NEW DELHI :
A little over three years after the passage of the Insolvency and Bankruptcy Code (IBC), 18,782 cases were filed under the law until June this year, minister of state for finance Anurag Thakur said.
Of the total cases filed under the law until June, 2,173 cases were admitted to the bankruptcy court National Company Law Tribunal (NCLT), Thakur said in a written reply in the Rajya Sabha on Tuesday.
“Out of 2,173 admitted cases, 1,274 cases were ongoing under different stages of resolution process, 129 cases have resulted in resolution, 491 cases have been approved for commencement of liquidation process, 279 cases have been closed by appeal/review/settlement/withdrawn under section 12A of IBC," the minister said today.
Actions have been taken as per the provisions of the IBC in all the cases under the law, he added.
The law, which was passed in May 2016, was amended in July this year to provide clarity about the preference given to financial creditors over operational creditors and giving committee of creditors (CoC) the authority over distribution of proceeds from sale of an insolvent asset to a potential bidder.
Finance Minister Nirmala Sitharaman had said the changes that were brought to the law were in response to the events that eroded the legislative intent of the IBC. Sitharaman had referred to the Essar Steel insolvency case, where National Company Law Appellate Tribunal (NCLAT) had ordered that operational creditors should be treated on par with financial creditors.
The new amendments gave the CoC of a bankrupt firm the authority over the distribution of funds in the resolution process and fix a timeline of 330 days for resolving cases referred to the IBC.
In November, the Supreme Court ordered that the decisions of the CoC were final in the Essar Steel insolvency case and that financial creditors will get more weightage for distribution of funds. This paved the way for global steel giant’s ArcelorMittal’s entry into India and takeover of the bankrupt company.
Essar Steel was one of the biggest and longest-running cases to be resolved under IBC. The case was admitted to the Ahmedabad bench of NCLT in August 2017 for insolvency proceedings after it was identified by the Reserve Bank of India in its first list of 12 big loan defaulters.