There is no need of a separate Insolvency Law for the present.Liquidation and Rehabilitation 7.1 The Insolvency law should strike a balance between rehabilitation and liquidation.Special care should be taken to ensure that this is not misused by any stakeholder to delay proceedings, strip asset value or otherwise work to the detriment of the business and other stakeholders.Time bound proceedings 9.1 A definite and predictable time frame should be provided for attempt at rehabilitation and for the liquidation process.The existing time frame in India is too long and keeps precious assets locked in proceedings for many years, destroying their value in the process.9.2 A period of one year should be adequate for rehabilitation process from commencement of the process till sanction of a plan.7.4 The Insolvency process should be overseen by a neutral forum in a non-intrusive manner.
However, the process is not complete and a lot yet needs to be done.
The Committee hope that this is done speedily and are of the view that its establishment would provide a major initiative for the reform of the insolvency system in the country. Law should provide a reasonable opportunity for rehabilitation of a business before a decision is taken to liquidate it so that it can be restored to productivity and become competitive.
However this opportunity should incentivize genuine effort.
It should provide an opportunity for genuine effort to explore restructuring/ rehabilitation of potentially viable businesses with consensus of stake holders reasonably arrived at.
Where revival / rehabilitation is demonstrated as not being feasible, winding up should be resorted to.