Over 12,000 cases filed after implementation of IBC
PrintListen to this Article
Asserting that the code should be the last resort, Corporate Affairs Secretary Injeti Srinivas said the NCLT has been very expeditious in disposing cases related to insolvency.
“In some of the NCLTs, the number of cases filed and the number of cases disposed off are almost the same. That means you are almost current,” he noted.
Cases under the code can be taken up only after the approval from the tribunal, which has benches in different parts of the country.
Srinivas said that personal insolvency should be approached carefully and in a planned manner. “The issue of personal insolvency is an important dimension, which we have to address at the earliest.
“Today, we have approximately ₹77 lakh crore as outstanding non-food credit. Of this, the industry accounts for about ₹26 lakh crore and the services sector accounts for ₹21 lakh crore. These two put together account for ₹48 lakh crore.
“It is 70 per cent of non-food credit outstanding. We are left with 30 per cent which we need to address now,” said Srinivas. According to him, there are two routes for personal insolvency – one is the insolvency process, followed by bankruptcy process – and the second one is a fresh start.
A fresh start, or a waiver of a loan, should be considered for debtors based on certain criteria such as income levels and assets, he said.
Speaking at a conference organised by industry body CII and British High Commission, Srinivas said that since the commencement of the code and setting up of the NCLT, 12,000 cases have been filed.
“(Around) 4,500 cases have been settled before resolution to a settlement amount of almost ₹2 lakh crore. 1,500 cases have been admitted... 6,000 cases are waiting in queue,” he added.
The IBC provides for time-bound resolution of stressed assets. To a query on the delay in resolving certain cases under the IBC, Srinivas observed that it would not be fair to say that cases have been lingering on.
“May be these large cases have taken more than 270 days and some may be double of that, but if you look at the size of that loan and the quantum of recovery, it is still an extraordinary sort of result.
“In (the case of) Essar, more than ₹42,000 crore would be (recovered). That is a very big sum and involves many creditors... I think for such very large cases, there would be some amount of litigation and one year or little over one year for such a large case to be settled is not too long.” #casansaar (Source - PTI, The Hindu)
Category : Insolvent Professional | Comments : 0 | Hits : 307
The National Company Law Tribunal (NCLT) on Monday ordered insolvency proceedings against media baron Subhash Chandra on a plea filed by Indiabulls Housing Finance. A two-member Delhi bench of the NCLT directed initiation of personal insolvency proceedings against Zee Entertainment Enterprises Ltd (ZEEL) Chairman Emeritus Chandra, who was a guarantor for a loan given to Essel group firm Vivek Infracon Ltd. The NCLT bench, consisting members Ashok K Bhardwaj and Subrata K Das,...
The Insolvency and Bankruptcy Board of India (IBBI) invites suggestions/comments from public and regulated entities, on the Regulations for simplifying, easing and reducing cost of compliance. The suggestions are invited in pursuance of the announcement made in the Union Budget for FY 2023-24 by the Union Finance Minister: “To simplify, ease and reduce cost of compliance, financial sector regulators will be requested to carry out a comprehensive review of existing regulations. For th...
To make surety bond business more attractive, the government is looking at making relevant changes in the Insolvency and Bankruptcy Code (IBC) to consider insurers as financial creditor in case of default of infra projects. The surety bond issued by a general insurance company is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee). The surety is a company that provides the fina...
The National Company Law Tribunal Delhi recently observed that the Insolvency and Bankruptcy Code cannot be used as a recovery tool. “We are of the view that in the present case the applicants are already having demands drafts of amount exceeding the defaulted amount in this petition and moreover IBC cannot be used as a tool for recovery; the settlement has been arrived between the parties. The amount has been paid in excess of the default amount and Ld. Counsel for the applicant has al...
India’s turbulent aviation sector will likely see another player go belly up with Go First of the Wadias filing for voluntary insolvency before the National Company Law Tribunal (NCLT). The budget carrier said it is cancelling all flights on May 3, 4, and 5 and will refund the full fares to the passengers. The Directorate General of Civil Aviation (DGCA) has questioned the cancellation and issued a show-cause to the airline. Go First has been asked to submit its response within 24 ho...
Comments