Lenders will cite one day default clause under Insolvency and Bankruptcy Code (IBC) to defend their action against erring promoters taken to insolvency under the now defunct February 12, 2018 circular of the Reserve Bank of India (RBI).
Sources said promoters of about half a dozen stressed power entities referred to National Company Law Tribunal have approached the bankruptcy court to quash insolvency proceedings against them as it has become non-maintainable following the Supreme Court order declaring the RBI circular ultra vires.
But banker’s are confident that stressed assets referred to NCLT will continue to face bankruptcy proceedings as IBC clearly states such referral even if there is one day delay or default by any entity in meeting its loan commitments. Read More
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