Akanksha Singh-
Published on: September 13, 2021, at 13:18 IST
The Apex Court on Monday said that the time limit of 330 days for resolution planning should be strictly adhered to keeping in view the sanctity of the time limit provided by the legislature to the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) to decide insolvency and bankruptcy cases.
A single judge bench adjudicated by Justice D Y Chandrachud stated, “The earlier cases of bankruptcy code failed mainly because of long delays in litigation in judicial forums and promised that the present IBC will not be allowed to meet the same fate.”
Further the RBI governor Shaktikanta Das last week had said that the Insolvency and Bankruptcy Code (IBC) process needs some improvement which will include some legislative changes as well.
The Apex Court also stated that once the Committee of Creditors(COC) submits a resolution plan for a stressed assets under Insolvency and Bankruptcy Code, it cannot be modified or withdrawn by resolution applicant.
Meanwhile Das agreed with the observation of the Apex Court and said that RBI has some suggestion regarding this. He said, “There is scope for some improvement and the time taken in the entire process I entirely agree needs to be reduced by simplifying certain procedures and wherever necessary by carrying out legislative change.”
Further Shaktikanta Das also said that the total recovery from the IBC process used to be 45% at the aggregate level four years ago and has come down to 40% in the year of the pandemic, and also acknowledged that in some cases, lenders have had to take deeper up to 90%.
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