NPAs: Rs 80k cr recovered via NCLT, Rs 70k cr more expected

In a Facebook post, titled “Two years of Insolvency and Bankruptcy Code” (IBC), Jaitley said so far 1,322 cases have been admitted by the National Company Law Tribunal (NCLT) and while 66 have been resolved after adjudication, 260 cases have been ordered for liquidation.

Citing the NCLT database, the Finance Minister said that 4,452 cases had been disposed of at the pre-admission stage and the amount so settled was around Rs 2.02 lakh crore.

“In 66 resolution cases, realisation by creditors was around Rs 80,000 crore. Some of the big 12 cases such as Bhushan Power and Steel, and Essar Steel India are in advanced stages of resolution and are likely to be resolved in this financial year in which realisation is expected to be around Rs 70,000 crore,” Jaitley said.

He said the NCLT was “immediately constituted” and the Insolvency and Bankruptcy Board of India (IBBI) established soon after the IBC was operationalised in December 2016.

“Those who drive the companies to insolvency, exit from management. The selection of new management has been an honest and transparent process. There has been no political or governmental interference in the cases,” he said, describing the working of the insolvency process so far.

“The early harvest through the IBC process has been extremely satisfactory. It has changed the debtor-creditor relationship. The creditor no longer chases the debtor. In fact, it is otherwise,” he said.

He noted that after introduction of the IBC amendment that debars loan defaulters from bidding for stressed assets, such companies are paying up in anticipation of “not crossing the red line and being referred to NCLT.”

“As a result, the banks have started receiving monies from the potential debtors who pay in anticipation of the default. The defaulters know well that once they get into IBC, they will surely be out of management,” Jaitley said.

“Secondly, once a petition of the creditor is filed before the NCLT, many debtors have been paying at the pre-admission stage so that the declaration of insolvency does not take place,” he added.

The Minister also noted with the “overcrowding” of NCLT due to the filing of a large number of cases, “its capacity is now being further enhanced.”

Some rules under the Code have been questioned in the court and the Supreme Court’s recent pronouncement on the frivolity of certain appeals is likely to expedite the resolution process.