Panel proposes timelines for approving resolution plans

A key government panel has proposed tweaks to Insolvency and Bankruptcy Code (IBC) to ensure timebound resolution of cases, including a 30-day deadline for an adjudicating authority to dispose of a resolution plan.

Insolvency Law Committee, headed by corporate affairs secretary Rajesh Verma, has suggested measures including introduction of timelines for approval or rejection of resolution plans and use of digital databases for claim submission from creditors.

It has proposed to bring in new rules to ensure clarity on avoidance transactions being instituted after the resolution plan is implemented in its 66-page report submitted to the finance ministry last week.

As per the recommendations, the adjudicating authority will be required to approve a resolution plan within 30 days, failing which it will have to record reasons for the delay in writing.

Also, to expedite the process of proving default and consequently avoid delays in admission of applications, it has been proposed that certain financial creditors should be mandated to submit records already authenticated by information utilities.