Status as on 02/02/2019
Insolvency and bankruptcy code, 2016 (shortly IBC) was enacted with the motive of identify the financially distressed assets in a quicker way and provide a debt restructuring plan to revive the corporate debtor in a time-bound manner.
Time is the essence of the whole code which can be clearly made out from the procedure to be followed in the code.
Progress till now
It has been witnessed from the implementation of the code in past that, IBC has proved to be a faster way to recover the money from the sick industries or the corporate persons which owe a certain amount to the creditors. As per the information provided IBC has helped to recover a debt of amounting Rs. 1 Lakh crore successfully till the year 2019.
The whole code is specific in nature and has been enacted with the motive to revive the debt-laden corporate persons in a time-bound manner. However, due to various reasons such as lack in enough no. of NCLT benches and NCLT benches being overburdened with more IBC cases the code was losing its time essence.
The central government has such reasons for the delay in the efficient resolution of the corporate persons and is working towards setting up of new benches across the nation and increase the no. of sitting judges in the NCLT.
To expedite the bankruptcy cases and curb down the causes for delay in the resolution of corporate persons, a move has been taken to revamp the Ahmedabad and Mumbai NCLTs. New judges shall be appointed at both of these courts and a new and spacious infrastructure shall be set up for both NCLTs, as these two are the busiest as well as the ones hearing the most high profile cases as compared to other NCLTs.
It had been hearing three of the top dozen cases including Essar Steel, Alok Industries NSE -1.30 % and ABG Shipyard NSE 2.78 %.
Currently, there is no technical judicial member and two judicial members are hearing cases in one courtroom with a seating capacity of 30-35. As per the sources, the Ahmedabad NCLT will be shifted to a new spacious building with two courtrooms.
Mumbai NCLT has been dealing with large and important cases such as IL&FS, Gitanjali Gems 4.17 %, and Ruchi Soya.
Going by the current no. of cases and delay in time delivery of orders, NCLT, Mumbai is expected to see an increase in no. of judges i.e. seven. Both the NCLT chapters list about 50-60 cases on an average daily with Mumbai seeing a slightly larger share of cases. The numbers have doubled or trebled in the past one and a half years.
This recent code has just arrived two years before and it has already proved to be an efficient law to revive the corporate persons in debt. No doubt, few cases have witnessed huge delays but the way things are moving and the central government is recognizing the causes it is expected that all the IBC cases in future will be disposed of in a time-bound manner. Such steps like the appointment of new judges and revamping the whole infrastructure of few NCLT benches shall prove to improve the current status of IBC cases being filed in the nation.
Disclaimer – Please note that the above view is based on personal interpretation and for general awareness. The readers are required to take opinion from the Top IBC professionals or Insolvency Professionals before relying on the article. For any clarifications, please write to us at firstname.lastname@example.org