The issue whether entries/ disclosures made in financial statements could be construed as an “acknowledgment” under Section 18 of the Limitation Act, came up for consideration before NCLAT. While this issue had been previously considered by various courts and tribunals, there was some ambiguity...
However, the Apex Court also, observed that the moratorium provision under Section 14 of the Code would apply only to the corporate debtor while the natural persons mentioned under Section 141 of the NI Act continue to be statutorily liable under the NI Act.
The government, sensitive to the hindered cash flows of various companies, has by now introduced three amendments to ameliorate the situation.
Therefore, the Apex Court overturned the order of NCLAT and held that the said mortgage transaction done was a preferential transaction under Section 43 of the IB Code, without considering it necessary to deal with whether these transactions are undervalued and/or fraudulent.
While the move taken by the Government may offer relief to stressed companies, certain provisions in the Ordinance can spring unwarranted consequences and open up the possibility of gross misuse of the leeway by wilful defaulters and fraudulent promoters.
The Hon'ble Union Finance Minister, Smt. Nirmala Sitharaman convened a press conference on 24th March 2020 to make announcements on statutory and regulatory compliance matters. The Minster of State for Finance and Corporate Affairs, Shri. Anurag Singh Thakur was also present. Amongst various other announcements made, a specific announcement was also made with respect to the... Continue Reading →