India: Insolvency/Bankruptcy

In M/s ASJ Finsolutions Pvt. Ltd. v. Vikram Bajaj, the Supreme Court considered whether the Earnest Money Deposit (EMD) and other amounts paid by a successful bidder in a liquidation auction can be forfeited where the e-auction notice expressly so provides, even though the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (the “Regulations”) do not expressly provide for forfeiture.

The Insolvency and Bankruptcy Code, 2016 (IBC) was originally built as a monolithic architecture. Its primary mandate was clear: when a company defaults, the entirety of its corporate entity must be pulled into the Corporate Insolvency Resolution Process (CIRP). While this unified entity approach worked seamlessly for manufacturing units or simple corporate structures, its application to the real estate sector triggered catastrophic systemic failures. In real estate, a single developer frequently manages dozens of independent housing projects across varying stages of lifecycle, funding, and construction.

Diverging creditor timelines are what turn one company’s cash shortfall into several separate fights at once. Once suppliers, lenders and a personal guarantor are each entitled to act on their own schedule, one creditor moving first can reshape what’s left for everyone else which is a worse situation than the funding gap that started it.

A critical issue that has arisen in recent jurisprudence is whether, and to what extent, the NCLT can examine allegations of fraud in the insolvency process. While the IBC aims at swift resolution, the presence of fraudulent intent in initiating or conducting insolvency proceedings challenges this efficiency

The Bombay High Court has restrained Hamon Cooling Systems Private Limited (“Defendant No. 1”) from using the mark HAMON, holding that John Cockerill Hamon SA (the “Plaintiff”) had made out a strong prima facie case that it is the proprietor of the HAMON trade marks in India, and that Defendant No. 1’s use of the marks — traceable to a now-expired “Brand Usage Right” granted following a cross-border insolvency-driven transfer of the Hamon group’s global IP portfolio — amounted to infringement and passing off. The Order was passed by Justice Arif S. Doctor on 6th July 2026, allowing the Plaintiff’s Interim Application seeking to restrain Defendant No. 1 from using “HAMON COOLING” and “HCS HAMON COOLING” as trade marks and as part of its corporate name.

A Delhi High Court ruling examines whether a judgment-holder can withdraw court-deposited award money after the debtor's insolvency resolution plan is approved. The case explores the intersection of arbitration enforcement rights and the Insolvency and Bankruptcy Code's clean-slate doctrine, revealing how a creditor's failure to file a claim during insolvency proceedings can result in forfeiture of seemingly secured funds.

The Insolvency and Bankruptcy Code, 2016 (“IBC” or “Code”) seeks to provide for a time-bound resolution of corporate insolvency, maximisation of the value of assets and balancing the interests of stakeholders. A crucial component of this framework is the Committee of Creditors (“CoC”), which evaluates and approves resolution plans in accordance with its commercial wisdom.

Corporate creditors navigating insolvency proceedings face a critical challenge when the Directorate of Enforcement attaches assets under anti-money laundering laws. Recent tribunal rulings clarify that the Insolvency and Bankruptcy Code offers no protection from criminal attachment orders, forcing creditors to pursue relief through specialized PMLA courts rather than insolvency tribunals.

For nearly two years, setting up a new industrial unit or undertaking industrial expansion in the Taj Trapezium Zone (TTZ) required the leave of the Supreme Court. On 23.07.2026, this position changed when the Court modified the restriction imposed in October 2024, permitting the TTZ Authority to process approximately 400 pending applications for industrial projects in the region, subject to a prescribed scrutiny mechanism.