New Delhi: The Supreme Court on Monday said that the 330 day deadline for resolution plans must be obeyed and NCLT and NCLT must decide bankruptcy and bankruptcy problems consider the sanctity of the deadline provided by the legislature.
Bangku SC headed, by justice Dy Chandrachud, said that the previous bankruptcy code failed mainly due to a long delay in litigation in the justice forum and promised that the current IBC would not be allowed to fulfill the same fate “after the creditor committee submitted a stressed asset resolution in the code Bankruptcy and bankruptcy, cannot be modified or drawn by the Applicant resolution, “said SC.
Meanwhile, handling questions about high haircuts taken by the bank in the resolution for several cases of bankruptcy, RBI Governor Shaktikanta Das last week said that the bankruptcy process and bankruptcy code (IBC) needed several legislative changes that would cover several legislative changes.
“Yes, I agree that there is a scope for improving IBC functions and frameworks.
There may be a need for certain legislative amendments as well,” he said.
RBI has certain suggestions that have been marked by the government, he said, quoting a sample of time taken before the case was recognized in the National Company Law Court (NCLT) and emerged for resolution through the steps directed by the court and suggesting that the same thing can be handled through legal amendments .
He said the overall recovery of the IBC process was 45 percent at the aggregate level four years ago and has dropped to 40 percent in the year of the pandemic, and also acknowledges that in some cases, lenders must take in a haircut up to 90 percent.
“There is a scope for some repairs and the time taken in the whole process I fully agree to need to be reduced by simplifying certain procedures and anywhere necessary by making legislative changes,” said the watershed.
(With input from agency)