PR No – 32
6th February, 2024
Summit on Insolvency & Bankruptcy Code, 2016
The PHDCCI’s NCLT & IBC Committee successfully organized the Summit on Insolvency & Bankruptcy Code, 2016’ themed ‘Watershed Moments in India’s Insolvency Landscape through Judicial Pronouncements’ on 3rd February 2024 at PHD House, New Delhi.
The Chief Guest Dr. Sanjeev Ranjan, Hon’ble Member (T), NCLT in his address complimented PHDCCI for having organized this summit and emphasized that for an evolving code like IBC it is important that all the stakeholders meet and figure out a way to take it forward. He informed that there are challenges which keep emerging and that we need to sort it out as we come across them. He further highlighted that the entire IBC process is a market-driven process. Instead of it being run by some regulatory authority alone or some dictate being given by somewhere, it is the market and the various stakeholders which ensure that the process runs through seamlessly and therefore, these market mechanisms which are at play have to be made more efficient. He informed that there are challenges which have come about which have been resolved by various pronouncements, regulations, etc. but it is an evolving field and therefore it is important that symposium like these where everyone comes together, looks at the challenges and the possible resolutions.
The Guest of Honour for the session, Dr. U K Chaudhary, Sr. Advocate & President, NCLT Bar Association mentioned that this legislation has actually turned into an implementable legislation only because of the watershed moments. Judicial interpretation of this new legislation by Suprement Court, NCLAT and NCLT has actually turned out to be the watershed moments. He mentioned about the very first judgment given by the Supreme Court of India, literally running through the length and breadth of the entire IBC Code and that was the 1st watershed moment in the IBC Code. This judgment was Innoventive Industries Ltd. Vs. ICICI Bank. He also mentioned about the judgments of Arcelormittal India Pvt. Ltd. Vs. Satish Gupta, Swiss Ribbons Pvt. Ltd. Vs. Union Bank of India and CoC of Essar Steel Vs. Satish Kumar Gupta & Ors. Which must be read by everyone who wish to know the larger scope of the legislation. He also named various important Judgments which dealt with the process of CIRP. He mentioned about another watershed Judgment in Pioneer Urban Land & Infra & Manish Kumar Vs. Union of India dealing with first time the issues relating to the Home Buyers and Real Estate Issues.
Mr. G P Madaan, Chair, NCLT & IBC Committee, mentioned that since inception of the IBC Code, it has been observed that some negative news about the Code have been spread by the Media, because the Negative sells. Nobody realized that for 3 log years we had the pandemic, the NCLT bench strength was not adequate. We were having not even 50% of the total sanctioned bench strength. NCLT was constituted under Companies Act 2013 for the purpose of Companies Act only. It’s only after the introduction of Insolvency & Bankruptcy Code, 2016 NCLT was named as Adjudicating Authority under the Code and that was the second role given to NCLT apart from the primary role which was given under Companies Act 2013. He mentioned that despite all these we saw resolutions and recoveries. During last some months the bench strength is almost 90%. We have seen a number of cases being resolved. IBBI has recently acknowledged and released the figures that under CIRP till date Rs. 3.16 Lac Crores has been realized by the lenders and that it is the beginning. The number of applications which have been withdrawn after initiation but before commencement is 26000 having a total underlined debt of Rs. 9.3 Lac Crores and that is the victory of this legislation. Now a days when a demand notice/legal notice is issued, the very next day the defaulter is with the lender and tries to settle the issues. Our NCLT Benches have been working day and night. The gross NPAs of banks have come down below 3% and net NPAs are less than 1% now which has never been seen in past in the Indian Banking Sector. He also mentioned about the important Judicial Pronouncements i.e Rainbow, Raman Ispat, Vidarbha Industries, Jet Aiways, Jaypee Infra, Airtel etc.
He also highlighted that the so called haircut should not be seen in relation to amount claimed. The haircut has a direct correlation with liquidation value. He mentioned that earlier 80% of the companies were going into liquidation and 20% for resolution. The said ratio at present is 50:50. Even in the first 2 days of February, four resolution plans have been approved by NCLT. He shared his insights into how NCLT has been working tirelessly over the years.
Citing the example of Patanjali Foods (earlier Ruchi Soya) bidding for ailing Rolt India with all cash deal of Rs 850 crores, he said that now the erstwhile insolvent companies have, after resolution, become resolution applicants.
Sometimes the regulations are not clear, interpretation issues are there or regulations are silent on certain issues. Many of the Judicial Pronouncements, particularly from NCLT & NCLAT, have led to amendments in the regulations by the IBBI.
Ms. Manisha Chaudhary, Co-Chair, NCLT & IBC Committee, mentioned that the theme of the summit has been chosen by NCLT & IBC Committee because of a specific purpose. We all have been always discussing how the problems of the IBC should be solved. With this theme we wish to highlight the positive side of this code. She mentioned about the judgements which have put forward the regime of IBC Code and also how to positively take this forward.
Mr. Karan Mehra, Co-Chair, NCLT & IBC Committee thanked PHDCCI for constituting NCLT & IBC Committee. He informed that the committee is a platform for all the stakeholders. This committee brings all of us come together under one roof & work together to make this regime a success and grow further. He also apprised the audience about the PHDCCI NCLT & IBC website (www.ncltibcphdcci.in) which has been launched in August 2023. He requested everyone to visit this portal which shares information w.r.t the events of the committee including Past and Forthcoming. Among other features, the website has blog section where the stakeholders get the facility to publish their articles for the benefit of entire fraternity. He
Mr. Abhishek Anand, Co-Chair, NCLT & IBC Committee informed about the judicial evolution that started and how all issues pertaining to IBC Code, the Companies Act & Mergers & Acquisition came before one tribunal which is NCLT.
The summit was partnered by Khaitan Legal Associates, UKCA and Partners LLP, Noida Holdings Pvt. Ltd., ARCK Resolution Professionals LLP, Sasttra Legal (Advocates Solicitors), VR Asset Resolution Consultants, Utkrishtha Insolvency Professionals, Cicero Law Firm, AAA Insolvency Professionals LLP and Ducturus Resolution Professionals. The knowledge partners of the summit were Madaan Law Offices, Law Offices of A Anand & Vishnu Mehra & Co.. and was supported by PHDCCI annual sponsors, DLF Ltd; Jindal Steel & Power; KLJ Group; Multani Pharmaceuticals Ltd; Marble City; MMG Group; Radico Khaitan Ltd; Uflex Ltd; Vestige; Eazy ERP Technologies; JK Tyre & Industries Ltd; Sagar Group of Industries; Superior Industries Limited; Samsung India Electronics; Oswal Greentech; Apeejay Stya Group; Blossom Kochhar Beauty Products Pvt Ltd; DCM Shriram; R E Rogers; Trident Group; Ajit Industries Pvt Ltd; Bhagwati Plastic and Pipes Industries; Central Coalfields Ltd; DD Pharmaceutical Ltd.; Hindware Sanitary; Jindal Steel; Modern Automobiles; P S BEDI & Co.
PHD Chamber of Commerce and Industry