relinquishing their assets into the liquidation route however getting the distribution as per the ratio of the Creditors. The NCLT has stated that if you relinquish, then you would have to follow the liquidation route and get the proceeds under the same. In recent times, Kotak Mahindra Bank has challenged this view of the NCLT, and that is yet to be decided in the recent times. The speaker concluded the session by sharing his practical experience in handling matters pertaining to Liquidation.
The talk followed a Q&A session, facilitated by Professor Saptarshi Das, Faculty Member, KCBCL. Prof. Ipsita Das, Assistant Professor and Centre Coordinator for KCBCL; Prof. Mr. Saptarshi Das, Assistant Professor and Faculty Member, KCBCL; and Sangeeta Basu, Student Member, KCBCL also spoke on the occasion. The rapporteurs of the session wereMandavi Banerjee and Debdatta Mukhopadhyay, Student Members, KCBCL. As many as 58 participants joined the webinar.