SC: Insolvency and bankruptcy matters must be decided in 330 days | India News – Times of India

NEW DELHI: The Supreme Court on Monday said that 330 days deadline for resolution plan has to be strictly adhered to and NCLT and NCLAT must decide insolvency and bankruptcy matters keeping in mind the sanctity of the deadline provided by legislature.
A SC bench headed, by Justice D Y Chandrachud, said that earlier bankruptcy code failed mainly because of long delays in litigation in judicial forums and promised that the present IBC will not be allowed to meet the same fate
“Once the Committee of Creditors submits a resolution plan for a stressed assets under Insolvency and Bankruptcy Code, it cannot be modified or withdrawn by resolution applicant,” the SC said.
Meanwhile, addressing a question on the high haircuts taken by banks in resolution to some bankruptcy cases, RBI governor Shaktikanta Das last week had said that the Insolvency and Bankruptcy Code(IBC) process needs some improvement which will include some legislative changes as well.
“Yes, I agree that there is scope for the improvement in the functioning of the IBC and framework. There is perhaps need to certain legislative amendments also,” he said.
The RBI has certain suggestions which it has flagged to the government, he said, citing an example of the time taken before a case is admitted in a National Company Law Tribunal (NCLT) and comes up for resolution through court-directed measures and suggested that the same can be dealt with through legal amendments.
He said the overall recoveries from the IBC process used to be at 45 per cent at the aggregate level four years ago and have come down to 40 per cent in the pandemic year, and also acknowledged that in some cases, lenders have had to take deep haircuts of up to 90 per cent.
“There is scope for some improvement and the time taken in the entire process I entirely agree needs to be reduced by simplifying certain procedures and wherever necessary by carrying out legislative change,” Das said.
(With inputs from agencies)

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