Cong says IBC amendments to 'patronise' preferred corporates; BJP blames UPA for bank NPA

The bill, already passed by Rajya Sabha, proposes that fresh insolvency proceedings will not be initiated for at least six months starting from March 25 amid the coronavirus pandemic. Countering his criticism, Nishikant Dubey of the BJP said the Insolvency and Bankruptcy Code has changed the culture, and its recovery rate has been between 42.5 to 45 per cent.

The Congress on Monday dubbed the government as "ordinance-savvy", accusing it of promulgating one ordinance after another under the pretext of the COVID-19 crisis. Speaking in Lok Sabha during a discussion on the Insolvency and Bankruptcy Code (second amendment) Bill 2020, its leader Adhir Ranjan Chowdhury said the constitutional measure of bringing ordinance should be resorted to as an exception and not rule.

Criticising the bill, which replaces an ordinance, he said it is "weakly constructed with minimum logic and a lot of grey area". "It is nothing but is aimed to patronise their (government) preferred corporates," he alleged, adding the MSME sector will be its worst casualty.

The bill does not safeguard any stakeholder, and the government is trying to save corporate debtors, he alleged. He also claimed that under the Corporate Insolvency Resolution Process (CRIP), the success rate has been very low.

There has been a "poor and dismal" performance under you, he said, referring to Finance Minister Nirmala Sitharaman. The bill, already passed by Rajya Sabha, proposes that fresh insolvency proceedings will not be initiated for at least six months starting from March 25 amid the coronavirus pandemic.

Countering his criticism, Nishikant Dubey of the BJP said the Insolvency and Bankruptcy Code has changed the culture, and its recovery rate has been between 42.5 to 45 per cent. All the non-performing assets of Rs 14 lakh crore on banks that the Modi government inherited happened during the UPA government's time, he said.

The recovery rate under various laws during the UPA government was anywhere between three to 14 per cent, Dubey said, adding that the bill was required to save industry and people's employment, which have been hit hard by the COVID-19 pandemic. He said the people have faith in Prime Minister Narendra Modi who is working to save the country from the pandemic, and hit out at the Congress, saying it is the same party which had questioned people's faith in Lord Ram.

TMC's Pratima Mondal said the bill is a classic example of good intentions but bad drafting, while the YSR Congress welcomed it. Supriya Sule of the NCP spoke about the woes of Jet airways and asked as to why it is being treated differently from a government-run airline like Air India.

When a government-run company makes a mistake, it is alright, but in the case of a private company, it is always corruption, she said, adding that Jet Airways has a huge hub. BJD's Pinaki Misra said the legislation is very much in order but asked as to why an important body like National Company Law Appellate Tribunal (NCLAT) has remained headless for so long.

In the wake of the COVID-19 situation, the government decided to suspend the insolvency provisions starting from March 25 for six months by promulgating an ordinance in June. Default on repayments from March 25, the day when the nationwide lockdown began to curb the coronavirus infections, would not be considered for initiating insolvency proceedings for at least six months.