National Company Law Tribunal (NCLT) established under the Insolvency and Bankruptcy Code 2016 (IBC), initiated by the Narendra Modi Government with the main object of “Doing business with ease” has hardly served MSME sector, as the proprietary concerns and partnership firms are still outside the purview of the NCLT.
In fact, the NCLT was set up by the Union government under IBC to help the NPA accounts to resolve their problems and restructure the business while maintaining the employment. However, presently it is available only to the corporates. MSME sector, which is mainly in the form of proprietary, and partnership firms are being neglected, alleged Dr. Visswas Paanse, Ex-banker and NPA activist.
Talking to reporters Dr. Visswas said the small and medium entrepreneurs other than corporates who are NPA’swere not getting any opportunity to revive their business under The Board for Industrial and Financial Reconstruction (BIFR) and now under IBC as well.
Even at present the corporates which are applying to NCLT, either under section 7, 9, or 10 are not getting dates for 3-4 months. According to law they should get an opportunity to be heard within 15 days. The corporates are thus deprived of taking advantage of this new law and banks are getting undue upperhand for destroying the existing businesses.
The Process of resolution under IBC have to be completed within 6 months, from the date of admission, which may be extended, to further 3 months. However, presently even after the extension beyond 6 months is not enough and the cases are always deferred for more than 9 months. This delay is interpreted, as the time limits set under IBC are directory and not mandatory. This is however not in the spirit of IBC, says Dr. Visswas.