Insta
Centre Demands Resolution Of Top Nine Insolvency Cases By March; Special Focus On Essar Steel, Jaypee Infratech
Swarajya Staff
Jan 29, 2019, 04:25 PM | Updated 04:25 PM IST
Save & read from anywhere!
Bookmark stories for easy access on any device or the Swarajya app.
The Union government has asked lenders and resolution professional (RPs) to wrap up the resolution of nine of the top twelve high-value insolvency cases by March, reports Economic Times (ET).
A special emphasis has been put on Essar Steel and Jaypee Infratech.
The dozen cases undergoing resolution at the National Company Law Tribunal (NCLT) together owe the Indian banking system Rs 2.5 lakh crore.
The Insolvency and Bankruptcy Code, 2016 (IBC) stipulates that the cases should be resolved within 270 days, but these cases are pending for a duration in exceeding the timeframe.
Due to increasing delays at NCLT, banks have had to suffer losses of Rs 25,000 crores as interest was not paid Rs two lakh crore worth of loans.
It’s Possible
Jaypee Infratech’s case is stuck at the Tribunal due to the lack of consensus among the lenders and apartment buyers. The law requires two-thirds of the banks as well as home buyers to back a resolution plan.
But since the votes of many buyers, who did not turn up for voting were counted as ‘negative votes,’ the plans were shot down. However, a proposal to mandate a two-thirds majority of those attending the voting is being considered.
Essar Steel’s case on the other hand is pending with the Ahmadabad bench for months due to counter offers from rival bidders. The National Company Law Appellate Tribunal (NCLAT) has directed the bench to complete the hearing by 31 January.
A senior government official appeared upbeat about the March deadline. “Almost all the cases are in absolutely final stages of resolution. So, it can be done,” he told Times Of India.
Save & read from anywhere!
Bookmark stories for easy access on any device or the Swarajya app.
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.