Govt looking to improve resolution within IBC with this new step

Mumbai: Under the Insolvency and Bankruptcy Code (IBC), the government is planning to announce the procedure of "deemed admission" for companies to improve the resolution plan of debt-ridden companies, Injeti Srinivas, Corporate Affairs Secretary, said. In cases where financial creditors have approached the National Company Law Tribunal (NCLT), their petitions could be considered for admission and a resolution professional (RP) can be appointed for a faster resolution.

Srinivas added that the government is also considering bringing in individual insolvency framework.

This move is aimed at reducing the NCLT's burden to hear the cases and pass an admission order. Hence, the tribunals can focus on the primary issue of insolvency cases.

"If the proposal gets implemented, then after the deemed admission of companies for resolution process, there would not be any immediate load on the NCLT to hear and admit the case and the RP too will work for the first six months and try to finish the process," Srinivas said on the sidelines of an event on bankruptcy.

Srinivas added that the government is also considering bringing in individual insolvency framework.

"We don't have cross-border insolvency framework. It is now being looked at very closely and we may soon have a cross-border insolvency framework. Individual insolvency… we will start very soon."