Illustration: Ajay Mohanty
The government is mulling making official liquidators (OLs) relevant in the insolvency and bankruptcy process, since they have now become redundant. A senior official from the Ministry of Corporate Affairs said OLs might be asked to become resolution professionals in big insolvency cases.
“They have the experience of handling liquidation, including the big ones, so they should be allowed to handle big ticket IBC cases. The official liquidators can be entrusted with such cases as the code evolves,” the official said. In the pre-insolvency and bankruptcy code (IBC), OLs were engaged in the winding up process of companies, which is done by resolution professionals.
These liquidators still have pending cases from the pre-IBC era. According to ministry officials, 5,000 cases in the country are pending with these official liquidators. The officials said that some of Kingfisher Airline’s planes and Sahara’s Amby Valley are in possession of the official liquidators.
The officials said they have not been able to complete some of the cases, as the law that time did not have a fixed time period for resolution.
But the IBC now has a moratorium. If the case is not resolved within a maximum of 270 days, the company concerned will go for liquidation.
With the IBC coming into force, any company that wants to wind up voluntarily can file a case in the National Company Law Tribunal. The company can wind up provided it does not have any default.