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Most of the big cases which were pushed into resolution process under the Insolvency and Bankruptcy Code (IBC) in 2017 continue to remain unresolved despite crossing the statutory 270-day time period; which is mostly a result of the numerous disputes arising during the process. This issue has been noticed in various cases some of which are discussed below.
In the Binani cement case, the Kolkata Bench of NCLT told the Insolvency and Bankruptcy Board of India (IBBI) to review the Insolvency and Bankruptcy Code (IBC) and its regulations. The NCLT also observed that because of supremacy of the financial creditors (banks and financial institutions) in the Committee of Creditors (CoC), the claim of operational creditors is neglected or rather ignored. Therefore, operational creditors should also have a voice or say in the CoC. There is a need to reform the Regulations to ensure that it is not “misused or misinterpreted”.
The National Company Law Appellate Tribunal (NCLAT) directed the resolution professional, committee of creditors and NCLT not to pass any order in the matter related to insolvency resolution of Essar Steel. The appellate tribunal further said that the resolution professional (RP) of the debt ridden firm would ensure day-to-day running.
The NCLAT also issued notices to Tata Steel, the resolution professional and the committee of creditors (CoC) of Bhushan Steel (BSL) on a petition filed by its promotor Neeraj Singal challenging the takeover of Bhushan Steel by Tata Steel. "Let us decide the law but not stall the process," the NCLAT bench said, declining to stay Tata Steel Ltd's acquisition, but said that the resolution process would be subject to the final outcome of the case.
Thus, it has been seen that there is a need to review the IBC and its regulations.
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