With much hope and anticipation, to resolve long outstanding issues of stressed assets, the Insolvency and Bankruptcy Code was brought in 2016. Expectations were that timelines of six to nine months for rescuing the Corporate Debtors will be adhered to. Unfortunately, the hopes were belied and things went like the old ways of BFIR and DRTs. If we analyze the reasons for this delay, amongst others, the foremost was vacant positions in the Tribunals to dispense the justice. The first and second wave of COVID-19 compounded the delays. Resultantly, the average period of CIRP reached more than two years, the system needed immediate respite. Ministry of Corporate Affairs should have closely watched its baby by providing the necessary support.
Raising of threshold limit from Rs. One Lac to Rs. One Crore for CIRP initiation was the first corrective measure in March 2020 to decongest the NCLTs.
The next is a recent report of the Parliamentary Committee led by Mr. Jayant Sinha which came out with very specific corrective measures to give IBC, 2016 necessary tools to deliver the intended results. The biggest shock treatment to the problem was given recently by Hon’ble Supreme Court by rebuking the executive for not filling the vacant positions and let the work suffer.
The Ministry of Corporate Affairs taking que from the above report have now risen to the occasion and very swiftly made appointments of eight judicial and ten technical members through a separate notification and the selected members shall be assuming their positions during the current week. We are sincerely hoping for quick results toward clearance of all-important admission of CIRPs, approval of pending resolution plans and Liquidation orders wherever necessary.
All stakeholders in the ecosystem know that delay in the resolution of stressed assets evaporates its value. Let the better sense prevail.
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