Report acknowledged that IBC has made significant strides in improving resolution of distressed corporate assets, enhancing credit discipline, and revival of unproductive assets in India.
- However, Committee observed persistent challenges that hinder its full effectiveness.
Issues highlighted by committee on IBC:
- Competence and conduct issues against Resolution Professionals (RPs).
- Lack of clarity on government creditors' claims and issues around stakeholder representation.
- Delays at the admission and adjudication stage at the National Company Law Tribunal (NCLT).
- Nearly 64% of Corporate Insolvency Resolution Processes (CIRPs) exceeded statutory 330-day limit
Key recommendations of committee
- Establishing fast track tribunals with strict timelines for high priority cases, adopting an urgent list system to prioritize time-sensitive matters.
- Introduction of provisions similar to Article 226(3) of Constitution, to mandate the processing of applications within 14 days.
- PPP models to improve judicial processes, drawing on success of privatized Seva Kendras.
- Ensuring NCLT members possess specialized knowledge, as specified by Supreme Court in the Finolex Industries case.
- Providing clearer guidelines on treatment of government dues, especially taxes and penalties, etc.
About Insolvency and Bankruptcy Code, 2016:
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