MCA Defends Insolvency & Bankruptcy Code Amendments; Tells SC That Strict Resolution Deadlines Are Important
By : Legal Era
Update: 2019-09-23 13:08 GMT
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[ By Bobby Anthony ]The Ministry of Corporate Affairs (MCA) has defended all amendments made to the Insolvency and Bankruptcy Code (IBC) in a recent submission made to the Supreme Court.The MCA told the Supreme Court that processes of corporate insolvency resolution are time-bound and the very viability of the resolution process would be over if it does not adhere to the prescribed time...
The Ministry of Corporate Affairs (MCA) has defended all amendments made to the Insolvency and Bankruptcy Code (IBC) in a recent submission made to the Supreme Court.
The MCA told the Supreme Court that processes of corporate insolvency resolution are time-bound and the very viability of the resolution process would be over if it does not adhere to the prescribed time limit.
The Supreme Court is scheduled to hear the matter on October 22.
One of the most contentious issues has been the 330-day deadline which has been prescribed for resolution of insolvency applications, including the time taken for litigation.
However, this deadline has been challenged by operational creditors.
In August, Essar Steel had challenged the latest amendments made to the IBC which had given preference to financial creditors over operational creditors.
The company had also challenged other amendments such as the extension of the corporate insolvency resolution period to 330 days from 270 days.
It may be recalled that on July 29, Union Finance Minister Nirmala Sitharaman had told the Rajya Sabha that the new amendments to the IBC had been brought to clarify the interpretation problems which had arisen due to the National Company Law Appellate Tribunal (NCLAT) ruling in the Essar Steel insolvency case.