NCLT's orders can be appealed at the National Company Law Appellate Tribunal.
Some insolvency professionals say NCLT might not be able to adhere to the time frame of 14 days to admit these cases. At present, most cases have been admitted within the stipulated time. Then, there is the capacity issue with insolvency professionals themselves. Once the matter is admitted by NCLT, the debtor entity is taken over by an interim resolution professional for one month, who functions as a promoter of the company. This interim resolution professional is replaced by a fulltime one after the first month. These professionals then advise a committee of creditors.
Binani adds, "This (RBI's move) will test the ability of insolvency professionals to handle big-ticket cases. This will reflect on how many quality insolvency professionals there are."
Almost 500 insolvency professionals have accredition granted by the Insolvency and Bankruptcy Board of India (IBBI).
Nilesh Sharma, an insolvency professional with Dhir & Dhir Associates, says the government should set up a new bench that will hear cases referred by RBI. He agrees that the existing infrastructure and mechanism will not be able to take the load, as the amount at stake is huge. "Special focus is required and a special bench is advisable," he said.
So far, most cases have been filed by corporate debtors, to restructure their loans. Fearing the need for a partial write-off of their loans, banks did not file for any proceedings. Under the Code, either debtor or creditor may take the case to NCLT.
On the bench
* Insolvency professionals (IPs) demand special bench for high-profile cases
* IPs say banks
will resist taking insolvency route as it would mean going for a haircut
* IPs fear the NCLT will not be able to dispose of cases within 14 days if current arrangement remains
* Need more double-benches to tackle high-profile cases
* RBI ordinance will test the quality of IPs