🔆The article analyzes the challenges faced by India's Insolvency and Bankruptcy Code (IBC) and calls for reforms to enhance its effectiveness.
Key Points:📍
Delays and Efficiency:✅IBC is plagued by delays, with resolution times increasing significantly.
✅NCLT benches face heavy caseloads and operational inefficiencies, including long delays in hearings and limited use of alternative dispute resolution mechanisms.
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Institutional Capacity:✅NCLTs suffer from inadequate infrastructure and staffing, impacting efficiency.
✅Appointments to NCLTs often lack focus on domain expertise, hindering effective decision-making in complex cases.
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Procedural Issues:✅The current framework has procedural bottlenecks, including mandatory hearings for all applications, leading to unnecessary delays.
✅Limited use of alternative dispute resolution mechanisms further exacerbates the problem.
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Need for Reform:✅The article calls for a comprehensive overhaul of the IBC, including reforms to NCLT structure, appointment procedures, and procedural frameworks.
✅Measures like specialized benches for different case types, mandatory mediation, and improved infrastructure are crucial for enhancing efficiency.
✅The focus should shift beyond debt resolution towards using IBC as a tool for economic rejuvenation.
✅Possible UPSC Prelims Question:
What is the primary reason for the increase in resolution times under the Insolvency and Bankruptcy Code (IBC)?
A. Lack of judicial expertise
B. Limited access to legal aid
C. Inefficient dispute resolution mechanisms
D. Lack of political will to implement reforms
✅Possible UPSC Mains Question:
Discuss the challenges faced by the Insolvency and Bankruptcy Code (IBC) in achieving its objectives. Analyze the role of institutional reforms, procedural improvements, and judicial expertise in enhancing the effectiveness of IBC and promoting economic growth in India.