The Central Government is considering a new mechanism to reduce the burden of NCLT and complete the hearing of insolvency cases at the earliest. In fact, the government wants that the insolvency cases can be brought on the fast track and such cases can be disposed of at the earliest without delay. According to ET’s report, the government is working on a mechanism wherein creditors and debtors can reach an informal agreement to resolve the insolvency case and then approach the NCLT for speedy adjudication. This process will save a lot of time for NCLT and hearing and disposal of maximum number of cases will be done quickly.
Understand how many cases are coming in the figures
After a slowdown during the pandemic years of FY 2021 and FY 2022, there has been a 25 per cent increase in the number of insolvency cases in the third quarter of FY 2023. However, compared to the earlier quarters in FY 19/20, the number of cases that entered the insolvency process remained low. According to IBBI data, it took an average of 482 days to resolve 611 insolvency cases under IBC till December 2022. IBC gives 270 days to resolve corporate insolvency. Creditors recovered Rs 2.53 lakh crore, or 30.4 per cent of their admitted claims, in these 611 cases.
The finance minister had said why there is delay
Finance and Corporate Affairs Minister Nirmala Sitharaman last month admitted that the delay in filling vacancies in the National Company Law Tribunal and the National Company Law Appellate Tribunal was delaying the resolution process. Let us tell you that recently Go First Airline has asked NCLT to give a quick verdict on its petition. At the same time, SpiceJet has also received a notice of insolvency. In such a situation, the importance of NCLT has increased a lot.