IBBI needs to have more powers: NCLAT Chairperson

1 Oct
IBBI needs to have more powers: NCLAT Chairperson

The Insolvency and Bankruptcy Board of India (IBBI) needs to be given more powers, NCLAT Chairperson Justice Sudhansu Jyoti Mukhopadhaya said during the Annual day of IBBI and also suggested that there should be regulations for the Committee of Creditors (CoC). 

The number of cases coming up for resolution under the Insolvency and Bankruptcy Code (IBC) is on the rise, especially against the backdrop of efforts to deal with non-performing assets in the banking system. 

The Code is implemented by the Insolvency and Bankruptcy Board of India (IBBI). 

The Hon’ble Justice Mr. Sudhansu Jyoti Mukhopadhaya extensively dwelt on dynamic law and governance framework in fast growing economies in the world, which is founded on economic freedom. He stated that a firm needs freedom broadly at three stages of its life - to start a business (free entry), to continue the business (free competition) and to discontinue the business (free exit). This enables new firms to emerge continuously. They do business when they are efficient and vacate the space when they are no longer efficient. This ensures the most efficient use of resources and consequently optimum economic wellbeing. The Competition Act endeavours to provide freedom to continue business, the Insolvency and Bankruptcy Code, 2016 endeavours to provide freedom to discontinue business, and the Companies Act regulates the conduct of companies engaged in business.

There has to be a regulatory body for CoC on how they function, otherwise "it would be very difficult for process to follow because for every matter, a court cannot lay out the law", Mukhopadhaya noted. 

Under the Code, the CoC represents the creditors and a resolution plan requires its approval before being finally cleared by the tribunal. 

The NCLAT Chairperson complimented IBBI for setting high standards of competence.

According to Mukhopadhaya, 1,100 corporates are undergoing insolvency resolution process and about 250 of them have completed the process by resolution or liquidation. Around 250 corporates have commenced voluntary liquidation, he added. 

A matter is taken up for resolution under the Code only after National Company Law Tribunal (NCLT) nod. Decisions of the tribunal can be challenged before the National Company Law Appellate Tribunal (NCLAT). 

The IBBI 1st Annual day was celeberated on Octobber 01, 2018 at  Nehru Memorial Museum and Library Auditorium, New Delhi in the august presence of Justice Shri Sudhanshu Jyoti Mukhopadhaya, Chairperson NCLAT, Justice Shri Mahesh Mittal Kumar, President, NCLT, Dr. M. S. Sahoo, Chairperson, IBBI, Judicial and Technical Members of the NCLAT, Top executives of Insolvency Professional Agencies, Advocates, Practicing Insolvency Professionals, Valuers etc. 

Filing Samadhan congratulaes Insolvency and Bankruptcy Board of India on its first Anniversary for the commendable works done by IBBI.