Introduction

Prospect Legal is a premier law firm specializing in insolvency, restructuring, and contract law, offering strategic solutions to businesses navigating complex financial and contractual challenges. With over 15 years of expertise, our team of seasoned attorneys has successfully represented clients in high-stakes cases before the National Company Law Tribunal (NCLT), courts, and arbitration forums. We assist businesses in mitigating risks arising from insolvency proceedings, contract breaches, and corporate disputes, ensuring compliance with the Insolvency and Bankruptcy Code (IBC), 2016, and the Indian Contract Act, 1872. Our proactive approach combines legal acumen with commercial pragmatism, empowering clients to safeguard their interests and achieve sustainable outcomes.

Where You Can Find Remedies?

Legal remedies for insolvency and contract disputes are adjudicated by:

• National Company Law Tribunal (NCLT): Primary authority for corporate insolvency (CIRP), winding-up petitions, and approval of resolution plans under the IBC.
• Debt Recovery Tribunals (DRTs): Handle debt recovery cases under the Recovery of Debts and Bankruptcy Act, 1993.
• Arbitration Tribunals: Resolve contractual disputes as per arbitration clauses.
• High Courts & Supreme Court: Address appeals against NCLT/DRT orders.

Facing insolvency or contractual risks? Contact Prospect Legal for a consultation to explore tailored remedies.

Understanding the Insolvency Resolution Process

Voluntary Process (Initiated by Debtors):

1. Internal Assessment: Evaluate financial distress and eligibility under Section 10.
2. Filing Application: Submit CIRP request to NCLT with proof of default.
3. Moratorium & Resolution: Develop a resolution plan with creditors’ approval.

Compulsory Process (Creditor-Initiated):

1. Default Notice: Creditors issue demand notices (Section 8 for operational creditors).
2. NCLT Petition: File application under Section 7/9.
3. CIRP Implementation: Appoint resolution professional, form CoC, and approve resolution/liquidation.

Legal Protection Under Key Provisions

Section 7, 9, & 10 of IBC: Initiating Corporate Insolvency Resolution Process (CIRP)

• Section 7 (Financial Creditors): Allows financial creditors to initiate CIRP upon default of ₹1 crore or more.
• Section 9 (Operational Creditors): Operational creditors may file after a 10-day unpaid demand notice.
• Section 10 (Corporate Debtors): Permits voluntary insolvency initiation by debtors anticipating default.

Section 14 of IBC: Moratorium

• Automatically halts lawsuits, asset transfers, and creditor actions during CIRP to protect the debtor’s assets.

Section 73 of Indian Contract Act: Compensation for Breach

• Entitles parties to claim damages for losses caused by contractual breaches.

Process of Remedy Through Prospect Legal

Step 1: Initial Consultation & Risk Assessment

• Analyze financial records, contracts, and default triggers.
• Advise on insolvency eligibility or contractual remedies.

Step 2: Legal Documentation & Filing

• Draft petitions, notices, and affidavits compliant with IBC/Contract Act.
• Represent clients in NCLT/arbitration filings.

Step 3: Compliance & Negotiations

• Negotiate with creditors for favorable settlements or resolution plans.
• Ensure adherence to NCLT timelines and moratorium terms.

Step 4: Resolution & Final Actions

• Secure approval for resolution plans or liquidation.
• Enforce arbitration awards or recover damages through courts.