Suppliers

The Code provides suppliers with a mechanism to initiate an insolvency resolution process in the event a debtor company is unable to pay its debts.

Suppliers
Key Points to consider for supplier

The Code allows the suppliers to initiate an insolvency resolution process, if the amount of default by the debtor company is at least One Crore rupees.

The debts should be undisputed. Effective supplier dues recovery requires timely payment, clear communication, negotiation, follow-up, and legal action if necessary.

For Debtor

A debtor company may also, by itself, take recourse to the Code if it wants to avail of the mechanism of resolution process. In the event of the inability to pay creditors, a company may choose to go for an insolvency resolution process – a measure by which the company can itself approach the NCLT for the purpose of resolution, for timely and effective supplier dues recovery.

A company may also, take recourse of the Code to go for voluntary liquidation process, if it wants to exit from business, provided the assets of the company are sufficient to  set off liabilities and dissolve it.

PC
Pradeep Kumar Chauhan
Insolvency Professional
Finance & Accounts, Auditing, Financial Management, Planning & Budgeting, Direct and Indirect Taxation
Location Mark
Mumbai
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11 Engagements
AS
Austine Sequeira
Insolvency Professional
Project Advisory and Financial Syndication Services and Corporate Finance.
Location Mark
Mumbai
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11 Engagements
MB
Manish Buchasia
Insolvency Professional
Manufacturing, Trading, Healthcare, Agriculture, Utilities
Location Mark
Mumbai
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11 Engagements
HS
Hemant Kumar Shah
Insolvency Professional
Manufacturing, IT, Power/Utilities
Location Mark
Mumbai
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11 Engagements
VK
Vijay Kumar Kulshretra
Insolvency Professional
Financial recoveries
Location Mark
Mumbai
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11 Engagements
MV
Murali. V
Insolvency Professional
Accounting, Auditing, Taxation and Management Consulting.
Location Mark
Mumbai
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11 Engagements
IK
Ishwar Kalantri
Insolvency Professional
Banks and Financial institutions.
Location Mark
Mumbai
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Debt Resolutiion
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11 Engagements
PS
Pawan Shetty
Insolvency Professional
Audit, Taxation, Accounting, Consulting and Assessments.
Location Mark
Mumbai
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Debt Resolutiion
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11 Engagements
KT
K.K Taneja
Insolvency Professional
Textile, Real Estate, Hospitality
Location Mark
Mumbai
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11 Engagements
AP
Arun Poddar
Insolvency Professional
Manufacturing, Real estate, Beverages, Automotive.
Location Mark
Mumbai
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11 Engagements
SN
Surendranath Nair
Insolvency Professional
Manufacturing, Oil & Gas, Real Estate, Education
Location Mark
Mumbai
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11 Engagements
MG
MK Gaind
Insolvency Professional
Real estate
Location Mark
Mumbai
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11 Engagements
RA
Rajendra Aphale
Insolvency Professional
Project reports & program management, Compensation management, Independent arbitrator.
Location Mark
Mumbai
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Debt Resolutiion
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11 Engagements
NP
N Veera Pandian
Insolvency Professional
Real Estate
Location Mark
Mumbai
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Debt Resolutiion
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11 Engagements
RG
R.K Giridhar
Insolvency Professional
Real Estate, Manufacturing, Trading, Power/Utilities
Location Mark
Mumbai
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Debt Resolutiion
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11 Engagements
VB
Vikram Bhatnagar
Insolvency Professional
Infrastructure, manufacturing
Location Mark
Mumbai
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11 Engagements
SM
Subhash Modi
Insolvency Professional
Manufacturing, Real Estate
Location Mark
Mumbai
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11 Engagements
AK
Arun Kapoor
Insolvency Professional
Manufacturing, Real Estate, Construction.
Location Mark
Mumbai
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11 Engagements

Frequently Asked Questions

What is included in the Financial Debt?

As per Section 5(8) of the Code, Financial Debt means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes:-

a) Any money borrowed against the payment of interest.

b) Any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent.

c) Any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument.

d) The amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards.

e)  Any receivables sold or discounted other than any receivables sold on non-recourse basis.

f)  Any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing.

g)  Any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account.

h)  Any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution.

i)  The amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in above clauses.

What is included in Operational Debt?

As per Section 5(21) of the Code, Operational Debt means a claim in respect of

a)  Provision of goods or

b)  Provision of services including employment

c)  Or a debt in respect of the repayment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority.

Who can initiate the CIRP?

It may be initiated by the:

- Financial Creditors (singly or jointly with other creditors);

- Operational Creditors (including Government and Employees/Workmen);
 
- Corporate Debtor

When can CIRP be initiated?

CIRP may be initiated where the minimum amount of default i.e. failure to pay whole or any part of installment of the debt or interest due is Rs. 1,00,000/- or such higher amount as may be notified by the Central Govt. not exceeding Rs. 1 Cr. Presently, it is Rs. One Crore.

Can a financial creditor in respect of whom there is no default file an application of resolution?

Yes, a financial creditor for whom there is no default can still file an application against a corporate debtor provided, the corporate debtor has a default against some other financial creditor. However, in that case, he can only file joint application with the financial creditor for whom there is default.

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