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India intends to sign pacts to seize wilful defaulters’ assets

Amid concerns expressed by members over rising instances of wilful defaults as highlighted in case of liquor baron Vijay Mallya, MoS for Finance Jayant Sinha said bankruptcy framework and the normal procedure against them would continue in a parallel manner.

He was replying to a debate on the Insolvency and Bankruptcy Code Bill that seeks to update and consolidate existing laws, which was approved by the House later.

The legislation is a “transformational building block” for the economy and there would be one law dealing with bankruptcy while doing away with at least 12 different legislations, some of which are centuries old. This will also make the whole process more “transparent”, Sinha said.

The new framework would help in improving India’s position in the World Bank’s ease of doing business ranking, he said. To a query if the new legislation would help take the overseas assets of wilful defaulters, Sinha said first cross-border treaties need to be put in place.

“We have to make cross-border treaties. We have to have an understanding with other nations that we are taking action on this defaulter. When we have a good law like this in which the other nations will be clear that by due process of law we are taking action, then they will also believe us and they will cooperate with us in attaching the assets and properties in their countries,” he said.
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