New Delhi, India–
Out of 21,136 applications filed, 9,653 cases involving a total amount of approximately Rs 3,74,931.30 crore have been disposed of at the pre-admission stage of Insolvency and Bankruptcy Code, 2016 (IBC) so far, said the Ministry of Corporate Affairs on Sunday.
“2,838 cases were admitted into Corporate Insolvency Resolution Process (CIRP), out of which 306 cases are closed by appeal/review/withdrawn. In the 161 resolved cases, the realisable amount is Rs 1,56,814 crore,” said the ministry in its year-ender statement. The ministry said the recovery rate increased from 26.5 per cent in 2018 to 71.6 per cent in 2019. Time taken in recovery improved from 4.3 years in 2018 to 1.6 years in 2019, added the ministry.
The ministry said that in pursuance to the objective of providing greater ‘ease of doing business’ to all stakeholders, bringing about greater transparency in corporate structure and fostering better corporate compliance so as to enhance the efficiency of the processes under Companies Act, 2013, several landmark initiatives have been during last one year — (January-November, 2019)
The Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019 was introduced in the Lok Sabha on December 12, 2019. The statement of objects and reasons of the Bill states that a need was felt to give the highest priority in repayment to last-mile funding to corporate debtors to prevent insolvency, in case the company goes into corporate insolvency resolution process or liquidation, to prevent potential abuse of the Code by certain classes of financial creditors, to provide immunity against prosecution of the corporate debtor and action against the property of the corporate debtor and successful resolution applicant subject to fulfilment of certain conditions.
The Insolvency and Bankruptcy Code, 2016 was amended twice in 2018 to disqualify undesirable persons from regaining control of companies undergoing resolution and to balance the interests of various stakeholders in the Code, especially interests of home buyers and micro, small and medium enterprises, promoting resolution over liquidation of corporate debtor by lowering the voting threshold of committee of creditors and streamlining provisions relating to eligibility of resolution applicants.