oppn parties SC Asks NCLT To Stop Unnecessary Meddling In Resolution Process

News Snippets

  • In reply to a question in Parliament, the government says it is empowered to lawfully intercept, monitor or decrpyt information stored in a computer resource in the interest of sovereignty or integrity of India
  • Police stop a 12-year old girl on her way to the Sabarimala shrine
  • In Karnataka, the JD(S) indicates that it might support the BJP government if it falls short of numbers after the bypolls
  • Congress pips the BJP in local body elections in Rajasthan, winning 961 wards to the BJPs 737
  • After Airtel and Vodafone-Idea, Jio also indicates that tariffs will be raised from December
  • Sources in Shiv Sena say that they might revive the alliance with the BJP if it offers the 50:50 deal
  • A miffed Sanjay Rout of the Shiv Sena says that it will take "100 births" to understand Sharad Pawar
  • Mobile operators Vodafone-Idea and Airtel decide to raise tariffs from next month
  • Sharad Pawar meets Sonia Gandhi and says more time needed for government formation in Maharashtra
  • Justice S A Bobde sworn in as the 47th Chief Justice of India
  • Supreme Court holds hotels liable for theft of vehicle from their parking area if parked by valet, says "owner's risk" clause is not a shield from such liability
  • Finance Minister says she is receiving feedback from many sectors that recovery is happening as there is lower stress
  • Sabarimala temple opens, but police bar the entry of women below 50 years
  • Finance Minister Nirmala Sitharaman says Air India and BPCL to be sold off by March
  • Media person Rajat Sharma resigns as DDCA president
Two Muslim litigants in Ayodhya refuse to accept the Supreme Court order, say review petition might be filed
oppn parties
SC Asks NCLT To Stop Unnecessary Meddling In Resolution Process

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
The Supreme Court has rightly taken the NCLT and the NCLAT to task for admitting petitions and passing orders on issues which are under the consideration of the Interim Resolution Professional (IRP) and the Committee of Creditors (CoC) committee in an insolvency resolution dispute within the given time frame of 270 days. This unnecessarily prolongs the period of resolution and is often being used as a tool of obstruction by disgruntled parties and even the erstwhile promoters. The CoC in insolvency resolution is formed with the express purpose of taking decisions that are in the best interest of all creditors. Until and unless it takes a final view and makes its decision public, parties should not – in fact, cannot – approach the NCLT for matters to which they are not privy.

The NCLT is also at fault – first for admitting these petitions and then passing orders on just assumptions and hearsay. If the CoC has either not taken a final view or not made its decisions public, there is no material on the basis of which the NCLT can pass orders. It cannot take up the grievances of individual – or even groups of – creditors before the final view of the CoC. One hopes that after the SC observations, the NCLT will temper its exuberance and restrict itself to passing orders on issues that are in public domain and not on the supposed grievances of people.

Till now, what the NCLT has done is to put spanners in the work of CoC. Even as the CoCs are deliberating on vital issues, the NCLT passes restrictive orders. That brings the CoCs back to square one and they have to think afresh. This prolongs the resolution process to the detriment of all creditors. Given the propensity of people to file cases before the NCLT, often on frivolous issues, no resolution would have been possible if it continued in this vein. Hence, the SC has done the right thing by asking it to stop meddling in the process till the final view of the committee is known.