Parliamentary Panel Flags IBC Gaps After BPSL Ruling
Why in the news
The Standing Committee on Finance looked at gaps in the Insolvency and Bankruptcy Code (IBC) after the Supreme Court rescinded JSW Steel’s resolution plan for Bhushan Power and Steel Ltd (BPSL).
Key facts
- The Court also put status quo on BPSL’s liquidation after JSW Steel’s plea citing harm to the company, lenders and employees.
- Issues: ambiguities, inadequacies and delays in resolution.
- An earlier committee headed by Jayant Sinha had flagged similar gaps; some of its advice entered early government amendments.
- Government says it is addressing concerns and may bring further amendments; it calls IBC a useful tool for distressed firms and creditors.
About IBC
- Enacted in 2016.
- Gives a clear legal framework for insolvency of individuals, partnership firms and companies.
- Aims at timely revival of stressed businesses and efficient recovery for creditors.
Significance
- Amendments aim to cut delays and clarify rules.
- Reviews seek balance between creditor rights and revival, aiding investor confidence.
Exam angle
- IBC year: 2016.
- Case: JSW Steel vs BPSL.