New Delhi : The Insolvency and Bankruptcy Board of India may soon come up with a new set of rules to deal with insolvent individuals and individual guarantors of loans, Chairperson M S Sahoo said.
“Very soon we will start with guarantors to corporate debtors. Next phase will be partnerships and proprietorship firms. And next phase will be individuals,” he said. The regulations have been vetted by an advisory committee headed by Justice B N Srikrishna and provide for proceedings in the National Company Law Tribunal against guarantors of loans to defaulting companies. Once the norms for dealing with guarantors to corporate loans are notified, it will allow simultaneous proceedings against defaulting companies and individual guarantors at the company law tribunal. According to Sahoo, norms related to partnerships and proprietorship firms are going to be slightly difficult to implement as the number of cases handled by Debts Recovery Tribunals may be an issue.
On being asked by when the new rules will come into force, Sahoo said, “It is difficult to give a time actually in this kind of environment. In partnerships and proprietorship firms the issue is that they have to be handled at a Debts Recovery Tribunals. So we have to also have capacity there, number of tribunals,” he said. Currently, there are 38 Debts Recovery Tribunals and five Debts Recovery Appellate Tribunals. Sahoo said insolvency professionals have to be sensitised to deal with individuals filing for bankruptcy.
