There has been a sea-change in creditor behaviour, debt resolution and recovery framework of India, three years since the promulgation of Insolvency and Bankruptcy code (IBC), Supreme Court Judge Sanjay Kishan Kaul said.
Before the conceptualisation of the IBC, the structure of the bankruptcy and insolvency process was varied and multi-layered. Being covered by multiple laws, with different fora for adjudication, the process was wrought with delay and other inadequacies, he said speaking at the Symposium on ‘Recovery and Resolution- Emerging Challenges before Recovery Tribunals & NCLTs’.
The event was organised by Law 85 Trust in association with Federation of Indian Hire Purchase Association.
ADVERTISEMENT
Justice Kaul noted that with the IBC providing a robust framework for market-driven and time-bound resolution processes, since its inception 80 cases were resolved by accepted resolution plans and an amount of ₹60,000 crore realised through these resolution plans. “The change is behavioural too. Having created an apprehension in the minds of the management of companies of losing control over their companies, various promoters have been prompted to settle or resolve their dues before a formal process is started, he said.
Further, he said promoters were eager to re-negotiate/ restructure debt at the earliest sign of distress, which helps in the value preservation of the corporate entity. “This has also provided an impetus to corporate entities partnering with new investors to resolve earlier signs of distress, before approaching the NCLT,” Justice Kaul said.
ADVERTISEMENT