Extortionate credit transactions under insolvency law allow avoidance of exorbitant debt terms within the specified period. Extortionate credit transactions under section 50 of the Insolvency and Bankruptcy Code, 2016 arise where a corporate debtor receives financial or operational debt on terms requiring exorbitant payment within the period starting from two years preceding the initiation date and ending on the insolvency commencement date. The liquidator or resolution professional may apply to the Adjudicating Authority for avoidance of such transaction, and the Board may specify the circumstances covered by this provision. Debt extended by a person providing financial services in compliance with applicable law is excluded.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Extortionate credit transactions under insolvency law allow avoidance of exorbitant debt terms within the specified period.
Extortionate credit transactions under section 50 of the Insolvency and Bankruptcy Code, 2016 arise where a corporate debtor receives financial or operational debt on terms requiring exorbitant payment within the period starting from two years preceding the initiation date and ending on the insolvency commencement date. The liquidator or resolution professional may apply to the Adjudicating Authority for avoidance of such transaction, and the Board may specify the circumstances covered by this provision. Debt extended by a person providing financial services in compliance with applicable law is excluded.
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