The
Bankruptcy Bill has been passed by the Lok Sabha and is due to be passed by the
Rajya Sabha. Currently there are as many as 12 different laws which deals with
bankruptcy. The Bankruptcy bill will help to do away with so many laws and
decrease the time to deal with such cases.
Some of the points
present in the bill are:
- · Provisions to address cross-border insolvency through bilateral agreements with other countries and shorter time frames for every step in the insolvency process—right from filing a bankruptcy application to the time available for filing claims and appeals in the debt recovery tribunals (DRTs), National Company Law Tribunals (NCLTs) and courts.
- · Bankruptcy applications will now have to be filed within three months rather than the earlier six months.
- · To protect workers’ interests, the committee proposed that the money due to workers and employees from the provident fund, the pension fund and gratuity fund shouldn’t be included in the estate of the bankrupt company or individual. Further, workers’ salaries for up to 24 months will get first priority in case of liquidation of assets of a company, ahead of secured creditors.
- · There are also provisions that disqualify anyone declared bankrupt from holding public office, thereby ensuring that politicians and government officials cannot hold any public office if declared bankrupt.
The move
comes at a time when the Govt. is reeling under pressure after Vijay Mallya (ex
Rajya Sabha MP) has fled and moved to London, with a loan default of Rs 9000 crore.
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