Illustration by Binay Sinha
A framework for group insolvency is another such change which is in the works, with a working group already being set up by the regulator. While the National Company Law Tribunals have done a phenomenal job of organically permitting coordinated proceedings for group companies without any statutory direction, an enabling framework on the issue will be beneficial in the long run.
Another spoke in the wheel is the introduction of cross-border insolvency provisions in India. News reports suggest that a Dutch court has ordered the bankruptcy of Jet Airways. It is only a well-defined cross-border insolvency law framework which can provide clarity on how such orders from foreign jurisdictions will apply to Indian assets and creditors of the bankrupt and vice versa.
But, one red flag must be raised, which is adding to the delays in proceedings. This is the judicial scrutiny of commercial decisions taken by the committee of creditors of a debtor. While the law is clear on this front and the Supreme Court has taken the view that the legislature has not empowered the tribunals to pass judgment on such decisions, we see continued judicial analysis of such decisions.
It is heartening to see that each of the above issues is being dealt with in some form or another. This is what fuels our hope in the IBC becoming the comprehensive law that the Bankruptcy Law Reforms Committee had envisioned.
The writer is founding partner, AZB & Partners