Tag: rules

On Friday, the landmark Judgement in the Essar Steel case was passed by the Supreme Court of India, which gave priority to the financial creditors against the operational creditors. From the proceeds that will be generated from the liquidation process dues of the financial creditors will be released on a priority basis, and then the operational creditors will be paid.  Not only came the Essar ruling but also a new rule for the Bankruptcy law was notified. Ministry of Corporate Affairs has notified the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019. The new rules have been notified, especially for the insolvency proceeding against the Financial Service Providers (FSPs) and will not include banks. The central government framed the rules for the insolvency that is initiated against the FSPs and mentioned that an insolvency proceeding against the FSPs could only be taken only when an appropriate regulator makes the application.