Comments
The time taken and costs involved in resolving disputes has crippled the entrepreneurial community in India. Statistics show that the recovery is only 20 per cent in India and in global ranking, the country is ranked in the 136th position with respect to the time taken for resolving disputes. China is in the 55th position, but the top four are Japan, Germany, the US and Korea, said Gopal Krishna Raju, Chartered Accountant and Council Member of the Institute of Chartered Accountants of India.
Delivering a special address at a meeting organised by the Indian Chamber of Commerce and Industry on 'Insolvency and Bankruptcy Code (IBC) – 2016 – A tool for Business and Restructure of Borrowings', he said “the Government has, by ushering in the IBC, envisaged to simplify the various laws and help resolve disputes in a time-bound manner.”
IBC has identified the sustainability issue and this has now become the core. The crux of the code is “taking timely decisions.”
Thus, stating, he pointed out that in the last three–four months, a number of companies had filed their petitions before the National Company Law Tribunal, but before the application was admitted, withdrew the case. “This only shows that most of these companies preferred an out-of-court settlement. Earlier, the issues remained unresolved for years under the Civil Code.”
IBC has identified the 3 'R's – Resolve, Recover and Raise (the latter, he said, with reference to the issue of corporate bonds to run the business).
Navrang Saini, whole-time member, Insolvency and Bankruptcy Board of India (IBBI), said around 3,500 cases had filed for insolvency, of which 350 were admitted with the National Company Law Tribunal (NCLT).
He pointed out that once companies file for insolvency with NCLT or the Debt Recovery Tribunals (DRTs), the management of the company would be taken over by the resolution professional, who would lead from the front, try and resolve the issue so as to let the business continue. The liquidation process would begin only if the resolution professional was not hopeful of reviving the company.
With a view to further ease the process, the DRTs and NCLTs are being strengthened.
There are 33 DRTs at present, but this number was insufficient to handle the number of cases. With the implementation of IBC, there definitely will be a time-bound regulation of all cases
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.