Arguing for better regulation of the Committee of Creditors (CoC) formed under the Insolvency and Bankruptcy Code, NCLAT Chairperson Justice Sudhansu Jyoti Mukhopadhaya said on Monday.
That the Insolvency and Bankruptcy Board of India (IBBI) should be given more powers so that it can effectively regulate the entire insolvency ecosystem, he said. Asking whether IBBI is a regulator or merely a guiding authority, he said “more power (is) required to be given under the Act to the IBBI.” Nearly 10 per cent of the cases admitted for resolution under the IBC go in for appeal at the National Company Law Appellate Tribunal.
Delivering the first annual day lecture to commemorate establishment of the IBBI, he suggested that there has to be a regulatory body for CoC. There has to be a regulatory body for CoC on how they function, otherwise “it would be very difficult for process to follow because for every matter, a court cannot lay out the law”, he noted. Under the Code, the CoC represents the creditors and a resolution plan requires its approval before being finally cleared by the tribunal.
According to Mukhopadhaya, 1,100 corporates are undergoing insolvency resolution process and about 250 of them have completed the process by resolution or liquidation. Around 250 corporates have commenced voluntary liquidation, he added.
Mukhopadhaya argued that IBBI should be empowered on the lines of Sebi.