Supreme Court judge NV Ramana, on Friday, stated that the previous government was more favourable to defaulting industrialists and that the Insolvency and Bankruptcy Code, 2016 has changed the culture in the country.
"As per the newspaper reports, till February 2020, the realizable amount through cases resolved under IBC (Insolvency and Bankruptcy Code, 2016) is around Rs 3.57 lakh crores. It is not a small figure. The advantage is that the earlier regime, that was more favourable to the industrialists who had taken the money. Now, it has changed the culture. Another important thing is, now, they are very serious. Once if you start the insolvency proceedings, you will not only be losing the assets but facing the criminal prosecution also," NV Ramana said at an event in New Delhi.
He added, "Big corporations and big people take loans amounting to thousands of crores of rupees. Banks liberally give the money. And thereafter they start some shell companies, acquire some land and install some missionary. Before starting the business itself, they will go for winding up. They will come before the High Court and file a petition for closing."
He also added that the government should take up trust-building measures. "I think it is better if we give some assurance or some sort of assurance or patting to them that if you are sincere and doing good business, the prosecution will be less," he said.
The remarks come on the day the Lok Sabha passed the Insolvency and Bankruptcy Code (Second Amendment) Bill which seeks to amend the Code so that successful bidders of insolvent companies are ring-fenced from any risk of criminal proceedings for offences committed by previous promoters of the companies concerned.
The SC Judge's remarks praising the current government comes a few days after a massive controversy erupted after Justice Mishra praised PM Narendra Modi, calling him a "versatile genius, who thinks globally and acts locally". He said, "We thank the versatile genius, who thinks globally and acts locally, Shri Narendra Modi, for his inspiring speech which would act as a catalyst in initiating the deliberations and setting the agenda for the conference. India is a responsible and most friendly member of the international community under the stewardship of internationally acclaimed visionary Prime Minister Shri Narendra Modi.”
(with inputs from agencies)