IBC committee has given good suggestion on homebuyers, says PP Chaudhary

He said the panel has given a good suggestion about treating home buyers as financial creditors

Union Minister of state for corporate affairs P P Chaudhary tells Veena Mani and Indivjal Dhasmana that the government has not yet taken a call on an official panel’s recommendation for not extending a moratorium period beyond 270 days for resolution of insolvent companies, once a case is admitted by the National Company Law Tribunal. Edited excerpts:

A panel on reviewing the Insolvency and Bankruptcy Code (IBC) has recommended home buyers to be considered as financial creditors. What is the government’s take on it?

The panel has given a good suggestion about treating home buyers as financial creditors, given the specific nature of financing of real estate projects.

Section 29 A of the code bars any kind of defaulter from bidding for companies. The insolvency panel says there should be a list of offences. Do you think that is diluting the Section? 

No, I don’t think that the recommendation of the panel would dilute the intention of the Section. The idea is to address the problem of unintended exclusions under Section 29 A. I feel it has been recommended to streamline the process so that only those who contributed to the defaults of the company or otherwise undesirable are rendered ineligible.

The panel suggests that the moratorium period should not be extended for IBC cases as it would be against the spirit of the code. If that does not happen, many companies will get into liquidation. Can the government afford that to happen? 

This is a critical matter. The government is examining the proposal and will take a call soon.

The panel says the fast-track insolvency provisions are not effective. What is the government’s thought? 

The fact is that fast track provisions have not been utilised by many corporate debtors. However, this does not mean that these provisions are not effective. The government will consider recommendations of the law committee and take a decision.

IBC panel’s recommendations, if implemented, will come with prospective effect. What is the position on re-bids? 

The IBC amendment, if passed, will come into effect from the date mentioned.

Serious Fraud Investigation Office (SIFO) is probing ICICI-Videocon case. What is the progress on that front?

No comment please.

What led to the restructuring of the Competition Commission of India (CCI)? Will reduction in size not lead to curbing of dissent?

The commission has been functioning as a collegium since its inception. It has, however, been seen that in 80 per cent cases, the commission has arrived at a consensus and there was no disagreement among its members. In several major jurisdictions such as Japan, USA and UK, competition authorities are of a similar size as the right-sized commission.

In case of a tie, will CCI chairperson again vote, this time as a casting vote?

As per the Competition Act, all questions that come up before any meeting of the commission shall be decided by a majority of the members present and voting and in the case of equal voting, the chairperson or the member presiding the session will have a second and casting vote.