SC lays down guidelines in an attempt to speed up resolution process under IBC
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Most of the big-ticket cases — Essar Steel, Bhushan Power & Steel, Binani Cement — have tripped on their original 270-day deadline. The 270-day period is the extended timeline for resolution professionals (RPs) to file a plan.
According to the Insolvency and Bankruptcy Code (IBC), 2016, the tribunals have a limited role but the rising number of litigations has increased its importance. The Supreme Court, hence, has laid down guidelines in an attempt to speed up the process of resolution.
Though part of the Essar order, the guideline from the apex court will have a far-reaching impact on all the cases under the IBC.
The court has sought to define the role of important cogs in the IBC wheel like RPs, committees of creditors (CoCs) and the tribunals.
In a bid to prevent litigation at every stage, the court has clearly laid down at which stage the resolution applicant could approach the adjudicating authority.
WHAT SC ORDER SAYS
A resolution professional is only to “examine” and “confirm” each resolution plan
The resolution professional is not required to take any decision, but merely ensure that the resolution plans submitted are complete
The NCLT does not have jurisdiction to interfere on an applicant's behest at a stage before the quasi-judicial determination made by the adjudicating authority
A resolution applicant has no vested right that his/her resolution plan will have to be considered
The NCLT alone has jurisdiction when it comes to applications and proceedings by or against a corporate debtor covered under the Code. #casansaar (Source - IBBI, Business Standard)
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