(Reporting by Prakash Priyadarshi, contribution by Jitesh Kumar Jha)
NEW DELHI: The Centre has started studying the legal systems used by many countries in its bid to overhaul India's individual insolvency framework, sources have told Zee Business. The government is also looking to adopt an online settlement process instead of setting requirements for personal presence.
The government is also looking to supplement the overhaul of the insolvency framework by expanding the network of Debt Recovery Law Tribunals (DRLTs), the sources said.
The Centre is studying the various systems in use across the world as a reference point to which system could work best in the Indian context. Sources said one of the systems that appeals to the Indian context is the insolvency system used by the United Kingdom. However, even the UK system would have to undergo some modifications to make it more suited for Indian conditions.
Another major thrust area for the overhaul is to take the entire process online. The government is learnt to be disinclined to adopting a system that would require the applicants of insolvency proceedings to turn up in person to complete the process.
The Corporate Affairs Ministry is also learnt to have asked for the strengthening of the DRLT system for individual insolvency claims. Part of this process would include an increase in the number of DRLTs. There are presently 33 DRLTs across the country, and all of them are overburdened and suffer from long pendency of cases.