In as much as the Government has been in the consistent process of encouraging business operations in the nation, it also has the objective to create more transparent and systematic mechanism ensuring time bound manner and for maximization of the value assets. One of the major challenges faced by the modern commercial sector is the reposition of faith of the creditors who put their hard-earned investments at the fate of the success of the business transactions undertaken.
The enforcement of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”) aims to balance the interests of all stakeholders by making the legal framework stronger in terms of reorganization and insolvency resolution of corporate persons. The IBC has been devised to complete the process or resolution within a period of 180 days from the date of admission of the application to initiate such process.
The insolvency resolution professional (hereinafter referred to as “IRP”), appointed under the IBC, is entrusted with the responsibilities of verification claims of all the creditors; taking into his custody or evaluate all the assets, property, effects and actionable claims of the corporate debtor; take measures to protect and preserve the same; carry on the business of the corporate debtor for its beneficial liquidation, etc.
The expeditious resolution system improves the global ranking of the country on the ‘Ease to do Business’ in the international scenario. Instilling faith the judicial authority in the aiding recovery of the lent credit, the IRP works out for opportunities to revive the company under insolvency resolution process before eventual disposal of assets to pay off its debts. The stricter provision of the IBC and their effective enforcement have made it an active vehicle in order to resolve the problem of bad loans.
The latest move…
In order to recover its unpaid dues, One 97Communications, the parent company of digital payments provider Paytm, has moved insolvency court against Reliance Telecom, a subsidiary of Reliance Communications – RCom.
Debt-laden RCom has already been in process of selling its assets in order to discharge its liabilities towards its creditors. The insolvency court – National Company Law Tribunal (hereinafter referred to as “NCLT”) may admit the application filed by One 97Communications considering the information utility or other evidence produced by them. Post the commencement of the resolution proceedings and recruitment of an appropriate IRP, the fate of the company shall be decided ascertaining that the creditors are duly paid in accordance with the provisions of IBC.
The fast-track and stringent insolvency resolution legal machinery offered by IBC safeguarding the interests of the creditors while balancing them against the chances of breathing a new life into the company which otherwise was on the verge of its end.