The Union Cabinet on Wednesday approved a proposal to promulgate an Ordinance to amend the Insolvency and Bankruptcy Code (IBC).
The move is to strengthen the IBC by explicitly preventing certain persons — including wilful defaulters, disqualified directors, those who have indulged in fraudulent transactions as well as promoters whose account is classified as non-performing assets (NPA) beyond a prescribed duration — from regaining control of the defaulting company through the backdoor in the garb of a resolution applicant.
The IBC provides for an effective and robust legal framework for “time-bound insolvency resolution to release assets locked up in NPA and promote maximization of value of assets, failing which, under-utilized resources of unviable business are released through liquidation.”
These amendments have been proposed because in the initial phase of the Corporate Insolvency Resolution Process (CIRP) under the IBC, a number of cases are likely to have long pending default requiring deep haircut for the creditors. The ordinance is likely to be tabled during the winter session of Parliament with a view to get its nod soon.
2.SC RULING TO DETERMINE FATE OF NGT APPOINTMENTS
The Supreme Court is likely to hear a petition against a recent amendment to the Finance Act on the norms for appointment of judicial and expert members of tribunals.
The Southern Bench of the NGT has lost quorum and almost all Benches will lose quorum by February next year if the vacancies are not filled.
The Centre made amendments to the Finance Act allowing anyone with requisite judicial experience of 10 years and above to be eligible to become judicial members while also changing the norms for expert members.
This amendment has been challenged. With the government awaiting a verdict from the court, appointments to various tribunals including NGT have been delayed.