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.
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.