NEED FOR A MODERN
INSOLVENCY LAW
‘As long as stakeholders
of a company can not strike a proper balance amongst themselves,
owners of a company try to swindle for maximizing their returns,
creditors of a company make it so painful for the owners of the
company through litigation or otherwise that a potentially revivable
company dies before it should have died, insolvency law would
always be there to sustain confidence of investors’ This was stated
by the Minister of State for Law, Justice, Coal and Mines, Shri
Ravi Shankar Prasad while addressing a conference on Insolvency
Laws in India and the Proposed Legislation, organized by INSOL
India and the Congress Theme here this evening.
Talking of the
implementation of insolvency laws, the Minister said that it must
meet the financial objective of ‘asset maximization’. However,
because of inordinate delays the productive resources of the unit
remained blocked and unutilized assets lost value. It was in this
context that the Minister said that the proposed Companies Amendment
Bill, 2001 provided for single window of National Company Law
Board Tribunal which could give focused attention to company matters.
The tribunal would be a repository of expertise in the area of
Company Law, majority of members drawn from various fields of
accountancy, management, industry and law. The proposed law of
insolvency intended to reduce the entire process of winding up
of the companies from the existing 20-25 years to two years by
providing for time bound disposal or revival. Besides, it would
identify sickness, change definition of sickness in tune with
the definition prevalent among financial institution as prevalent
globally to meet the challenges of liberalization of Indian economy.
The senior most
judge of the Supreme Court of India, Shri Justice G.B. Pattanaik
inaugurated the conference. The other star speakers included Shri
Justice D.P. Wadhwa, President, National Consumer Disputes Redressal
Commission, Shri Justice Manmohan Sarin, Judge, Delhi High Court,
Shri P. Chidambaram, former Finance Minister, Dr. A.M. Singhvi,
Former Addl. Solicitor General of India and Shri Justice S.B.
Sinha, Judge, Supreme Court of India.
