This refers to the "Amendments in IBC to provide for mediation" (April 22). The government's move to amend the Insolvency and Bankruptcy Code (IBC) by making provisions for mediation and prepackaged resolution is of immense importance that may help iron out the glitches in insolvency proceedings experienced over the past few years. In many cases, these proceedings could not be completed within the stipulated time frame due to multiplicity of litigations. This has restricted the IBC in fully achieving its intended objectives.
Mediation as a tool for exploring mutually beneficial solutions is a low-cost option that also saves precious time for both the parties. This must be given a chance before actually resorting to insolvency proceedings. Similarly, prepackaged resolution that stipulates preparation of a financial reorganisation plan by the stressed company with the approval of at least two-thirds of the creditors before filing an insolvency application at the National Company Law Tribunal is also a good proposal and must be seriously considered. This is likely to provide swift resolution and with less legal hurdles as the plan will have the approval of a majority of the creditors right from the beginning and therefore, should ensure smooth sailing.
Sanjeev Kumar Singh
Jabalpur