New Delhi: A parliamentary committee Thursday flagged “ambiguities” in the Insolvency and Bankruptcy Code (IBC), with sources saying that the government appeared to be considering amendments in the law to address existing concerns.
Sources said the recent Supreme Court judgment quashing JSW Steel’s resolution plan for Bhushan Power and Steel Ltd (BPSL) also came up in the deliberations of the Standing Committee on Finance headed by seasoned BJP MP Bhartruhari Mahtab, a order which has triggered a debate over the efficacy of the insolvency mechanism.
The apex court Monday put a status quo on BPSL’s liquidation, which it had ordered in its last month’s verdict, on a plea by JSW Steel as the company argued that the liquidation would be detrimental to it, lenders, and employees.
Corporate Affairs secretary and representatives of several banks appeared before the committee Thursday as its members discussed the agenda of the “review of working of Insolvency and Bankruptcy Code and Emerging Issues”.
Sources said some committee members flagged deficiencies like delay in resolution process, and it was noted that the previous panel, headed by Jayant Sinha, in its report had also highlighted certain gaps in the law and recommended some changes. The government had accommodated some of the suggestions in an earlier amendment of the law.
“We believe that the government is very much in the thick of things as far as addressing the issues related to the IBC are concerned. We got the view that there may be more amendments in the offing,” a source said.
He said the IBC, in many cases, has served the company in distress and the creditors well.
“Any law is a dynamic process. It evolves with time,” he said, adding that the IBC was enacted in 2016 and has proved helpful in several cases.
PTI
