Between The Lines - March 2024

KEY HIGHLIGHTS

• NCLT: Corporate insolvency resolution process cannot be initiated under Section 7 of IBC based on transfer agreement for purchase of debentures from financial creditors.
• NCLAT: Security for refund of advance amount cannot change the nature of transaction for supply of goods into financial debt.
• Delhi High Court: Directors of a company cannot be made a party to an arbitration proceeding which has been initiated against the company by the virtue of the 'group of companies doctrine'.
• NCLAT: Definition of financial debt under IBC does not use the expression that disbursement should be made to corporate debtor only.

I. NCLT: Corporate insolvency resolution process cannot be initiated under Section 7 of IBC based on transfer agreement for purchase of debentures from financial creditors.