oppn parties Welcome Amendments To The IBC

News Snippets

  • Supreme Court sentences Congress leader Navjot Singh Sidhu to one year rigorous imprisonment in the 1988 road rage case
  • Home Minister Amit Shah says rights should not be demanded before fulfilling responsibilities and that universities are no place to wage ideological battles
  • NIA court convicts JKLF chief Yasin Malik in terror funding case after he pleads guilty of all charges
  • A study backed by PM-EAC has recommended universal basic income and urban job guarantee and greater spend on social sector schemes
  • Supreme Court rules that the decisions of the GST Council are not binding on the Centre and the states, leaving the door open for states to levy further taxes
  • After sustained campaign by BJP MP Arjun Singh, the Centre today withdrew the jute price cap order, industry welcomes move
  • Akasa Air might postpone its July launch due to late arrival of aircrafts
  • Metro Cash & Carry decides to sell Indian operations. All major players, including Reliance retail and Amazon, are likely to bid
  • Local and global cues spook the markets on Friday - Sensex crashes 1416 points to 52792 and Nifty by 430 points to 15809
  • IPL: RCB crushes GT by 8 wickets as Virat Kohli returns to form with a well-made half century
  • Nikhat Zareen is world champion in flyweight category. Wins gold at Women's World Championships at Instanbul
  • Supreme Court uses its special powers under Article 124 to release A G Perarivalan, a Rajiv Gandhi assassination convict
  • Indrani Mukherjea, prime accused in the Sheena Bora murder case, gets bail from Supreme Court after 6.5 years in jail
  • Hardik Patel quits Congress, says top leaders distracted by mobile phones and state leadership busy arranging 'chicken sandwiches' for them
  • Anil Baijal resigns as Lieutenant Governor of Delhi citing "personal reasons"
Nikhat Zareen is crowned world champion in the flyweight (52Kg) category at the Women's World Championships in Istanbul /////// Supreme Court sentences Navjot Singh Sidhu to rigorous imprisonment of one year in the road rage case /////// Sunil Jakhar, who quit the Congress a few days ago, joins the BJP
oppn parties
Welcome Amendments To The IBC

By A Special Correspondent

The main purpose of the Insolvency & Bankruptcy Code (IBC) is to allow secured lenders to recover a major part of their dues in case a company goes under. That purpose was being defeated as, in the absence of clarity, the NCLAT was interpreting the law differently and treating all creditors equally. The repayment system under IBC is designed as a waterfall mechanism in which secured and senior lenders get primacy as opposed to unsecured and subordinate lenders. The government has now approved amendments to the code that will allow payments to be made first to secured lenders and workmen before the same is made to unsecured and operational creditors.

The Committee of Creditors (CoC) under the IBC has been made the main body to decide the repayment mechanism through majority vote. The courts will now not have the luxury to interpret the law according to their wish as things have been spelled in black and white. It is always upon the Parliament to spell out the law. The tribunals and the courts are there only to interpret and operationalize it. Confusion arises only when the law is not clear and the government has done well to rectify the grey areas.

Another welcome amendment is for allowing the majority vote of the homebuyers in the C0C to count as votes of 100% of homebuyers for the purpose of the resolution plan. This was necessary as the resolution gets prolonged as other homebuyers approach the courts and get stay orders on points of law. The government is also alive to the fact that delays defeat the purpose of the IBC. Hence, it has prescribed that the total process, from admission of the case to final resolution, be completed in 330 days. While this is good, the NCLT is woefully short of resources and as more cases come up, the government will have to provide it with both human and financial resources for it to work efficiently and maintain timelines.