Greetings and welcome to yet another issue of your Newsletter!
The Insolvency and Bankruptcy Code 2016 was enacted as “an Act to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto.” Seventy eight words in a single sentence! Not difficult to comprehend, though not easy to take in a single breath. No reason to worry, as we are conversant with much lengthy and more convoluting sentences in judgments. But this sentence is special; it should ring in the ears of all concerned before each insolvency case is taken up, and each resolution plan is considered. True, the Code has undergone certain creative amendments necessitated by time. It will be again so, as newer and newer challenges surface.
If we analyze the aftermath of this legislation, it can be seen that the vision envisaged, i.e., “maximization of value of assets” is not only gaining due momentum, but stands testified as well. The focus is straight and clear. And what about the stream of practice? More doubts stem; more confusions erupt! If focused better on the objects of the Code, there will be an objective move from recovery focused restructuring to value accretive restructuring. The turn around has to be seen as a necessity, and not just an option. Information memorandum and timely completion are still major challenges. Even then, the amount realized from resolution comes to the tune of Rs.60,000 crore. Is that not a success story?
On March 13, the Government has notified the creation of yet another adjudicating forum – The National Bench of the Goods and Services Tax Appellate Tribunal (GSTAT). The Hon’ble Tribunals under the IBC are reeling under pathetic infrastructure insufficiency. We need to impress upon the Government with the urgency to provide excellent infrastructure. Although orders from the constitutional courts are there, adequate infrastructure is still a question..
As news of new judgments, analyzes and notifications are in the following pages, prodding them would be laboring the obvious.
I would request our readers to join us with views, suggestions and articles. Readers’ criticism will only add strength.
Best,
