'Insolvency and Bankruptcy Code 2016 has direct impact on economy'

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SME Times News Bureau | 16 Oct, 2017
Revival of Sick Companies in India not only benefits the company but assists in achieving High Gross Domestic Product, generate employment and ultimately economy grows at a reasonably faster pace said Justice A.K Sikri while addressing the august gathering as special chief guest in a conference on Insolvency and Bankruptcy Code 2016, A Game Changer organized by BRICS Chamber of Commerce and Industry with Achromic Point Consulting Pvt Ltd. in India Habitat Center, New Delhi.

"It is in the better interest of Indian economy to look for all possible options to revive troubled companies," he added.

Foreign Companies invest in India to get good returns out of the principal amount spent on setting up production units. In order to attract FDI, friendly business environment is mandatory and cumbersome process of getting numerous approvals make us loose foreign investors. Justice Sikri opined external factors can make any company go sick. Steel Industry, for instance in India started facing trouble because of external factors and competitive low rates offered by China to the world market. Similarly, realty sector witnessed boom in previous years but mismanagement of company directors made it suffer a lot.

Change of management in a sick/troubled company is a significant provision in Insolvency and Bankruptcy Code 2016, he added. Balanced and fair negotiations between the debtor and creditor and amending law in favor of home buyers, time limit with in which resolution has to be done makes it unique unlike other acts passed and creditors and stakeholders interest is considered. Law and economic combination is needed for economic growth said Justice Sikri while addressing the audience in conference organized by BRICS Chamber of Commerce and Industry.

Chief Guest Justice S.J Mukhopadhaya, Chairperson National Company Law Appellate Tribunal in the inaugural session lamented Tribunal has reviewed two petitions through IRP as of now, one has been passed and other has been rejected. While answering to a query of audience on Housing Sector, Justice said if home buyers are willing to get their money back and do not want the flat then they are creditors not debtors.

Dr. B.B.L Madhukar, Secretary General of BRICS Chamber of Commerce & Industry mentioned further simplification of the code would be commendable and this would indeed prove to be a game changer for Indian economy.

Amarjit Singh Chandhiok, President INSOL- India, Former Additional Solicitor General of India, Principal Counsel, State & Judicial Affairs, EU commission in his keynote address said many positive changes have been observed during last 8-9 months and suggested to introduce 'Residuary Creditors' on sidelines of 'Financial Creditors' and 'Operational Creditors'. Individual Bankruptcy and Defaulters can be dealt by Subordinate/Individual Judges to make the process fast.

N.P.S Chawla, Associate Partner, Vaish Associates Advocates who were knowledge partner in the conference in his address said robust mechanism and Proper implementation of the Insolvency & Bankruptcy Code is need of the hour. Out of 3800 applications filed under the code only 370 have been admitted which is less than 10 per cent.

Satwinder Singh, Partner, Vaish Associate Advocates; Sajeve Deora Director – Integrated Capital services; P.S Rawat, Ex- Executive Director Canara Bank and C.S Harish K. Vaid Vice President Council of The ICSI were also present and enlightened the public on this topical issue.