The Bankruptcy Law Reform Committee on Wednesday submitted its report to Union Finance Minister Arun Jaitley. The government has invited comments on the report by November 19.
“The Government had constituted a Bankruptcy Law Reform Committee under the Chairmanship of Dr TK Viswanathan, former Law Secretary, to look into various bankruptcy related issues and give its report along with a draft Bill on the subject to the Government. Dr Viswanathan submitted the report of the Committee to Finance Minister Shri Arun Jaitley in his office here today,” the Ministry of Finance said in a notification.
Mr Jaitley had in his Budget Speech 2015-16 identified the reform of the bankruptcy law as a key priority for improving the ease of doing business and had announced that a comprehensive Bankruptcy Code, meeting global standards and providing necessary judicial capacity, will be brought in this financial year.
The proposed draft Bill has a number of features aimed at making the bankruptcy process speedy and fair. It has been uploaded on the Finance Ministry’s website, awaiting comment.
Some of the important aspects of the draft Bill include the creation of a number of adjudicating authorities and the delineation of their roles. The draft Bill calls for the creation of an Insolvency Regulator for regulating insolvency professionals, insolvency professional agencies and information utilities. “This regulator may have an administrative law wing to perform the quasi-judicial functions of the regulator,” the draft Bill said.
This Regulator will include an Insolvency Adjudicating Authority, which will have the jurisdiction to hear and dispose of cases by or against the debtor, a Debt Recovery Tribunal, which will have jurisdiction over individuals and unlimited liability partnership firms, and a National Company Law Tribunal, which is to have jurisdiction over companies and limited liability entities.
The draft Bill also lays down the time limit within which insolvency proceedings are to be completed. “The corporate insolvency resolution process shall be completed within a period of one hundred and eighty days from the date of admission of the application to initiate such process,” the draft Bill says.
This can be extended by 90 days “if the Adjudicating Authority determines that the case is of such complexity that an orderly corporate insolvency resolution process cannot be completed within one hundred and eighty days”.
