IBC Reset Needed

Delays Must Be Addressed

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As reported by this newspaper, the Parliamentary Standing Committee on Finance, in a meeting last week, discussed the possibility of establishing a dedicated National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) to expedite the resolution of insolvency cases under the Insolvency and Bankruptcy Code (IBC).

Since the government is expected to introduce amendments to the IBC in the upcoming monsoon session of Parliament, the committee would do well to take this discussion forward and make suitable recommendations.

The implementation of the IBC is seen as one of the most significant reforms in recent decades.

For a large market economy like India, it is crucial that the IBC functions as intended and provides a smooth and timely exit to firms. However, that has not been the case, largely because of delays in the resolution process.

The Supreme Court's judgment in the Bhushan Power and Steel case, which set aside the resolution plan, has added another layer of complication which also needs to be addressed.