Provisions of State enactments which hinder the country’s new bankruptcy law Insolvency and Bankruptcy Code (IBC) meant to protect the interests of shareholders, creditors and workmen against entrenched managements unable to dig their way out of their debts, will be declared void, the Supreme Court held.
In a judgment heralding the IBC as an effective legal framework aimed to improve the Ease of Doing Business, a Bench of Justices Rohinton Nariman and Sanjay Kishan Kaul held that the erstwhile management of a company cannot represent it in court once insolvency resolution process has been admitted in the National Company Law Tribunal (NCLT) and the management transferred to an insolvency professional.
Entrenched managements are no longe…
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