The Insolvency and Bankruptcy Code (IBC), which established a supportive atmosphere for aspiring entrepreneurs, has a significant part to play in India’s new “startup culture,” according to Justice Sanjay Kishan Kaul of the Supreme Court, who made this statement.
When discussing the “Emerging Global Insolvency Horizon: Indian Footprint and Front View” at the Insolvency Law Academy’s inaugural conference, Justice Kaul noted that since the early 1990s, India’s economy has been expanding, which has resulted in an increase in the credit market.
“In my opinion, the IBC has also had a big role to play in India’s new startup culture by creating a conducive environment for budding entrepreneurs,” he said.
According to Justice Kaul, the growth in non-performing loans and assets is a direct effect of the credit market’s expansion.
“To solve this problem, the Insolvency and Bankruptcy Code was enacted in 2016 primarily to serve two purposes — first, to ensure that debtors take sound and practical decisions and second, to give financially-ailing corporate entities a chance to rehabilitate and continue their business.
“The IBC essentially consolidated laws relating to insolvency resolution of companies, partnerships, and individuals. Hence, the implementation of the IBC in India marked the beginning of a new era that completely overhauled India’s insolvency regime,” he said.
According to the justice of the supreme court, there were difficult problems that needed authoritative and decisive solutions in the early years of the code’s application.
However, he said, this gave all experts the chance to contribute to building an impenetrable basis in addition to the judiciary.
According to Justice Kaul, variety in Indian society must be reflected in all spheres of life since it offers a range of perspectives, experiences, and useful solutions to the table.
“I believe that the main issue in ensuring a successful representation is unconscious bias. This has led to a vicious cycle where on one hand, newcomers are not given a platform to showcase their talent due to their lack of experience.
“But on the other hand, these newcomers cannot find that experience if opportunities are not granted to them. Hence, I look forward to following how the discussions on bringing diversity into the process of insolvency, along with gender inclusivity, are dealt with by the panellists,” he said.
The National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal may be less burdened as a result of mediation, according to the judge (NCLAT).
“Alternative resolution of such disputes will not only provide an avenue to the entities without facing an adversarial process but can also result in speedy and cost-effective solutions for the creditors. We have to realise that these are not professional creditors so as to say.
“These are people who have invested their life savings to be able to cherish the dream of owning their own house. In these cases, it becomes all the more urgent to ensure that the relief extended to the homebuyers is not only effective but also quick and least cumbersome,” Justice Kaul said.
