NEW DELHI : Using technology and having more manpower could help in speeding up rescuing companies undergoing bankruptcy proceedings, according to Rajesh Verma, secretary in the ministry of corporate affairs.
The ministry is currently in the process of finalising amendments to the Insolvency and Bankruptcy Code (IBC) to make it more efficient.
Speaking at an event organised by the National Company Law Tribunal (NCLT), Verma suggested that to enhance the effectiveness of IBC, introduction of a cross border insolvency framework in the IBC is being considered. “Leveraging technology and filling up posts are two key factors in increasing the speed,” an official statement from the ministry said quoting Verma.
The government is currently in the process of filling up vacancies in NCLT to reduce the backlog of cases.
Chief Justice (Retd.) Ramalingam Sudhakar, who was the chief guest at the event, said that one aspect for early resolution of cases is the development of artificial intelligence (AI) technology for speedier dispensing of justice. “AI can be used in case resolution, especially in admission of cases,” the statement said quoting Sudhakar.
Ravi Mital, chairman of Insolvency and Bankruptcy Board of India (IBBI), who was present on the occasion, said that with more standardization, the speed of resolution of cases can be increased. IBBI is always ready to collaborate with NCLT in simplification of the process of resolution, he said.
Delays in admission of cases in the tribunal and the extent of haircuts taken by lenders while approving restructuring of companies under new management were two concerns raised by a Parliamentary panel last year. The amendments under the consideration of the ministry aims to address this. To be sure, NCLT handles not just bankruptcy cases, but also other cases under the Companies Act.
NCLT has so far disposed of three-fourth of the over 83,800 cases filed before it since its inception in 2016.
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