A member of the Insolvency and Bankruptcy Board of India (IBBI) said the current time limit to resolve insolvency cases was more than adequate. This assumes significance in light of demands for more time to resolve cases filed for bankruptcy.
Currently, after a case is admitted in the National Company Law Tribunal, it has to be resolved within 180 days, failing which the company goes into liquidation. In exceptional cases, the NCLT may allow another 90 days for resolution.
‘No time should be lost’
“The provision for 180 days is too long,” wholetime member of Insolvency and Bankruptcy Board of India (IBBI) Mukulita Vijayawargiya said at an event organised by CII. “In the present era, we have professionals with technology and offices that are increasing in efficiency.”
“With the availability of these, why should any time be lost? The sooner we remove such cases, the sooner will we clear the way for the business sector to move ahead,” she said.
Dr. Vijayawargiya added that although the IBBI was dealing with all accounts, “RBI has concentrated its attention on large and big accounts because they constitute more than 25% of the defaulters”.
Former RBI executive director Madhukar Umarji, also present at the event, said all defaults should not be seen as criminal conduct.
“When a loan is not repaid, the default is automatically construed as criminal conduct under the Code. But there could be situations where the default is purely a result of market forces. Therefore, it can’t be called criminal conduct in all cases,” Mr. Umarji said.
