26 Oct 2026
The ambiguity in the treatment of statutory dues under the Insolvency and Bankruptcy Code 2016: Rainbow or PVVNL? The Saga Continues
21 Dec 2023
21 Dec 2023
The Supreme Court of India (Supreme Court) in State Tax Officer v Rainbow Papers Limited1 (Rainbow Papers Judgment) held that a statutory authority, in whose favor a charge is created under a statute, would be treated as a secured creditor under the Insolvency and Bankruptcy Code 2016 (IBC). The Rainbow Papers Judgment was distinguished by the Supreme Court in Paschimanchal Vidyut Vitran Nigam Limited v Raman Ispat Private Limited2 (PVVNL Judgment). The Supreme Court, in the PVVNL Judgment, observed that the findings in the Rainbow Papers Judgment should be limited to the specific facts of the Rainbow Papers Judgment given that Rainbow Papers Judgment did not consider the priority of claims provided under section 53 of the IBC. Subsequent to the pronouncement of the PVVNL Judgment, the Review Petitioners (defined below) filed five review petitions3 before the Supreme Court for review of the Rainbow Papers Judgment (Review Petitions). The Supreme Court rejected the Review Petitions on the basis that the scope and ambit of review was not met (Rainbow Paper Review Judgment).
This article was originally published here.
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