NEW DELHI: Despite efforts by the federal government and the Insolvency and Bankruptcy Board of India (IBBI), there may be recent slippage within the share of company insolvency cases going beyond the mandated 270 days for decision, with a mean 521 days taken for conclusion of the method.
Data launched by IBBI confirmed on the finish of June, 65% of the cases have dragged on for over 270 days, in comparison with 61% a 12 months in the past and 75% on the finish of June 2021.
IBBI, nonetheless, stated it’s in search of to shut varied processes on the earliest and several other steps are being taken to enhance the general consequence of the code. A key concern for many stakeholders is the delay within the decision course of as cases have gone to a number of boards and several other objections have been raised throughout the train.
“The continuing increase in the percentage of cases pending for more than 270 days before the tribunals stems from the jurisprudence established by the courts whereby the time limit prescribed in the code has been held to be directory and contingent on the facts of each case. This has diluted the essence of time in the resolution process. This further gets exacerbated by the plethora of interlocutory applications filed during each resolution process for various reasons. Thus, the time expended in adjudication of such applications causes an accumulation of delays. Given the steadily increasing number of actions/ applications before the tribunals, it is crucial that the courts revisit the jurisprudence surrounding the timelines mandated under the Code such that the prescribed timelines are strictly adhered to. Thus, it will be a welcomed move if the courts can categorise various applications on the basis of gravity and a set time limit and mode of disposal for each such category. Furthermore, any deviance from prescribed time-limits may be liable to attract strict consequences,” stated Yogendra Aldak, associate at Lakshmikumaran & Sridharan.
Data launched by IBBI confirmed on the finish of June, 65% of the cases have dragged on for over 270 days, in comparison with 61% a 12 months in the past and 75% on the finish of June 2021.
IBBI, nonetheless, stated it’s in search of to shut varied processes on the earliest and several other steps are being taken to enhance the general consequence of the code. A key concern for many stakeholders is the delay within the decision course of as cases have gone to a number of boards and several other objections have been raised throughout the train.
“The continuing increase in the percentage of cases pending for more than 270 days before the tribunals stems from the jurisprudence established by the courts whereby the time limit prescribed in the code has been held to be directory and contingent on the facts of each case. This has diluted the essence of time in the resolution process. This further gets exacerbated by the plethora of interlocutory applications filed during each resolution process for various reasons. Thus, the time expended in adjudication of such applications causes an accumulation of delays. Given the steadily increasing number of actions/ applications before the tribunals, it is crucial that the courts revisit the jurisprudence surrounding the timelines mandated under the Code such that the prescribed timelines are strictly adhered to. Thus, it will be a welcomed move if the courts can categorise various applications on the basis of gravity and a set time limit and mode of disposal for each such category. Furthermore, any deviance from prescribed time-limits may be liable to attract strict consequences,” stated Yogendra Aldak, associate at Lakshmikumaran & Sridharan.
