Under IBC a total of 1,194 cos have been successfully resolved and creditors have realised an amount of `3.89 lakh crore

PTI New Delhi

A Parliamentary panel on Tuesday suggested a raft of measures to improve the insolvency law framework, including putting in place an advance ruling mechanism that will provide legal clarity at the pre-admission stage and help reduce unnecessary litigations.

Besides, the committee has proposed integration of mediation as an alternative dispute resolution mechanism, as that can bring down the burden on the adjudicating authorities concerned in resolving the stressed assets under the Insolvency and Bankruptcy Code (IBC). 

In its report, the Parliamentary Standing Committee on Finance has also recommended setting up a transparent, online mechanism for issuing 'no dues' certificates and statutory clearances immediately upon completion of a resolution plan to ensure that revitalised corporate debtors truly start with a clean slate. 

Under the IBC, a total of 1,194 companies have been successfully resolved and creditors have realised an amount of Rs 3.89 lakh crore, which is over 170 per cent of the liquidation value and more than 93 per cent of the fair value of these companies, as assessed at the time of admission into the resolution process. These figures are till March 31 this year.

"The committee, therefore, recommend that the Ministry of Corporate Affairs and the IBBI should urgently explore the feasibility and applicability of introducing a suitable advance ruling mechanism within the IBC framework. This mechanism should aim to provide stakeholders with pre-admission clarity on key legal or factual issues, thereby significantly reducing unnecessary litigation and safeguarding the time-bound nature of the resolution process," the report said.