The Financial Express, June 13, 2025
THE PROPOSED AMEND-MENTS to the Insolvency and Bankruptcy Code (IBC) could include a modification in the 14-day timeline for admission of applications and equitable treatment for operational creditors with financial credi-tors, official sources have indi-cated to FE. The standing com-mittee of finance is also weighing an increase in the member strength of the tri-bunals-judicial and technical and also the constitution of special IBC benches.
The Parliamentary panel has invited suggestions from stake-holders on possible amend-ments to the Code. The sugges-tions need to be sent in by June 16. The panel may also hold dis-cussions with a few stakehold-ers before the IBC amendment Bill is tabled in the monsoon ses-sion of the parliament in July, the officials cited above said.
Currently, the adjudicating authority- National Company Law Tribunal (NCLT) -has 14-day timeframe to dispose of (by admitting or rejecting) applications for the initiation of corporate insolvency resolution process (CIRP).
The amendment to Section 31(4) of the Code, which man-dates that an approval from the Competition Commission of India (CCI) must be obtained before the committee of credi-tors votes on a resolution plan, is also likely to be included in the current round of amendments, So far, govt has made six amendments to the IBC.
These amendments are aimed to bring clarity to the existing provisions the official said.
Experts said that the CCI approvals often takes up to 210 days which makes it difficult to adhere to the 330-day deadline of completing the CIRP. Though early this year, the Supreme Court noted that the CCI approvals for combinations are efficient with an average of 21 working days, and a few exceeding 120 days.
“The timeline of 210 days as stipulated under the Competition Act would be attracted only in cases which involve an extremely high degree of AAEC (appreciable adverse effect on competition), mostly indicative of a complicated super-monopolistic behemoth,” the apex court order said.
So far, the government has made six amendments to the IBC in addition to a host of other changes in the regulations, since the enactment of IBC in 2016.
These amendments are aimed to bring clarity to the existing provisions, introduce new regulations to deal with the practical challenges, and to speed up the resolution process. For instance, the last 3 years have witnessed a surge in the approval of resolution plans under the IBC. Of 1,194 resolution plans over the last eight years, 60% (708) resolutions were done in the last three years.
According to the RBI report on Trend and Progress of Bank-ing in India (December 2024), the IBC has emerged as the dominant recovery route, accounting for 48% of all recoveries made by banks, followed by the SARFAESI Act (32%), Debt Recovery Tribunals (17%), and Lok Adalats (3%) in FY24.
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