12 Dec 2022 12:38 PM GMT
The Minister of State in the Ministry of Corporate Affairs, Rao Inderjit Singh, on Monday, while tabling written answers to two unstarred questions tendered in the Lok Sabha, informed that the Central Government was not considering to amend the Insolvency and Bankruptcy Code, 2016 in order to tackle the issue of pendency of cases. The questions, unstarred ones, came from Congress...
The Minister of State in the Ministry of Corporate Affairs, Rao Inderjit Singh, on Monday, while tabling written answers to two unstarred questions tendered in the Lok Sabha, informed that the Central Government was not considering to amend the Insolvency and Bankruptcy Code, 2016 in order to tackle the issue of pendency of cases.
The questions, unstarred ones, came from Congress MP Manish Tiwari and in another set, jointly by Congress MP Ramya Haridas and Bharatiya Janata Party MP Poonam Mahajan.
Haridas and Mahajan, expressed concerns in their questions by seeking information on the total number of cases pending before the National Company Law Tribunal (NCLT) under the provisions of the IBC during the last three years and what steps were taken by the Government to reduce the delays in disposal of cases. The MP's had also sought information on whether the Government had any proposal to amend the IBC, with an aim to reduce the procedural delays.
In similar vein, Tiwari sought details on the number of vacancies which currently exist in the NCLT as against the bench-wise sanctioned strength of its members, whether the Government was aware of such shortage of manpower and on the steps taken by it to ensure that vacancies are filled. The MP had also sought details of the average time taken for resolution under the IBC in last six years, and whether the average time taken for resolution was greater than the stipulated time frame of 330 days, with reasons if so was the case.
Tendering the official stand of the Government, the Minister informed that currently, there are 12,871 cases pending under IBC before the NCLT (as on 31.10.2022). As for the shortage of manpower, the answer stated that vacancies were being filled from time to time.
Notably, as per Centre's own answer, there are currently 39 officials (01 President and 37 Members) in NCLT, as against the sanctioned strength of 63 (01 President and 62 Members), which shows that there is a shortfall of 25 members in the NCLT.
Regarding the average time that it has been taking for cases to be resolved, an upward trend was noted, where on average, one case now takes around 679 days to be resolved (as against the statutory stipulated time limit of 330 days). Evidently, in the year 2017-18, average time it took for a case to be resolved was 230 days, and the average being 326 days for 2018-19.
The Ministry attributed delayed disposal to associated litigation since, with duration and passage of time, average number of interlocutory applications in the cases has increased, which also impacts the realizable value of assets.
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