Centre fast tracks Insolvency process

NewDelhi, June 18: A good news from the Central government.The Insolvency and Bankruptcy Board of India (IBBI) has taken steps to fast-track the insolvency resolution process for specified category of corporate debtors. The IBBI was set up by the central government under the Insolvency and Bankruptcy Act passed by parliament in 2016.

The board has issued notifications for small companies, start-ups (other than partnership firms), unlisted companies with total assets not exceeding RS 1 crore. The main highlights of the notification are

* The Insolvency process in these cases shall be
completed within a period of 90 days.

* The adjudicating authority may extend the period by
45 days if required for completion of the process.

* These regulations clearly mention the process to be
followed such as from initiation of insolvency to the
conclusion by settling the debt of owners.

* The plan for revival prepared must be approved by the
Adjudicating Authority.

* Any person or firm such as a creditor or a corporate debtor may
initiate the process if he has evidence of default by filing an
application with the AA authority.

* When the application is admitted, an interim resolution
Professional (IRP) is appointed by the board.

* IRP appointed will give his opinion regarding the status of the
case and he will decide whether the case can be fast tracked or
normal insolvency is enough.

Finally, experts are hailing the notification because it brings clarity in the resolution of corporate debts and also helps to wind up the companies which were difficult earlier under old BIFR and SICCA laws.