Timeline Prescribed In IBC And The Regulations Made Thereunder Are Directory And Not Mandatory: Yogendra Aldak, Partner., Lakshmikumaran & Sridharan Attorneys
IBC is a special statute and is having an overriding effect over other enactments which is categorically held in a number of decisions and that is the reason relevant enactments such as Customs Act, 1962 underwent amendments after IBC came into force. Therefore, the observation of the Supreme Court in Sales Tax Officer v. Rainbow Papers Ltd., giving priority to statutory dues during CIRP as per Section 48 of GVAT Act, may worry the stakeholders. Further, the observation that security interest can be created by the operation of law may invite concerns. The Supreme Court reiterated that the timeline prescribed in IBC and the regulations made thereunder are directory and not mandatory and further that the power of Resolution Professional is limited to receive, verify, and collate the claims.
Around The World