New Delhi: Amid furore over Vijay Mallya loan default matter, the government on Wednesday introduced in the Lok Sabha a Bill which provides for expeditious disposal of debt recovery applications pending before tribunals.
The 'Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016' -- introduced by Finance Minister Arun Jaitley -- was immediately referred to a Parliamentary Joint Committee.
The Bill seeks to amend provisions in as many as four legislations, including the Recovery of Debts due to Banks and Financial Institutions Act, 1993.
The legislation proposes to give RBI powers to regulate asset reconstruction companies, priortise secured creditors in repayment of debts and provide stamp duty exemption on loans assigned by banks and financial institutions to asset reconstruction firms.
Around 70,000 cases are pending in Debt Recovery Tribunals and the proposed amendments are being aimed to "facilitate expeditious disposal of recovery applications", as per the Bill's Statement of Objects and Reasons.
The government has come up with this legislation at a time when there is mounting concern over loan recovery in view of the Mallya case where the loan default is to the tune of over Rs 9,400 crore.
"Presently, there are approximately 70,000 cases pending in Debts Recovery Tribunals... Cases are pending for many years due to various adjournments and prolonged hearings," according to the Bill.
Another proposal is to empower the central government to provide for uniform procedural rules for conduct of proceedings in the Debts Recovery Tribunals and Appellate Tribunals.
Both Houses adopted the motion for sending the Bill to the 30-member Joint Committee.
Those from the Lok Sabha include B Mahtab (BJD), P Venugopal (AIADMK), Kalyan Banerjee (TMC), Sushmita Dev (Cong), P P Chaudhary (BJP) and Chirag Paswan (LJP). Members from the Rajya Sabha include Bhupender Yadav (BJP), Naresh Gujral (SAD), Anand Sharma (Cong), Praful Patel (NCP), K C Tyagi (JD-U) and Shukendru Shekar Roy (TMC).
When Jaitley moved the motion in the Rajya Sabha, Congress leader Jairam Ramesh raised the objection and sought to know why the Bill is being referred to the Joint Committee bypassing the Parliamentary Standing Committee.
To this, Jaitley said, "This Bill is an offshoot of the Insolvency and Bankruptcy Code, which the Joint Committee had examined. It was appropriate that the same committee examines this Bill also."
He also said that even the CAMPA Afforestation Fund, which was examined by the Parliamentary Standing panel, was later referred to the committee.
The Bill proposes to amend provisions in Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; the Indian Stamp Act, 1899 and the Depositories Act, 1996.
"The Bill aims to improve ease of doing business and facilitate investment leading to higher economic growth and development," the government said.
With respect to the Securities and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, amendments have been proposed to suit changing credit landscape and augment ease of doing business.
These include specific timeline for taking possession of secured assets, debenture trustees as secured creditors as well as integration of "registration systems under different laws relating to property rights with the Central Registry so as to create a central database of security interest on property rights".
Further, the Bill seeks to "amend the Indian Stamp Act, 1899, so as to exempt assignment of loans in favour of asset reconstruction companies from stamp duty and the Depositories Act, 1996 for facilitating transfer of shares held in pledge or on conversion of debt into shares in favour of banks and financial institutions".