While it has taken the Ethics Committee of Parliament to recommend disqualification of absconding liquor baron Vijay Mallya, a new law may soon automatically disqualify a bankrupt person from becoming even a lawmaker.
The Joint Committee of Insolvency and Bankruptcy Bill headed by BJP MP Bhupender Yadav has recommended several disqualifications ? including from being elected to any public office through elections or in any local authority. If the recommendations are accepted by the government and incorporated in the revised Bill expected to be tabled during the current session of Parliament, the ban could extend to people contesting elections for municipal bodies, state assembly and Parliament.
Although Article 102 (c) of the Constitution provided for someone who is an “undischarged solvent” from becoming a member of the Lok Sabha or the Rajya Sabha, the law did not provide for it. The committee has now sought to plug the gap and take stringent action. Mallya in recent years has emerged as one of the most prominent loan defaulters and has been declared a “wilful defaulter” by several banks, which prevents him from accessing fresh bank funding.
Over the past few years the representation of businessmen has been rising in Parliament and state assemblies, with some of them having a chequered repayment record when it comes to bank loans. In the same vein the committee has recommended that someone declared bankrupt could also be barred from becoming a public servant or being appointed as a trustee for a trust, estate or settlement.
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Those having criminal charges ,may also be bared against contesting elections. Farook Shariff
A variety of factors have resulted in a pile of bad debt for Indian banks, both private and state-run, prompting the government to rush in with legislation such as the Insolvency and Bankruptcy Bill to replace and consolidate several laws to speed up resolution and improve the overall investment climate.
The large pool of NPAs is related to infrastructure and metals sectors, especially steel, and a number of MPs have business interests in these sectors.