Rubin, a practicing lawyer has made the following observations: Scenario Observations made by Rubin on eligibility to initiate corporate insolvency resolution process (CIRP) A Ltd. who owes ₹5 crore from B Ltd. under a c

Let's examine Rubin's observations in light of Section 11 of the Insolvency and Bankruptcy Code, 2016, which specifies persons not entitled to make an application to initiate Corporate Insolvency Resolution Process (CIRP), and Section 4, which defines the minimum default amount. Minimum Default Amount (Section 4): As per Section 4, read with Notification No. S.O. 12505 (E) dated 24 th March, 2020, the minimum amount of default for initiating CIRP is ₹1 crore . Persons Not Entitled to Initiate CIRP (Section 11): A corporate debtor undergoing CIRP or Pre-packaged Insolvency Resolution Process (PPIRP). A financial creditor or operational creditor of a corporate debtor undergoing PPIRP. A corporate debtor that has completed CIRP twelve months preceding the application date. A corporate debtor in respect of whom a resolution plan has been approved under Chapter III-A, twelve months preceding the application date. A corporate debtor or financial creditor who has violated any terms of a resolution plan approved twelve months before the application date. A corporate debtor in respect of whom a liquidation order has been made. Analysis of Scenarios: 1. Scenario 1: A Ltd. owes ₹5 crore from B Ltd. under a contract for supply of goods. Rubin's Observation: A Ltd. is eligible. Analysis: The debt is ₹5 crore, which is above the minimum default threshold of ₹1 crore. There is no information suggesting A Ltd. falls under any disqualification of Section 11. Correctness: Rubin's observation is correct . 2. Scenario 2: C Ltd., undergoing CIRP, intends to file an application under Section 7 against an outstanding amount of ₹70 crore from a debtor. Rubin's Observation: C Ltd. is not eligible. Analysis: Section 11(a) explicitly states that a corporate debtor undergoing CIRP is not entitled to make an application to initiate CIRP. However, Explanation II to Section 11 clarifies that nothing in this section shall prevent a corporate debtor referred to in clauses (a) to (d) from initiating CIRP against another corporate debtor . Since C Ltd. is trying to initiate CIRP against *its debtor* (another corporate debtor), it is allowed. Correctness: Rubin's observation is not correct . C Ltd. would be eligible to initiate CIRP against its debtor. 3. Scenario 3: B Pvt. Ltd. has lent money to Z Ltd. Total outstanding amount including interest is ₹95 lakh. Rubin's Observation: B Pvt. Ltd. is eligible. Analysis: The total outstanding amount is ₹95 lakh (₹0.95 crore). This is below the minimum default threshold of ₹1 crore required to initiate CIRP. Correctness: Rubin's observation is not correct . B Pvt. Ltd. is not eligible to initiate CIRP as the default amount is less than ₹1 crore. Summary: Scenario Observations made by Rubin on eligibility to initiate corporate insolvency resolution process (CIRP) Correct Answer A Ltd. who owes ₹5 crore from B Ltd. under a contract for supply of goods A Ltd. is eligible Yes, the observation is correct C Ltd., undergoing CIRP, intends to file an application under section 7 of the Insolvency and Bankruptcy Code, 2016 (the Code) against an outstanding amounting to ₹70 crore from a debtor C Ltd. is not eligible No, the observation is not correct B Pvt. Ltd. has lent money to Z Ltd. Total outstanding amount including interest is ₹95 lakh B Pvt. Ltd. is eligible No, the observation is not correct