Coronavirus outbreak: What should equity investors do in current volatile market scenario

Coronavirus outbreak: What should equity investors do in current volatile market scenario

“I will tell you How To Become RICH. Be fearful when others are greedy and Be greedy when others are Fearful”. - Warren Buffet

Introduction

The coronavirus (COVID-19) outbreak is causing widespread concern and economic hardship for consumers, businesses and communities across the globe. The world is experiencing social distancing, travel restriction, restricted travel, scaling down of business operation, disruption of supply chain, reduced demand and an overall contraction of economic activity.

Fears of a global Covid-19 pandemic have battered the stock market and the strain of the virus is sending ripples through the stock market, business, and world economy.

Indian equity markets have corrected significantly over the last one month (Nifty down ~26% from its 52-week high of 12,362 to the lows of 16th March 20) in tandem with global equity markets due to headwinds from the Covid-19 outbreak across multiple countries

The brutality of the stock market crash has caught everyone off guard. Within 20 trading days, starting 24 February, the Sensex has declined nearly 15,000 points

Nifty going down to multi-month lows, investors are struggling to find the right stocks for investing. There is a bearish sentiment in the market and hence, it is imperative to note that what investor do in the current scenarios.

The Psychology of Investment  

Ben Graham, widely known as father of financial analysis, has taught three generation how to navigate the market. Graham observed that an investor’s worst enemy was not stock market but oneself.  

Imagine that you and Mr. Market (“Nifty/Sensex”) are partners in a private business. Each day, without fail, Mr. Market quotes a price at which he is willing to either to buy your interest or sell his.

The business you both own is fortunate to have stable economics characteristics, but. You see, Mr. Market is emotionally unstable. Some day he is cheerful and can only see brighter days ahead. On these days, he quotes a very high price for share in your business. On the other, hand Mr. Market is discouraged and, seeing nothing but trouble ahead, quotes a very low price. If Mr. Market’s quotes are ignored, he will be back again tomorrow with new quote. However, If Mr. Market is in drunken mood, you are free to ignore him or take the advantage of him.

Analysis of Mr. Market and Impact of Corona-virus

In the past couple of years, the Gross Domestic Product (“GDP”) in local current prices has grown at annual rate of 16 % over the 5 years. Please note the GDP rate includes the effect of price inflation and it is NOT the real GDP. Further, it is imperative to note that the P/E (“Price- Earning Ratio”) since 5 months was in in range bound 25-28. Whereas, in last couple of weeks due to the pandemic Corona-virus shaved of the one third of the market cap and hit dramatically. Consequently, P/E ratio scourge to 17-19. Thus, considering the Current scenario we may say that to earn Rs.1 we need the investment of Rs. 17

P/E Ratio = Price/ Earning = 17/1  

Assuming that due to pandemic Corona-virus the earnings would brutally whipped out, there is going to be a slowdown of business operations, there would be NPA issues, some of the sectors would virtually down, and some of them will be on the verge of bankruptcy.

Considering the fact, thus, assuming that earnings would fall from 1 to 0.5 and followed by the principle of Efficient-market hypothesis, assuming that price would be reflected at 8.5. Therefore, the P/E ratio would be 17. P/E Ratio = 8.5/0.5.

Now further, assuming the fact that down the line 5 years, Indian economy strives to recover from a slowdown and the earning would start recovering, and GDP would start surging at annual rate of 15% Compounded annually. Consequently, the earning would be double from Rs.1 to 2 and Mr. Market again start trading at the P/E Ratio of 25.

Explaining the mathematical pristine of the P/E ratio considering the aforesaid assumption as follows:

P/E ratio = Price/ Earning

25 = Price/ 2, Price = P/e * earning

Price = 50.

Thus, based on aforesaid assumption we may conclude that to earn Rs. 2 we need the investment of Rs. 50.

Now Synchronizing, the current scenario of the market with the aforesaid assumption we may conclude that if we Invest Rs.17 in the current market and assuming that the Mr. Market recover all the loss aversion and rationally correct itself in the next 5 years and left over all the physical and mental languishments of corona-virus the price would be Rs.50.

Therefore, conclude that Rs. 17 invest in current market would be payoff the Rs.50. Perhaps clear demonstrate the Mr. Market may compound at the rate of 25% from current scenarios.

A simple illustration let us imagine that you are running a business and you are earning Rs. 1 Crore annually from your business, and market price of your business is Rs.25 Crore. Thus, P/e ratio of your business exhibited at 25. Then suddenly the pandemic corona-virus hit dramatically on economic hardship of your business and your business earnings would start fading out goes to 0.5 Crore,   having said that the price would rationally followed, thereby assuming the price would be 8.5 Crore. Concluding that P/e ratio is 17. Now my question to you would you sell your business.

If answer is no, assuming the crisis of outbreak of pandemic is over and economy start recovering and your business again start paying off and down the line 5 years the business start paying the earning of 2 Crore followed by the market price of your business is Rs.50 Crore.

Market cap to GDP (also known as the Buffet Indicator) 

A common metric of measuring whether market is overvalued or undervalued is to gauged by the Indicator warren Buffet Indicator

The Warren Buffet Indicators defined as total value of a market relative to the economy GDP. A value below 100 per cent suggests the market is undervalued and is due for recovery.

Ratio of total market cap over GDP: Maximum - 158%; Minimum - 40%

Considering the present scenario

Current Annual GDP: $2,879 billion US dollars or 216,455 in billions of national currency and market cap on 26^th March, 2020 is 97,728.60 billions of national currency (Source NSE)

=97,728.60 / 216,455*100

=45.15% 

Interpretation
If the Ratio is :

•      50% to 75%, the market is said to be modestly undervalued
•   75% to 90%, the market may be fair valued
•  90% to 115%, the market is said to be modestly overvalued

Concluding, that Mr. Market is displaying a collective frenzy leading to a disruption in price discovery and sharp differences in bid-ask rates.

Key takeaways from market cap to GDP

1.     In current Equity market outlook as on March 26, 2020, India’s Market Cap to GDP ratio sharply at 45.15% clearly shows that the Mr. Market is trading certainly low and undervalued.

2.     The current Equity market is trading at the significant margin of safety of more than 50%

3.     The current market is trading significantly below to its intrinsic value.

4.     When the cycle of greed and fear plays itself out over and Mr. Market start recovering, it may certainly surge to 100%. Therefore, the clear indication of more than 50% up trend from this point.

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AUTHOR: - JAIDEEP BHALLA
PARTNER AT A BIZ CHANCELLOR (ABC)
(A FIRM OF CORPORATE EXPERTS )
(Company Secretary (Aspirant), LL.B, B.COM Graduate, An Investment Portfolio analysts,
First Runner-up winner Moot Court Competition Organised by ICSI Noida Chapter)
Mobile No. 7838684213

Disclaimer: 

No reader should act on the basis of any statement contained herein without seeking professional advice. The results & the interpretation has been done on the basis of my understanding of the Act & Rules, where applicable and with reference to the general articles and analysis. The author explicitly disclaims any financial or other liability of any kind arising on account of any action taken pursuant to the results or interpretation of this document. With respect to information available herein before, the author doesn’t make any warranty, express/implied or assume any liability or responsibility for the accuracy, completeness, or usefulness of such information.

For any help/assistance write us on abizchancellor@gmail.com

       

INSOLVENCY AND BANKRUPTCY CODE (AMENDMENT) ACT, 2020 

In the current scenario, Insolvency and Bankruptcy Code (Hereinafter called  “Code”) declined towards recovery instead of fulfilling the core objectives of this code. “Recovery is incidental under the Code. Its primary objective is rescuing companies in distress." ­­– Dr. M.S. Sahoo (Chairperson, Insolvency and Bankruptcy Board of India) The above quoted words of Dr. Sahoo from his article in the print edition of Indian Express on March 14, 2020 under the title: 'The real reform', form the underlying theme of the Insolvency and Bankruptcy Code (Amendment) Act, 2020 (Hereinafter called “Code 2020”)

The Code 2020 was passed by the Lower House of the Parliament on March 6, 2020 and by the Upper House on March 12, 2020.

After receiving the assent of the President, the Amending Statute was published in the Official Gazette on March 13, 2020.

This Article attempts to underscore and unfold the changes introduced in the Code by the Code 2020.

MAJOR KEY HIGHLIGHTS OF THE AMENDMENT

The Code 2020 aims to provide a time bound completion of the insolvency process, confers preference upon secured financial creditors over operational creditors in the matter of distribution of assets upon resolution of a corporate debtor, and lays down the manner of voting by an authorized representative on behalf of the class of financial creditors.

Insolvency commencement date

Under Section 2 of the Code 2020, deletes the proviso from the definition of "insolvency commencement date" u/s 5(12) of the Code such that the insolvency resolution process commences from the date of admission an application for initiating corporate insolvency resolution process (CIRP), and not when the 
Interim Resolution Professional (IRP) is appointed by the adjudicating authority (Hereinafter called as "AA"). The corresponding change brought out in Section 16(1) of the Code mandates the AA to appoint the IRP on the insolvency commencement date, withdrawing the leeway of 14 days from the insolvency commencement date for the appointment of IRP. The above amendment curtails the anticipated delay in completion of resolution to the extent of 14 days.

Expension in Definition of interim finance

The legislature has expanded the ambit of 'interim finance' u/s 5(15) of the Code by insertion of the words "and such other debt as may be notified" at the end of its definition. Interim finance essentially refers to short-term loans required to keep a company under the CIRP running as a going concern. The Code allows an IRP/RP to raise interim finance in order to protect and preserve the value of the property of a corporate debtor ("CD") and to manage its operations as a going concern. In the Code, the term 'insolvency resolution process cost' includes any interim finance raised for a corporate debtor along with the cost of raising such interim finance. The distribution waterfall u/s 53 of the Code provides for the highest priority to be given to insolvency resolution process costs, which includes such interim finance.

Section 7 – initiation of corporate insolvency resolution process by financial creditor

The Code, 2020 raises the minimum threshold for certain classes of financial creditors for initiating CIRP, prescribing that the application by these creditors u/s 7(1) of the Code should be filed jointly by at least 100 such creditors or 10% of their total number, whichever is less. These classes include real estate allottees and security or deposit holders represented by a trustee/agent. The amendment also clarifies that where such an application for initiating the CIRP against a CD has not been admitted by the AA before the commencement of the Code, 2020, such application shall be modified to comply with the aforesaid requirements within thirty days of the commencement of the said Act, failing which the application shall be deemed to be withdrawn before its admission.

This can easily be touted as the most far-reaching amendment to the IBC' 2016 which is likely to be greeted with a constitutional challenge by the homebuyers. It is noteworthy that through the Second Amendment Act of 2018, the government, by inserting an explanation to Section 5(8)(f) of the IBC, had accorded homebuyers the status of financial creditor in order to empower them to be part of the Committee of Creditors (“CoC”). However, builders had challenged the constitutional validity of that amendment before the Apex Court in in Pioneer Urban Land and Infrastructure Limited vs. Union of India. The Apex Court, vide its judgment dated August 9, 2019 held the amendment to be constitutional and rejected the developers' plea. In this matter, the builders had suggested introduction of a minimum threshold for homebuyers to trigger the Code but that was not accepted by the Court on the ground that, "the doctrine of reading down would apply only when general words used in a statute or regulation can be confined in a particular manner so as not to infringe a constitutional right." Hence, the Apex Court having rejected the matter of minimum threshold in view of a perceived legislative lacuna, the legislature has incorporated such requirement in the Code sans over-reaching the Pioneer judgment.

While the legislature has sought to placate the developers from over-exposure to remedial and welfare legislations, the concerns of homebuyers remain with respect to implementation of the amendment. The minimum threshold criteria is fraught with practical difficulties since sale is a continuous process, and how will a homebuyer know how many units have been sold to determine the 10% of total number of units sold in real estate project, especially when 10% s less than 100. That said, the aggrieved homebuyers can still look elsewhere (RERA or COPRA) for redressal of their complaints against the developers and builders.

Corporate debtors entitled to make application

Under section 4 of the Code, 2020 inserts an explanation u/s 11 of the Code which stipulates that a corporate debtor undergoing CIRP or having completed CIRP 12 months preceding the date of making of the application or in respect of whom a liquidation order has been made, etc. shall be entitled to make an application to initiate CIRP against other corporate debtors. This step is likely to enhance the maximisation of value of a corporate debtor. t is pertinent to note that NCLT, Mumbai and NCLT, Delhi had adopted two divergent views in Jai Ambe Enterprise vs. S. N. Plumbings Pvt. Ltd. And  Asian Plumbings and Mandhana Industries Ltd. vs. Instyle Exports Pvt. Ltd. respectively, and there was a pressing need for clarification. Now, with the newly inserted explanation to Section 11, the legislature has settled the debate in agreeing with the NCLT, Mumbai and upholding its viewpoint that it is one of the duties of the RP to recover the outstanding debts of a CD against whom the CIRP is already in progress and it is a right course of action for managing the affairs of the financially stressed company.

Mashrooming the ambit of moratorium

Under Section 5 of the Code, 2020 inserts an explanation to Section 14(1) of the Code which extends the the moratorium under IBC to protect the license, permit, registration, quota, concessions, clearances and other similar grants or rights given by the Central or State Government, local authority, sectoral regulator or any other authority from suspension and termination during the CIRP, unless there is a default in payment of the current dues for its use or continuation during the moratorium period. This amendment was necessary in view of the Supreme Court  ruling in Embassy Property Development Pvt. Ltd. v. State of Karnataka, Civil Appeal No. 9170 of 2019, dated December 3, 2019, wherein it dealt with the issue of deemed extension of lease granted by the government. it was observed by the Apex Court that the purpose of moratorium is only to preserve the status quo and not to create a new right, and that Section 14(1)(d) only prohibits the right not to be dispossessed, but not the right to have renewal of the lease of such property. The newly inserted explanation to Section 14(1) augments the hopes of a CD facing CIRP, and advances the intent of IBC to preserve the status of a CD as a going concern. It also does well to premise such protection on the payment of current dues.
The amended Section 14(3)(a) protects not only the transactions from moratorium now, but also agreements or other arrangements notified by the Central Government.

Section 23 management Of operation of CD

 The substitution of the Proviso u/s 23(1) of the Code clarifies that a RP shall continue to manage the affairs of the CD till the Resolution Plan is approved by the AA u/s 31(1)till the appointment of a liquidator u/s 34 by the AA in the event of rejection of the resolution plan for failure to meet requirements mentioned in Section 30. This is expected to ease the functioning of a RP and dispenses with the requirement of filing endless applications seeking suitable direction/s. It also expressly authorises management of affairs by RP during the interregnum from the rejection to RP till appointment of liquidator.

Introduction of  Section 32 A in this code

The insertion of Section 32A in the Code is the most significant amendment brought out by the Government, that strives to shield the successful resolution applicants and their property from the threat of criminal proceedings qua the offences committed by the former promoters of the CD.

provides that the liability of a CD for an offence committed prior to the commencement of the CIRP shall cease and the CD shall not be prosecuted for such an offence from the date on which the resolution
plan has been approved by the AA u/s 31 of the Code.

Also, the proviso to Section 32A(1) provides for discharge of a previous prosecution, instituted during the CIRP against such CD, from the date of approval of the resolution plan.

Notwithstanding the immunity given, Section 32A makes it mandatory for the CD and/ or any person who may be required to assist or co-operate with any authority investigating an offence committed prior to the commencement of the CIRP, to provide necessary assistance and co-operation.

Section 227 Financial service provider

The newly inserted explanation to Section 227 of the Code provides that the proceedings for insolvency and liquidation for financial service providers or categories of financial service providers maybe conducted with such modifications and in such manner as may be prescribed. 

This comes in the wake of notification of the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 in November last year.

Conclusion 

The Insolvency and Bankruptcy Code, 2016 has played  a game-changer in way the rest of world perceives India as a purely commercial destination. In India has jumped several ranks crossed several hurdles to fare well in the global indexes and parameters of "Ease of Doing Business". This is primarily attributable to dynamism and resilience demonstrated by the present regime to 
adapt the arbitration act and insolvency code with the evolving scenario-landscape and changing demands of India's corporate sector.

Of the many reforms the Code,2020 introduces, it inaugurally equips the CD to initiate CIRP against other CDs, the ambit of Section 14, and inserts Section 32A to immune the CD and its new management post the resolution process.
The Code, just like any other fledgling legislation, grappled with divergent views of the Courts,and other stakeholders on its interpretation and implementation.

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 AUTHOR: - Adv. Parvindra Nautiyal

Managing Partner At A Biz Chancellor (Advocate, Company Secretary (Aspirant), B.COM Graduate, First Runner-up winner Moot Court Competition Organised by ICSI Noida Chapter)
Mobile No. 8882017384

Disclaimer: This article is reserved for A Biz Chancellor.

No reader should act on the basis of any statement contained herein without seeking professional advice. The results & the interpretation has been done on the basis of my understanding of the Act & Rules, where applicable and with reference to the general articles and analysis. The author explicitly disclaims any financial or other liability of any kind arising on account of any action taken pursuant to the results or interpretation of this document. With respect to information available herein before, the author doesn’t make any warranty, express/implied or assume any liability or responsibility for the accuracy, completeness, or usefulness of such information.

For any help/assistance write us on Abizchancellor@gmail.com

SAGA OF LIMITATION IN THE INSOLVENCY & BANKRUPTCY CODE, 2016

SAGA OF LIMITATION IN THE INSOLVENCY & BANKRUPTCY CODE, 2016

Insolvency & Bankruptcy Code, 2016 (“The Code”) in light of the Limitation Law Applicability of Limitation Law

How the law of limitation would apply to an applicant’s claim as well as claims of other creditor who submit proof of claim before the RP/liquidator.

The Applicability of the Limitation Act,1963 has been a well-traversed issue since the inception of the code

The issue of Applicability of the Limitation Act to proceedings under the code emerged as moot point in the matter of “Neelkanth Township and Construction Pvt. Ltd. v. Urban Infrastructure Trustees Ltd” (Company Appeal (AT) (Insolvency) No. 44 of 2017) wherein the Hon’ble NCLAT, vide its order dated 11.08. 2017 observed that since the Code is not for recovery of claims, so long as the debt is due, application under the Code can be filed regardless of limitation, and as such held that the Limitation Act shall not be applicable for matters under the Code. The above view was again affirmed by the Hon’ble Appellate Tribunal in “Black Pearls Hotel Pvt. Ltd. v Planet M Retail Ltd” (Company Appeal (AT) (Insolvency) No. 91 of 2017)

However, on the contrary Hon’ble NCLAT observed the traditional view that “a time barred debt is not a debt at all”. Having said that must also note that the Hon’ble Apex Court in its landmark judgment in the matter of “Innoventive Industries Ltd. v. ICICI Bank Limited” (2018) 1 SCC 407” held that “a debt may not be due if it is not payable in law or in fact”, from which, one can imply indication towards applicability of limitation law for ascertaining the validity of an application filed under the Code.

Meanwhile, in spirit of the principles of purport of the law of limitation and in light of the confusion of an explicit provision, a counterpart to section 433 of the Companies Act, 2013 was introduced in the Code by way of section 238A w.e.f. 06.06.2018, which stated that:

“238A. Limitation:

The provisions of the Limitation Act, 1963 shall, as far as may be, apply to the proceedings or Appeals before the Adjudicating Authority, the National Company aw Appellate Tribunal, the Debt Recovery Appellate Tribunal, as the case may be.” (Emphasis Supplied)

This States the Limitation provisions are applicable to the proceedings of the law

This gave rise to the landmark judgment of the Hon’ble Apex Court in the matter of “B.K. Educational Services Private Limited v. Parag Gupta & Associates” (Civil Appeal No.23988 of 2017),, wherein the Apex Court held that the Limitation Act will apply to the Code on and from its very commencement i.e. 01.12.2016.

Conflicting Views

Thus, on the contrary The Apex Court in the matter of “Gaurav Hargovindbhai dave v. Reconstruction Company (India)” – (2019) 10 SCC 572 Ltd and reiterated in the matter of the “Jignesh Shah v. Union of India” (2019) 10 SCC 750 observed that proceedings under section 7 of the code are  “an application” and not “suits”, Thus, they would fall within the residuary article of 137 of the Limitation Act. Further, it was observed that right will arise from the date of default not from the date of enactment of the Code i.e 1^st December 2016.

Further, the apex court in the matter of “Sagar Sharma & Anr. v. Phoenix ARC Pvt. Ltd. & Anr”. – Civil Appeal No.7673 of 2019 – (2019) 10 SCC 353 referring to the decision in B.K. Educational Services Private Limited held that for application under Section 7 of the Code, Article 137 of the Limitation Act, 1963 will apply. Article 62, which relates to deed of mortgage executed between the parties, cannot be taken into consideration for counting the period of limitation. The Hon’ble Apex Court specifically observed that Article 141 of the Constitution of India mandates that its judgments are followed in letter and spirit. The date of coming into force of Code does not and cannot form a trigger point of limitation for application filed under the Code.

In the Addition to above the Hon’ble Appellate Tribunal in the matter of “V Hotels Limited v. Asset Reconstruction Company (India) Limited” – Company Appeal (AT) (Insolvency) No.525 of 2019” decided on 11th December, 2019 held that The Books of Account cannot be treated as an acknowledgment of liability in respect of debt payable to the ‘Asset Reconstruction Company (India) Ltd.’- (‘Financial Creditor’) signed by the ‘Corporate Debtor’ or its authorised signatory.

Furthermore, “Sesh Nath Singh & Ors. v. Baidyabati Sheoraphuli Cooperative Bank Ltd”. held that time spent under the proceeding SARFASEI Act can be condoned by the virtue of the Section 14 of the Limitation Act for the purpose of filling the application under the code. It is pertinent to mention that herein that under section 14 only such time can condoned that was spent in bona-fide proceedings.

Thus, concluding to above that take advantage of Section 14(2), the Applicant must satisfy:

(i)                 That the applicant has been prosecuting with due diligence in another civil proceeding, whether in a court of first instance or of appeal or revision.

(ii)                against the same party; and

(iii)             for the same relief

 Conclusion

In view the catena of Judgment passed by the NCLAT and Hon’ble apex court, it can be ascertain that article 137 of the Limitation Act will apply for proceedings filed under the code. Whereas, the interpretation of the term “When the right to apply accrues” wherein the Hon’ble Apex Court and Hon’ble NCLAT have different view regarding the same. However, the Hon’ble apex court affirmed that the right to apply accrues from the date of default irrespective date of enactment of the code

(i)                 Limitation in case of security

A question that arises is what limitation period in cases where a security against the loan has been given by way of a mortgage deed?

As mention above, In the matter Sagar Sharma & Anr. v. Phoenix ARC Pvt. Ltd. & Anr. – Civil Appeal No.7673 of 2019 – (2019) 10 SCC 353 Article 137 of the Limitation Act, 1963 will apply. Article 62, which relates to deed of mortgage executed between the parties, cannot be taken into consideration for counting the period of limitation.

(ii)               Status of an application under IBC filed beyond limitation, on grounds of a pending money suit

Thus, cardinal principle of insolvency is that “corporate insolvency resolution process is not a recovery proceeding”. Referring to above Jignesh Shah v. Union of India held that winding up petition vis-à-vis a money suit is filed significantly different. Therefore, the mere continuance of the money suit does not imply revival/ extension of the limitation period.

(iii)              Determination of period of limitation in case of guarantee contracts

In the matter of “Margaret Lalita Samuel Vs. Indo Commercial Bank Ltd”. (AIR 1979 SC 102)[22], wherein the Hon’ble Supreme Court held that-

“The guarantee is seen to be a continuing guarantee and the undertaking by the defendant is to pay any amount that may be due by the company at the foot of the general balance of its account or any other account whatever. In the case of such a continuing guarantee, so long as the account is a live account in the sense that it is not settled and there is no refusal on the part of the guarantor to carry out the obligation, we do not see how the period of limitation could be said to have commenced running. Limitation would only run from the date of breach under Art. 115 of the schedule to the Limitation Act, 1908.”

(iv)             Whether Acknowledgement of Debts within prescribed period would extent the Limitation Act ?

The Hon’ble Appellate Tribunal in “Vivek Jha v. Dailmer Financial Services India Private Limited & Anr” (Company Appeal (AT) Insolvency No. 756 of 2018)” held that acknowledgment of debts by the Corporate Debtor within prescribed period give rise to new limitation period for the creditor to set out its claim against Debtor under the code.

(v)               Limitation in case of Decree passed by the Tribunal(s)

The Question arise in the matter of “Sh G Eswara Rao v. Stressed Assets Stabilisation Fund” Company Appeal (AT) (Insolvency) No. 1097 of 2019, wherein it was held that in absence of any acknowledgement under Section 18 of the Limitation Act, 1963, the date of default/ NPA does not shift forward, therefore, the period of limitation for moving application under Section 7 of the Code shall be three years,  Thereby, the date of passing of Decree shall not counted as the date of default.

 It is pertinent to mention that the apex court in the aforesaid judgments set aside the decision of the National Company Law Appellate Tribunal on the applicability of article 137 of the Limitation Act from the date of enactment of the code, However, yet National Company Law Appellate Tribunal applying and referring inter-alia different provisions of Limitation Act for instance Article 14 and Article 62 of the Limitation Act. Thus, overriding the ruling of the Apex Court.

IF A GOOD WRITER LIVES INSIDE YOU, THEN MAIL YOUR BIO, PICTURE WITH YOUR BLOG.... WE WILL SHORTLY PUBLISH IT

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AUTHOR: - JAIDEEP BHALLA
PARTNER AT A BIZ CHANCELLOR (ABC)
(A FIRM OF CORPORATE EXPERTS )
(Company Secretary (Aspirant), LL.B, B.COM Graduate, An Investment Portfolio analysts,
First Runner-up winner Moot Court Competition Organised by ICSI Noida Chapter)
Mobile No. 7838684213

Disclaimer: 

No reader should act on the basis of any statement contained herein without seeking professional advice. The results & the interpretation has been done on the basis of my understanding of the Act & Rules, where applicable and with reference to the general articles and analysis. The author explicitly disclaims any financial or other liability of any kind arising on account of any action taken pursuant to the results or interpretation of this document. With respect to information available herein before, the author doesn’t make any warranty, express/implied or assume any liability or responsibility for the accuracy, completeness, or usefulness of such information.

For any help/assistance write us on abizchancellor@gmail.com