SC initiates debate on preventing delays in insolvency resolution of debt-ridden firms...

    SC initiates debate on preventing delays in insolvency resolution of debt-ridden firms

    Amid flooding of cases in the NCLT and NCLAT, the Supreme Court on Thursday initiated a debate on ways to prevent delays in insolvency resolution of debt-ridden firms due to continued adjudication, saying all delays "must stop". A bench of Justices R F Nariman and Indu Malhotra took note of the fact that the Insolvency and Bankruptcy Code provided for time-bound disposal of the resolution process meant to revive a company, but delays and several rounds of intervention by authorities like National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) defeated the purpose of the statute.
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    “Make the Act (the Insolvency and Bankruptcy Code) work, otherwise everything will go for a six,” the bench said, adding that all the kinds of delays “must stop”.

    Earlier, the cases used to remain pending for years before the Board for Industrial and Financial Reconstruction and the Appellate Authority for Industrial and Financial Reconstruction under the Sick Industrial Companies Act, it said.

    “The only beneficiaries used to be the promoters of the defaulting companies,” the bench said.

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