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Daily Category  (Economic Development)

Supreme Court Judgment on Rejecting Withdrawal of Resolution Plan Under IBC


  • Supreme Court judgment on rejecting withdrawal of resolution plan under IBC, comes in the wake of separate appeals filed by three different companies.


Key Details:

  • The Supreme Court’s ruled that an insolvency resolution plan, once approved by the Committee of Creditors (CoC), cannot be allowed to be withdrawn or modified.

  • The judgment comes in the wake of separate appeals filed by three different companies.

  • They had all sought to either withdraw their plans after approval, or sought to modify the same.

Why did the companies want to withdraw their resolution plan after CoC approval?

  • Of the three companies, one cited reason of reports of mismanagement and money laundering against the company while other cited termination of a power purchase agreement earlier signed by the company, as a reason for withdrawal of resolution.

What does NCLT and NCLAT say on withdrawal on CoC approved resolution plans?

  • Though the NCLT had twice rejected the withdrawal application filed by Ebix, it had approved the same the third time, which was subsequently overturned by the National Company Law Appellate Tribunal (NCLAT).

  • The NCLT, allowing the withdrawal had held that though a resolution plan becomes binding after it is approved, since Ebix was a “unwilling successful resolution applicant”, it would be unable to effectively implement the said resolution plan.

  • The NCLAT, however, overturned this order and said that NCLT did not have the jurisdiction to permit withdrawal after the plan had been approved by the CoC.

Supreme Court Judgment

  • The SC has categorically said that the only process of withdrawal from IBC is by following the procedure detailed in Section 12A, which says that the corporate debtor must get approval of more than 90 per cent of creditors to take the company out of the resolution plan.

  • Enabling withdrawals or modifications of the Resolution Plan would create another tier of negotiations which will be wholly unregulated by the statute.

Insolvency and Bankruptcy Code (IBC):

  • The Insolvency and Bankruptcy Code, 2016 (IBC) is the bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy.

  • The bankruptcy code is a one stop solution for resolving insolvencies.

  • It offers an economically viable arrangement.

  • The code aims to protect the interests of small investors and make the process of doing business less cumbersome.

  • The main reason to introduce this bill was to fasten up the long insolvency process.

Key features:

  • Insolvency Resolution:

    • The Code outlines separate insolvency resolution processes for individuals, companies and partnership firms.

    • The process may be initiated by either the debtor or the creditors.

    • A maximum time limit, for completion of the insolvency resolution process, has been set for corporates and individuals.

    • For companies, the process will have to be completed in 180 days, which may be extended by 90 days, if a majority of the creditors agree.

    • For startups (other than partnership firms), small companies and other companies (with asset less than Rs. 1 crore), resolution process would be completed within 90 days of initiation of request which may be extended by 45 days.

    • The Insolvency and Bankruptcy Code (Amendment) Act, 2019 has increased the mandatory upper Time limit of 330 days.

  • Insolvency regulator:

    • The Code establishes the Insolvency and Bankruptcy Board of India (IBBI).

    • The Board will have 10 members, including representatives from the Ministries of Finance and Law, and the Reserve Bank of India.

  • Insolvency professionals:

    • The insolvency process will be managed by licensed professionals.

    • These professionals will also control the assets of the debtor during the insolvency process.

  • Allowing the withdrawal:

    • The Code proposes two separate tribunals:

      1. The National Company Law Tribunal (NCLT) for Companies and Limited Liability Partnership firms; and

      2. The Debt Recovery Tribunal for individuals and partnerships.

Source: Indian Express

The PayPal-Paidy Deal, and Interest in The ‘Buy Now, Pay Later’ Space


  • PayPal is buying Paidy, a 'buy now, pay later' firm, for $2.7 billion.

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Key Details:

  • American payment giant PayPal has agreed to buy Japanese BNPL firm Paidy for $2.7 billion.

  • In recent times, this is second big deal for purchase of BNPL segment firm.

  • Last month Australia’s Afterpay was acquired by twitter CEO Jack Dorsey’s ‘Square’ for $29 billion.

What is Buy Now Pay Later (BNPL)?

  • BNPL model has evolved over the years as a payment option to buy goods & services online through small-sized credits.

  • In this model, unsecured loans are extended to online shoppers on the lines of a credit card but these are smaller in amount and have a shorter repayment schedule.

  • Over past year and half, due to pandemic BNPL companies across the world have seen a boom in their business.

  • Experts suggest this is happening on account of the stimulus money being pumped in the system by the US government, particularly because of diminished spending capabilities caused by Covid-19 pandemic.


  • Over past few years, BNPL has become a prominent financing form.

  • It has emerged as a more convenient payment method essentially decreasing the financial burden on borrowers by offering no cost EMIs.

  • BNPL plays critical role in overcoming demand shock of economy.

  • Today, BNPL sector is present across the Globe & growing at a considerable pace.

Why PayPal bought Paidy?

  • This move will expand PayPal’s capabilities, distribution & relevance in the domestic payment market in Japan which is 3rd largest e-commerce market.

  • PayPal noted that shopping volume in Japan has more than tripled to around $200 billion in last decade, but more than 2/3rd of all purchase are still paid in cash, thereby presenting a huge opportunity for BNPL to proliferate there.

Is BNPL prevalent in India?

  • Yes, there are many BNPL wallets operating in India in various segments like e-Commerce, Grocery and food delivery platforms.

  • Some of these BNPL players are: Lazy Pay, Zest money, Paytm Postpaid, Simpl, Amazon Pay, ICICI Bank (Pay Later Service).

  • Goldman Sachs has predicted that BNPL will rise to become the fastest growing online payment option, with its market share growing from 3% now to 9% in 2024.

  • India’s e-commerce is poised to reach US$ 99 billion by 2024.

E-commerce is the buying and selling of goods and services over the internet.

Top e-Commerce market of the world-

  • China
  • USA
  • Japan
  • United Kingdom
  • Germany
  • France

Source: Indian Express

Why did NCLAT Term The Devas-Antrix Agreement as Fraud


  • The National Company Law Appellate Tribunal (NCLAT) has upheld an order of the Bengaluru bench of the National Company Law Tribunal (NCLT) to wind up Devas Multimedia Private. The appellate tribunal has also said that it was apparent that a fraud had occurred.


  • In 2005, Antrix corporation had signed an agreement to lease two communication satellites to Devas for 12 years for Rs 167 crore.

    • ANTRIX is the commercial arm of the ISRO, and its entire shareholding is with the Government of India.

  • Devas, which then was a startup incorporated just for the purpose, was to provide audio-video services to mobile platforms in India using the space or S-band on ISRO’s GSAT 6 and 6A satellites.

  • The Devas Multimedia-Antrix Corp agreement was cancelled by the then UPA government in 2011 after allegations of the deal being a quid pro quo “sweetheart deal” were raised.

  • In 2014, the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) were asked to probe the deal.

  • CBI and Enforcement Directorate have unearthed fraud in executing the agreement.

  • CBI had later filed chargesheets and ED had initiated PMLA proceedings.

  • The Ministry of Corporate Affairs (MCA) had also initiated an investigation into the affairs of Devas Multimedia but a stay was granted by the Delhi High Court.

Key points:

  • The NCLAT upheld the earlier order of the Bengaluru bench of the National Company Law Tribunal (NCLT), which had on May 25, 2021 directed winding up of Devas Multimedia and appointed a provisional liquidator for the purpose.

  • NCLT's direction had come over a petition filed by Antrix Corporation.

  • The NCLT had said Devas Multimedia was incorporated with a fraudulent motive to collude and connive with the then officials of Antrix Corporation to get bandwidth from it by entering into an agreement in 2005, which was subsequently cancelled by the government.

See the source image

Why does the NCLAT order say that the Devas-Antrix agreement was a fraud?

  • One of the major findings of NCLAT in its order is that every benefit or advantage accrued to Devas under the 2005 agreement was “through fraud, misrepresentation or suppression”.

  • The NCLAT has also said that while the key personnel involved in the fraud remained out of limelight all the while, they came to the fore to commit the fraud only after the agreement was signed.

  • The 2005 agreement was signed by a clerk who had no background in science and technology, and was not at all aware of the functions of Devas’ services.

  • The clerk was just given a “remuneration for signing the agreement”.

  • The NCLAT has also placed the Antrix Corporation’s due diligence in the docket and questioned as to how it allowed the said agreement to be signed by a clerk.

National Company Law Appellate Tribunal (NCLAT)

  • NCLAT was constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of National Company Law Tribunal(s) (NCLT), with effect from 1st June, 2016.

  • It hears appeals against the orders of:

    • NCLT under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC).

    • Insolvency and Bankruptcy Board of India under Section 202 and Section 211 of IBC.

    • The Competition Commission of India (CCI).


  • The President of the Tribunal and the chairperson and Judicial Members of the Appellate Tribunal shall be appointed after consultation with the Chief Justice of India.

  • The Members of the Tribunal and the Technical Members of the Appellate Tribunal shall be appointed on the recommendation of a Selection Committee consisting of:

    • Chief Justice of India or his nominee: Chairperson.

    • A senior Judge of the Supreme Court or a Chief Justice of High Court: Member.

    • Secretary in the Ministry of Corporate Affairs: Member.

    • Secretary in the Ministry of Law and Justice: Member.

    • Secretary in the Department of Financial Services in the Ministry of Finance: Member.


  • Chairperson: Judge of the Supreme Court or Chief Justice of the High Court.

  • Judicial Member: A judge of a High Court or is a judicial member of a tribunal for 5 years or more.

  • Technical member– Person with proven ability, integrity and standing having special knowledge and experience of 25 years or more (in specified areas).


  • Term of office of chairperson and members is 5 years and they can be reappointed for additional 5 years.

Source: The Indian Express

Manda Buffalo Gets ‘Unique Breed’ Tag


  • Odisha’s Manda buffalo, mostly found in Koraput district and adjoining areas of Malkangiri and Nabarangpur, has been recognised as an indigenous breed by the National Bureau of Animal Genetic Resources (NBAGR).

Key points:

  • The National Bureau of Animal Genetic Resources (NBAGR) has declared it as the 19th unique breed of buffaloes found in the country.

  • The NBAGR, affiliated to Indian Council of Agriculture Research, made an assessment and recognised it as an indigenous and unique breed.

    • The establishment of ICAR- National Bureau of Animal Genetic Resources/Institute of Animal Genetics was approved in principle during IV Five-Year-Plan.

    • The Institute was set up on 21st September, 1984 at the campus at National Dairy Research Institute (Southern Regional Station), Bangalore.

  • This buffalo germ-plasm was first identified through a survey conducted by the Animal Resource Development (ARD) department of Odisha in collaboration with the Orissa University of Agriculture and Technology (OUAT).

  • Four breeds of cattle — Binjharpuri, Motu, Ghumusari and Khariar — and two breeds of buffalo — Chilika and Kalahandi — and one breed of sheep, Kendrapada, have already received NBAGR recognition.

About Manda buffalo:

  • The Manda is resistant to parasitic infections, less prone to diseases and can thrive on modest resources.

  • The buffalo has ash grey and grey coat with copper colour hair.

  • The lower part of the legs upto elbow is light coloured with copper colour hair at the knee. Some animals are silver white in colour.

  • Average milk yield of these buffaloes is 2 to 2.5 litres in single milking with more than 8 per cent fat. However, a few of those yield upto four litres.

  • Manda buffaloes mature at around 3 years and drop the first calf at around 4 years.

  • Every 1.5 to 2 years they give birth to a calf for the whole life of around 20 years.

See the source image

Economic significance:

  • Manda buffaloes are small-sized, sturdy animals and both male and female are used for ploughing agricultural land in the native tracts of Koraput, Malkangiri and Nabarangpur districts in southern Odisha.

  • There are around 100,000 buffaloes of this breed in the native tracts mostly contributing to the family nutrition of the households.

  • With national recognition of Manda buffalo, all efforts will be made by the government of Odisha and Government of India to conserve this unique buffalo genetic resource of Odisha.

  • Efforts will be made to enhance their productivity through breeding strategy and market the produce — milk, curd, ghee — at a premium price resulting improvement of stakeholders in the native tract.

Source: The Hindu

A New Code of Conduct for Creditors Under IBC


  • What is the need for a code of conduct for the CoC, and what are key issues raised in the proposed policy?

Key Details: