Insolvency Law

[By Gayathri Balasubramanian] The author is a student at the Christ (Deemed to be) University, Bangalore. Introduction: The concept of moratorium is one of the Insolvency and Bankruptcy Code’s (the Code) most fundamental aspects. It is provided for under section 14 of the Code and is considered as a crucial concept which effectively brings to halt any simultaneous proceedings brought against the corporate debtor during the corporate insolvency resolution process. This is done in order to prevent any further legal and financial hurdles to the distressed corporate debtor and to ensure its survival during the insolvency proceedings. Since the enactment of the Insolvency and Bankruptcy Code in 2016, the courts have expanded the scope of the provision by bringing different types of legal proceedings under the ambit of the provision. Several such notable judgments and the implications on the scope of the provision will be dealt with in this article to analyse whether they have a positive or negative impact on the corporate insolvency resolution process. Judicial interpretation of the scope of Section 14: Section 14 can be understood as a vast shield that protects the corporate debtor during the Corporate Insolvency Resolution Process from further legal and financial hurdles. Its because of this broad ambit of the provision that the Courts have time and again decided on the ambit of the provision to ensure that moratorium does not unduly favour the corporate debtor. In the landmark judgment of P. Mohanraj V. Shah Bros. Ispat (P) Ltd., the court addressed a crucial legal conundrum i.e., whether the declaration of moratorium would extend to institution of criminal proceedings against the corporate debtor under section 138 of the Negotiable Instruments Act, 1881. The court began with addressing the issue by laying out the nature of the broad scope of the provision. Given that the terms provided under the provisions are to be interpreted in a broad manner, it was held that the term “proceedings” under section 14 would indeed include a section 138 proceeding under the Negotiable Instruments Act, 1881. It further added that drawing a technical difference between a civil suit and a section 138 proceeding would prove futile since the impact of both on the corporate debtor during the resolution process remain the same. It however pointed out that this protection would not extend to the personal liability of natural persons who are liable under the Negotiable Instruments Act, 1881. Although the judgment would be a step in the right direction, in the event the persons-in-charge or directors of the corporate debtor are directed to deposit money in the form of interim compensation, it would give rise to a new legal conundrum and result in more legal battles. The court followed the aforementioned ratio in Shah’s case in the case of Anjali Rathi V. Today Homes & Infrastructure Private Limited, where it reiterated that moratorium under section 14 does not extend to promoters of the corporate debtor. This principle of extending the protection to the corporate debtor yet at the same time not absolving the personal liability of natural persons lies at the core of the rule of separate corporate personality, and balances the interests of the corporate debtor as well as the party seeking relief under the Negotiable Instruments Act, 1881. Based on the same principle, the court in Alpha and Omega Diagnostics (India)Ltd. V Asset Reconstruction Company of India held that the personal property of the promoters given as bank security would not fall within the purview of section 14, thus drawing a clear line between the corporate debtor and its promoters. The same was reiterated in the case of Schweitzer Systemtek India Pvt. Ltd v. Phoenix ARC Pvt. Ltd. & Ors., where the applicability of section 14 was not extended to the property of the personal guarantor. On the contrary, the court gave a different ruling in State Bank of India v. V Ramakrishnan and Veesons Energy Limited, where it held that the moratorium under section 14 would not just apply for the corporate debtor, but also on the personal guarantor. The court based this rule on the reasoning that the personal guarantor being involved in the resolution process and bound by the order of the court, would also be included under the ambit of section 14. This judgment re-created the ambiguity regarding the liability of the personal guarantor. However, on appeal, the Supreme Court set aside the NCLAT order and reiterated the principle of co-extensiveness of the liability of the personal guarantor and the corporate debtor. These minor inconsistencies are rather inevitable, given the extensively broad scope of section 14; Although, a bare reading and a strict interpretation of the provision would clearly indicate that the moratorium applies only in the context of any proceedings of the corporate debtor and no other body/person. Perhaps, these judicial interpretations were required given that the Code was in its nascent stage and still is, constantly evolving and such judicial reiterations give more clarity to the stakeholders. Moratorium vis-à-vis Writ Jurisdiction and Arbitral Proceedings: In Canara Bank vs. Deccan Chronicle Holdings Limited, it was laid down that the power of the Hon’ble Supreme Court under Articles 32 and 136 of the Constitution of India, as well as the power of the Hon’ble High Courts under Articles 226 and 227 of the Constitution of India, shall be unaffected by the moratorium. Rightly so, this decision emphasised the supremacy of constitutional provision over the Code. However, it was laid down by the Hon’ble NCLAT that a suit for recovery filed against a corporate debtor before the the High Courts having original jurisdiction would be barred by section 14. As regards arbitral proceedings, it is fairly settled that arbitral proceedings, including a petition under section 34 of the Arbitration and Conciliation Act, 1996 would be hit by section 14. Even a section 37 petition is barred upon declaration of moratorium, as was laid down in the case of Alchemist Asset Reconstruction Co. Ltd. V. Hotel Gaudavan P. Ltd.Interestingly, a peculiar question on

[By Vaishnavi Patel & Himangini Mishra]  The authors are students at the Gujarat National Law University, Gandhinagar.  Introduction On 18th January 2022, the Supreme Court in its landmark judgment, Bank of Baroda and Anr. v. MBL infrastructures Limited clarified the scope of ineligibility of a personal guarantor as a Resolution Applicant (“RA”) under section 29A(h) of the Insolvency and Bankruptcy Code, 2016 (“Code”) . The court held that guarantee invoked by a creditor will operate in rem in relation to all the similarly placed Creditors.  Section 29A of the Code enumerates ineligibility criteria to prohibit RA to participate in a Corporate Insolvency Resolution Process (“CIRP”). Sub-section (h) of section 29A of the Code provides for disqualification of a guarantor who has executed a guarantee in favour of a creditor. The provision has been fraught with lacunas in terms of its scope, and needs clarification. In this article, the authors will discuss the jurisprudence surrounding Section 29A of the Code and critically analyze the recent Supreme Court decision. The authors will then discuss the implications of the judgment on a guarantor’s liability under the Code. Factual background RBL Bank and a few of the financial creditors invoked the guarantee of the personal guarantor and issued a notice under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act, 2002. Subsequently, RBL Bank filed a petition under section 7 of the Code to initiate CIRP against MBL Infrastructures Limited. Thereafter, the Resolution Professional received two resolution plans, one of which was submitted by the personal guarantor. The resolution plan was submitted prior to the insertion of section 29A of the Code. However, before the Committee of Creditors (“CoC”) could take any decision on the resolution plan submitted by the personal guarantor, section 29A of the Code was introduced. In view of this development, the personal guarantor filed an application in NCLT for an order to the effect that it does not attract any disqualification under sub-section (c) and (h) of 29A of the Code. NCLT also held that as per section 29A (h) of the Code, RA will not be disqualified for merely extending personal guarantee, if such guarantee has not been invoked. It also went on to note that such disqualification will not be attracted even when certain creditors have invoked the guarantee extended by RA. CoC, thus, voted on the resolution plan of RA. However, the plan did not receive the requisite votes. Thereafter, RA filed an application under section 60 of the Code for directing the dissenting creditors to support the resolution plan. Consequently, the resolution plan was approved by CoC. Meanwhile, another amendment to section 29A(h) of the Code took effect in 2018 (supra), looming disqualification on RA. However, NCLT held that the issue in relation to section 29A(h) of the Code has already been concluded. It, thereby, directed that the resolution plan approved by CoC shall come into effect. This order was then challenged in the Supreme Court. Ever-evolving jurisprudence on section 29A Dynamic nature of the Code makes the committee reports and judicial opinions indispensable in furthering our understanding of the Code. The Insolvency Law Committee Report in 2018 while discussing Section 29A (h) of the Code questioned if the intent behind the provision was to disqualify a guarantor only where the guarantee had been invoked or if the provision sought to disqualify the guarantor even when the guarantee had not been invoked. Therefore, the ambiguities inherent in the interpretation of the provision were required to be clarified. It was observed that the provision could not have intended to disqualify a guarantor merely for issuing an “enforceable” guarantee. Accordingly, the committee recommended that the word “enforceable” ought to be removed from clause (h) and the phrase “and such guarantee has been invoked by the creditor and remains unpaid in full or part by the guarantor” should be added to the said clause. The committee, rightfully, recognised the discriminatory nature of sub-section (h). Accordingly, the said recommendations were implemented by way of an amendment in 2018. The courts have emphasised on adopting a purposive interpretation of the Code. In order to define the scope of the section, the Apex Court in Arcelormittal India Private Limited v. Satish Kumar Gupta considered the meaning of the terms “control” and “management”. Pursuantly, the court held that the intention behind the inclusion of section 29A of the Code was to prevent a backdoor entry of those in control or management who drove the corporate debtor to the doors of insolvency in the first place. The section gained another dimension in Arun Kumar Jagatramka v. Jindal Steel And Power Ltd. which laid down that a person ineligible to be RA under the Code was also ineligible from entering a compromise under the provisions of the Companies Act, 2013. Thus, section 29A of the Code was interpreted as a critical link in assuring that the Code’s objectives were not thwarted by permitting “ineligible persons” to return in a new form of RA, including but not limited to those in management. In RBL Bank Ltd. v. MBL Infrastructures Ltd., NCLT bench of Kolkata specifically looked into meaning and significance of sub-section (h) of section 29A of the Code. Guarantors who may be regarded to be excluded from sub-section (h) of section 29A of the Code only include those who have antecedents possibly jeopardizing the reliability of the processes under the Code. Thus, the sub-section doesn’t exclude the entire class of guarantors. Further, following in the footsteps of the insolvency committee, the tribunal observed that the word “enforceable” in the section should be aligned with the objectives of the Code. The phrase should not be understood in its ordinary or literal sense. As law couldn’t be allowed to operate in vacuum and penalise the guarantors who weren’t provided a chance to make good of the dues by invocation of guarantee. Another decision of NCLT in Punjab National Bank v. Concord Hospitality (P.) Ltd. is pertinent to be discussed on this aspect.

[By Gayathri Balasubramanian] The author is a student at the Christ (Deemed to be) University, Bangalore. Introduction: The concept of the moratorium is one of the Insolvency and Bankruptcy Code’s (the Code) most fundamental aspects. It is provided for under section 14 of the Code and is considered as a crucial concept that effectively brings to halt any simultaneous proceedings brought against the corporate debtor during the corporate insolvency resolution process. This is done in order to prevent any further legal and financial hurdles to the distressed corporate debtor and to ensure its survival during the insolvency proceedings. Since the enactment of the Insolvency and Bankruptcy Code in 2016, the courts have expanded the scope of the provision by bringing different types of legal proceedings under the ambit of the provision. Several such notable judgments and the implications on the scope of the provision will be dealt with in this article to analyse whether they have a positive or negative impact on the corporate insolvency resolution process. Judicial interpretation of the scope of Section 14: Section 14 can be understood as a vast shield that protects the corporate debtor during the Corporate Insolvency Resolution Process from further legal and financial hurdles. It’s because of this broad ambit of the provision that the Courts have time and again decided on the ambit of the provision to ensure that moratorium does not unduly favour the corporate debtor. In the landmark judgment of P. Mohanraj V. Shah Bros. Ispat (P) Ltd., the court addressed a crucial legal conundrum i.e., whether the declaration of the moratorium would extend to the institution of criminal proceedings against the corporate debtor under section 138 of the Negotiable Instruments Act, 1881. The court began with addressing the issue by laying out the nature of the broad scope of the provision. Given that the terms provided under the provisions are to be interpreted in a broad manner, it was held that the term “proceedings” under section 14 would indeed include a section 138 proceeding under the Negotiable Instruments Act, 1881. It further added that drawing a technical difference between a civil suit and a section 138 proceeding would prove futile since the impact of both on the corporate debtor during the resolution process remain the same. It however pointed out that this protection would not extend to the personal liability of natural persons who are liable under the Negotiable Instruments Act, 1881. Although the judgment would be a step in the right direction, in the event the persons-in-charge or directors of the corporate debtor are directed to deposit money in the form of interim compensation, it would give rise to a new legal conundrum and result in more legal battles. The court followed the aforementioned ratio in Shah’s case in the case of Anjali Rathi V. Today Homes & Infrastructure Private Limited, where it reiterated that moratorium under section 14 does not extend to promoters of the corporate debtor. This principle of extending the protection to the corporate debtor yet at the same time not absolving the personal liability of natural persons lies at the core of the rule of separate corporate personality, and balances the interests of the corporate debtor as well as the party seeking relief under the Negotiable Instruments Act, 1881. Based on the same principle, the court in Alpha and Omega Diagnostics (India)Ltd. V Asset Reconstruction Company of India held that the personal property of the promoters given as bank security would not fall within the purview of section 14, thus drawing a clear line between the corporate debtor and its promoters. The same was reiterated in the case of Schweitzer Systemtek India Pvt. Ltd v. Phoenix ARC Pvt. Ltd. & Ors., where the applicability of section 14 was not extended to the property of the personal guarantor. On the contrary, the court gave a different ruling in State Bank of India v. V Ramakrishnan and Veesons Energy Limited, where it held that the moratorium under section 14 would not just apply for the corporate debtor, but also on the personal guarantor. The court based this rule on the reasoning that the personal guarantor being involved in the resolution process and bound by the order of the court, would also be included under the ambit of section 14. This judgment re-created the ambiguity regarding the liability of the personal guarantor. However, on appeal, the Supreme Court set aside the NCLAT order and reiterated the principle of co-extensiveness of the liability of the personal guarantor and the corporate debtor. These minor inconsistencies are rather inevitable, given the extensively broad scope of section 14; Although, a bare reading and a strict interpretation of the provision would clearly indicate that the moratorium applies only in the context of any proceedings of the corporate debtor and no other body/person. Perhaps, these judicial interpretations were required given that the Code was in its nascent stage and still is, constantly evolving and such judicial reiterations give more clarity to the stakeholders Moratorium vis-à-vis Writ Jurisdiction and Arbitral Proceedings: In Canara Bank vs. Deccan Chronicle Holdings Limited, it was laid down that the power of the Hon’ble Supreme Court under Articles 32 and 136 of the Constitution of India, as well as the power of the Hon’ble High Courts under Articles 226 and 227 of the Constitution of India, shall be unaffected by the moratorium. Rightly so, this decision emphasised the supremacy of constitutional provision over the Code. However, it was laid down by the Hon’ble NCLAT that a suit for recovery filed against a corporate debtor before the the High Courts having original jurisdiction would be barred by section 14. As regards arbitral proceedings, it is fairly settled that arbitral proceedings, including a petition under section 34 of the Arbitration and Conciliation Act, 1996 would be hit by section 14. Even a section 37 petition is barred upon declaration of the moratorium, as was laid down in the case of Alchemist Asset Reconstruction Co. Ltd. V. Hotel Gaudavan P. Ltd.Interestingly,

[By Ankit Sharma]  The author is a student at the Jindal Global Law School, Sonipat. Introduction The withdrawal of resolution plans under The Insolvency and Bankruptcy Code 2016 (“Code”), had always been a contentious issue, with the NCLTs and NCLAT taking conflicting positions in the past. In the recent case of Ebix Singapore Private Limited v. Committee of Creditors of Educomp Solutions Limited (“Ebix Singapore”), the Supreme Court settled the conundrum and held that if a resolution plan had been approved by the Committee of Creditors (“CoC”), then modifying or withdrawing it would not be permissible. While a time-bound insolvency process is certainly an objective of the Code, to disregard certain circumstances which may warrant a successful resolution applicant to backtrack from his commitment, would not be prudent. This article seeks to analyse the Supreme Court’s judgement, in view of the precedents set and contends that the legislature must provide for certain exceptions wherein the withdrawal of a resolution plan may be permitted. Background Interestingly, no provision in the Code explicitly permits the withdrawal or modification of the resolution plan. Yet in Panama Petrochem Ltd. v. Aryavart Chemicals Private Limited (“Panama Petrochem”), the NCLT remarked that although such withdrawals must not be encouraged, they may be accepted due to the “totality of the circumstances.” In the case, the same included another resolution plan being approved by the CoC and the backing out of the resolution applicant’s joint investor, who had agreed to invest in the corporate debtor. Further, in Committee of Creditors of Metalyst Forging Ltd. v. Deccan Value Investors LP (“Metalyst Forging”), the NCLAT noted that the resolution applicant had been provided with misleading information about the production capacity and the feasibility of the corporate debtor, when the plan was approved by the CoC. It was observed that the Code did not offer the NCLT any means to compel the specific performance of a resolution plan by an unwilling resolution applicant. Since the resolution professional was required to present the true and updated information, the plan itself contravened Section 30(2)(e) of the Code. Accordingly, the resolution plan was allowed to be withdrawn. In Suraksha Asset Reconstruction Ltd. v. Shailen Shah(“Suraksha Asset”), the NCLT held that if a resolution plan was not approved by the Adjudicating Authority within a reasonable period, then the resolution applicant could withdraw the resolution plan under Section 60(5)(c) of the Code. This would have balanced the interests of all the stakeholders and mitigated their difficulties. However, the judgement was soon overturned in Committee of Creditors of Wind World (India) Ltd. v. Suraksha Asset Reconstruction Ltd., in view of the Ebix Singapore case. Notably, contrasting views had been taken by the tribunals as well. In Kundan Care Products Ltd. v. Amit Gupta, the NCLAT opined that the Code did not have any provision that could enable a successful resolution applicant to take a “U-turn” and thwart the entire exercise of the CIRP. The move could have devastating consequences, as the CIRP period may be nearing its end, which could push the corporate debtor into liquidation. In the case of Committee of Creditors of Educomp Solutions Ltd. v. Ebix Singapore Pte. Ltd, the NCLAT noted that the resolution plan, once approved by the CoC, cannot be withdrawn. Further, the Supreme Court in Maharashtra Seamless Limited v. Padmanabhan Venkatesh, stated that the NCLT cannot withdraw a CoC approved resolution plan and can only assess it under Section 31(1) of the Code. The Ebix Singapore Case The Apex Court was hearing a batch of three appeals, wherein the resolution plans submitted to the NCLT in three different Corporate Insolvency Resolution Processes (“CIRP”), were sought to be withdrawn. On a careful analysis, it was held that when the CoC approves a resolution plan, it cannot be modified or withdrawn by the successful resolution applicant, even though it may be pending for approval before the Adjudicating Authority. In its verdict, the court delved into several aspects of the Code. With regards to the purpose of the insolvency law, the Supreme Court observed that it could not create a substantive or procedural remedy that the Statute had not specified, for it would not only be encroaching upon the legislature’s domain but also harming the delicate co-ordination under the Code. On the aspect of the nature of resolution plans, the Supreme Court held that it was not the same as traditional contracts. This was on the grounds that the Code governed to a great extent, the insolvency process, the mode, and effect of approval, and the fact that it could bind such parties who had not consented to it. Since the resolution plans were brought into existence by the framework provided under the Code and were not described as contracts therein, they also did not qualify as statutory contracts. With respect to the withdrawal of resolution plans, the Supreme Court noted that the Code only provided for the withdrawal of applications to initiate the CIRP under Section 7, 9 and 10 of the Code, through its Section 12A. As such, the lack of any exit route for a successful resolution applicant under the Code indicated that the same should not be permitted. Further, the language of Section 31(1) of the Code could not be interpreted to signify that a resolution plan can be withdrawn or modified prior to its approval by the NCLT. The Court held that by submitting a resolution plan, a resolution applicant is assumed to have gone through the information memorandum and understood the financial risks. A withdrawal or modification of the resolution plan cannot happen later, as it would disrupt the timeline for the insolvency process under the Code and represent a remedy, which the legislature had not provided for. Consequently, resolution plans with clauses for re-negotiations or walk-away rights cannot be implemented. Even the residuary power under Section 60(5)(c) of the Code cannot be utilised for withdrawing or modifying a CoC approved resolution plan. Analysis The Parliament’s Standing Committee on Finance in its recent report observed that 71%

[By Varuni Agarwal]  The author is a student at the National Law University, Odisha.  INTRODUCTION Section 7 of the Insolvency Bankruptcy Code (“IBC”) empowers a financial creditor to initiate a Corporate Insolvency Resolution Process against the Corporate Debtor on account of default. As per Section 5(7) of IBC, a financial creditor means a creditor against whom the Corporate Debtor owes a financial debt. Section 5(8), defining financial debt, has a principal term stating “a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes”, and sub-clauses (a) to (i) stating some credit situations. In July 2021, in the case of Orator Marketing v. Samtex Desinz (“Orator judgment”), the Supreme Court discussed the legal issue of whether a secured creditor, giving an interest-free loan, would qualify as a financial creditor. The article critically analyzes the core findings of the Court and its contradiction with the established judicial precedents. UNDERSTANDING THE JUDGEMENT M/sSameer Sales Pvt. Ltd. advanced a term loan of Rs. 1.60 crores to M/s Samtex Desinz Pvt. Ltd., the Corporate Debtor, without any interest for a period of two years from the date of execution of the Loan agreement to meet its working capital requirement. The creditor went on to initiate the Corporate Insolvency Resolution process through Section 7 of IBC. The NCLT and NCLAT held that the creditor is not a financial creditor.  However, the Hon’ble Apex Court held that Hon’ble NCLAT and NCLT have misconstrued the definition of ‘Financial Debt’ and have read it in isolation and analyzed the definition of ‘Financial Debt’. CRITICAL ANALYSIS OF THE JUDGEMENT FLAWED ANALYSIS OF TIME VALUE OF MONEY The bench has based its decision on 2 findings. Firstly, while interpreting the terms ‘means and included’, it determined that Section 5(8) of IBC has 2 separate categories that are qualified to be called ‘financial debt’. The first one is ‘disbursed against consideration of time value of money, and the second includes those situations that are mentioned in sub-clauses (a) to (i) of the sub-section. Secondly,it had particularly covered the case-at-hand as a transaction under Section 5(8)(f), due to the transaction having “commercial effect of borrowing”, and interpreting the meaning of the phrase. With respect to the first finding, the bench does not seem to have followed the 2020 Supreme Court judgment inAnuj Jainvs. Axis Bank Limited (“Anuj Jain judgment”). The Anuj Jain judgment had categorically held and clarified that “any of the transactions stated in the said sub-clauses (a) to (i) of Section 5(8) would be falling within the ambit of ‘financial debt’ only if it carries the essential elements stated in the principal Clause or at least has the features which could be traced to such essential elements in the principal clause”. This means that while the nature of the transaction may be of any kind, including those as mentioned in sub-section (a) to (i), the same must have an element of the time value of money, mentioned in the principal part of the sub-section. Thus, this deviation from the settled principle of law seems uncalled for. While establishing the first finding, the Court went on to classify the present case as having “commercial effect of borrowing”. It relied on the fact that the loan was taken for fulfilling CD’s working capital requirements, thus having a commercial effect. However, the Court in Pioneer Urban Land and Infrastructure Limited v. Union of India construed the meaning of ‘commercial’ as transactions having profit as their main aim. Further, Explanation 1 of Section 5(8) classifies the real estate projects as having “commercial effect of borrowing” on the pretext that the real estate developer profits on the sale of the apartment, and the flat/apartment purchasers profits by the sale of the apartment. The essence of the argument is that in the case of a loan, the ‘commercial interest’ would exist only when the creditor receives something in return that puts them in a beneficial position than before. Examining the present case, the creditor neither had a security interest over the Corporate Debtor’s property nor was receiving any interest. Thus, the creditor was essentially not receiving any additional amount which would have financially put them in a beneficial position than before giving the loan. On the contrary, without having a provision of the time value of money and mandating payment of interest of the repayment, the lender is essentially being put at an adverse level than before, due to general depreciation in the value of money during that loan period. Hence, the “commercial effect of borrowing” clearly did not exist in this case, and reading the provision independent of the principal condition of “disbursed against consideration of time value of money”is a wrong construction. CONTRADICTING FEBRUARY 2021 JUDGMENT ON SIMILAR LEGAL ISSUE On February 3, 2021, the Supreme Court pronounced its judgment in Phoenix Arc Ltd. v. KetulBhai (“Phoenix judgment”), explicitly holding that the secured creditor, having given a loan without interest, will not fall under the definition of financial creditor under Section 5(8). With the Court holding that interest-free loans will also qualify as financial debt, the Orator judgment seems to go in total contradiction of the Phoenix judgment. Interestingly, having been pronounced prior to, and discussing the similar legal issue as, the Orator judgment, the Court had not referred and discussed the Phoenix judgment in the present case, let alone follow the same. Further, the creditors in the Phoenix judgment specifically argued that their case falls under Section 5(8)(b) dealing with credit facility, independent of the concept of time value of money. However, the Court rejected the submission, holding that the loan must have an essence of the principal terms, in order to be qualified as “financial debt”, whereas, the Orator judgment specifically opposed this position. Consequently, since the Phoenix judgment is not even explicitly overruled, this gives in confusion as to what the position of the law stands for Section 5(8) of IBC. CAN WORKING CAPITAL BE USED AS A LOOPHOLE? Working