As many as 12,000 cases have been filed since the implementation of the Insolvency and Bankruptcy Code (IBC) and setting up of the National Company Law Tribunal (NCLT), a senior government official said on Monday.
Asserting that the code should be the last resort, Corporate Affairs Secretary Injeti Srinivas said the NCLT has been very expeditious in disposing cases related to insolvency.
“In some of the NCLTs, the number of cases filed and the number of cases disposed off are almost the same. That means you are almost current,” he noted.
Cases under the code can be taken up only after the approval from the tribunal, which has benches in different parts of the country.
Srinivas said that personal insolvency should be approached carefully and in a planned manner. “The issue of personal insolvency is an important dimension, which we have to address at the earliest.
“Today, we have approximately ₹77 lakh crore as outstanding non-food credit. Of this, the industry accounts for about ₹26 lakh crore and the services sector accounts for ₹21 lakh crore. These two put together account for ₹48 lakh crore.
“It is 70 per cent of non-food credit outstanding. We are left with 30 per cent which we need to address now,” said Srinivas. According to him, there are two routes for personal insolvency – one is the insolvency process, followed by bankruptcy process – and the second one is a fresh start.
A fresh start, or a waiver of a loan, should be considered for debtors based on certain criteria such as income levels and assets, he said.
Speaking at a conference organised by industry body CII and British High Commission, Srinivas said that since the commencement of the code and setting up of the NCLT, 12,000 cases have been filed.
“(Around) 4,500 cases have been settled before resolution to a settlement amount of almost ₹2 lakh crore. 1,500 cases have been admitted… 6,000 cases are waiting in queue,” he added.
The IBC provides for time-bound resolution of stressed assets. To a query on the delay in resolving certain cases under the IBC, Srinivas observed that it would not be fair to say that cases have been lingering on.
“May be these large cases have taken more than 270 days and some may be double of that, but if you look at the size of that loan and the quantum of recovery, it is still an extraordinary sort of result.
“In (the case of) Essar, more than ₹42,000 crore would be (recovered). That is a very big sum and involves many creditors… I think for such very large cases, there would be some amount of litigation and one year or little over one year for such a large case to be settled is not too long.”
via ‘Over 12,000 cases filed after implementation of IBC, setting up of NCLT’ – The Hindu BusinessLine