Lok Sabha Question No. 1250 (UNSTARRED), answered on 2021-12-06
Subject: Claims under IBC
Ministry: CORPORATE AFFAIRS
Asked by: Pinaki Misra

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 1250 ANSWERED ON MONDAY THE 6 TH  DECEMBER, 2021 AGRAHAYANA 15, 1943 (SAKA)

## CLAIMS UNDER IBC QUESTION

1250. SHRI PINAKI MISRA:

Will the Minister of CORPORATE AFFAIRS

be please to state:

- (a) the details of the recovery rate against the admitted claims under the Insolvency and Bankruptcy Code, 2016 during the last three years;
- (b)  the  number of cases in which more than or equal to 50 per cent haircut have been accepted by the creditors;
- (c) the percentage of insolvency proceedings not resolved within the stipulated timeline specified under the IBC, 2016, year-wise;
- (d) the reasons underpinning the delayed resolution and heavy haircuts;
- (e)  the  steps  taken  by  the  Ministry  to  address  the  issues  of  delayed  resolution,  less recovery rate and heavy haircuts; and
- (f)  the  status  of  professional  Code  of  Conduct  for  the  Committee  of  Creditors  and  the expected timeline for its notification?

## ANSWER

MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTATION; MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF PLANNING; AND MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFFAIRS

## [RAO INDERJIT SINGH]

- (a): According to data available with the Insolvency and Bankruptcy Board of India (IBBI), during  the  period  of  three  years  from  April  2018  to  March  2021,  348  corporate insolvency resolution processes ended with resolution plans. The realizable value for creditors in these cases was 36.31% of their admitted claims.
- (b): Upto 31 st  March, 2021, in 252 of the 348 cases resolved under the IBC, creditors have accepted realization of 50 per cent or less of their admitted claims.
- (c): The percentage of insolvency proceedings not resolved within the stipulated timeline of 330 days is as following:
- (d): Insolvency resolution process is market driven and the outcome depends on market forces. In addition to this the time taken for resolution and actual realisations depends on  several  factors,  including  the  nature  of  business,  business  cycles,  market sentiments, and marketing effort. It, however, critically depends on at what stage of stress, the company enters the IBC process. If the company has been sick for years, and the assets have depleted significantly, the IBC process may yield low realisations
- (e): Government is taking all steps to strengthen the NCLT, in order to reduce the delays in disposal of cases. Five new Benches of NCLT have been announced during year 2018 and 2019 at Jaipur, Cuttack, Kochi, Indore and Amaravati. Vacant posts of Members in NCLT are being filled up regularly. Government has appointed 19 new Members in NCLT recently. For capacity building of Members, regular colloquiums are being held. e-Court Project  is  also  being  implemented  by  National  Informatics  Centre  (NIC)  for  all  the benches of NCLT. To enable value maximization, IBBI (Insolvency Resolution Process for  Corporate  Persons)  Regulations,  2016  were  amended  to  enable  the  resolution professional    to use a challenge mechanism to enable resolution applicants to improve their resolution plans. Further, to monitor delayed insolvency resolution processes, the IBBI (the Regulator) has introduced a Form to be filed by the resolution professionals
- (f):  IBBI  (Insolvency  Resolution Process for Corporate Persons)  Regulations, 2016 were amended to provide that Committee of Creditors (CoC) and its members shall discharge functions and exercise powers under the IBC in compliance with the guidelines as may

| 2018-19   | 16.41%   |
|-----------|----------|
| 2019-20   | 20.92%   |
| 2020-21   | 45.86%   |

for creditors or may result in even liquidation. on monthly basis. be issued by IBBI.

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