|
| SECTION S - ASSESSMENT OF PROCESSES |
| In this Section we ask you to assess, by reference to various rating
scales, the speed, cost and general efficiency of some of the procedures
previously discussed in your economy. Please give briefly reasons
where any such assessment is rated at the lower or negative end of
the scale [indicated by an *] |
| S1. Is the process for taking of security over land to secure
corporate borrowing: |
| Not expensive |
|
| * Expensive |
X |
| Very expensive |
|
|
| Easy |
|
| Difficult |
X |
| * Very difficult |
|
|
|
| Very efficient |
|
| * Efficient |
X |
| Inefficient |
|
|
|
|
| S2. Is the process for taking of security over property other
than land to secure corporate borrowing: |
| Not expensive |
X |
| Expensive |
|
| * Very expensive |
|
|
| Easy |
X |
| Difficult |
|
| * Very difficult |
|
|
|
| Very efficient |
|
| * Efficient |
X |
| Inefficient |
|
|
|
|
| S3. Is the process for enforcement of security over land: |
| Not expensive |
|
| Expensive |
X |
| * Very expensive |
|
|
| Easy |
|
| Difficult |
X |
| * Very difficult |
|
|
|
| Very efficient |
|
| * Efficient |
|
| Inefficient |
X |
|
|
|
| The process is inefficient in that the time, cost of recovery over
land is not properly estimated and the final adjudication up to the
Supreme Court can take any way between 8 to 20 years. |
| S4. Is the process for enforcement of security over property
other than land: |
| Not expensive |
|
| * Expensive |
X |
| Very expensive |
|
|
| Easy |
|
| Difficult |
X |
| * Very difficult |
|
|
|
| Very efficient |
|
| * Efficient |
|
| Inefficient |
X |
|
|
|
| Even in realtion to movable properly the process on account of interference
by workers, and the reluctance of the company to handover movable
property renders the process inefficient and slow. |
| S5. Is the process for debt collection: |
| Not expensive |
X |
| Expensive |
|
| * Very expensive |
|
|
| Easy |
|
| Difficult |
X |
| * Very difficult |
|
|
|
| Very efficient |
|
| * Efficient |
X |
| Inefficient |
|
|
|
|
| S6. Is the process for winding up (liquidating) an insolvent
corporate borrower: |
| Not expensive |
X |
| Expensive |
|
| * Very expensive |
|
|
| Easy |
|
| Difficult |
X |
| * Very difficult |
|
|
|
| Very efficient |
|
| * Efficient |
|
| Inefficient |
X |
|
|
|
| S7. Is the process for the possible re-structuring of an insolvent
corporate borrower: |
| Not expensive |
|
| Expensive |
X |
| * Very expensive |
|
|
| Easy |
|
| Difficult |
X |
| * Very difficult |
|
|
|
| Very efficient |
|
| * Efficient |
X |
| Inefficient |
|
|
|
|
| S8. What is the average time period between the filing of an
application for the winding up (liquidation or bankruptcy) of an insolvent
corporate borrower and the formal pronouncement that the corporate
borrower will be liquidated: |
| 1-2 Months |
|
| 2-4 Months |
|
| 4-6 Months |
X |
| * Other |
|
*Specify time periiod and give brief reasons |
|
The notice when replied to normally result in decision for attempting
a winding up between four to six months. Only after reply is received
and a dispute of debt is determined does the court reject a winding
up petition. If the claim is admitted the matter is resolved within
four months for admission.
|
| S9. What is the average time period for the commencement of
a formal procedure for the re-organisation or re-structure (including
a composition) of an insolvent corporate borrower and the commencement
of the implementation of an agreed formal plan of re-organisation
or re-structure: |
| 2-4 Months |
|
| 4-6 Months |
|
| 8-12 Months |
X |
| * 12 - 18 months |
|
| * Other |
|
*Specify time periiod and give brief reasons |
| At least 8 to 12 months are required for consents from creditors
to a scheme of arrangement or composition being accepted and new capital
infused. If the company is very large it may result in the process
being more than 12 to 18 months. The rehabilitation measures at times
require change in management, amalgamation and other reliefs which
are time consuming. |
| S10. What is the average time period for the commencement of
an informal procedure (a "work out") for the re-organisation or re-structure
(including a composition) of an insolvent corporate borrower and the
commencement of the implementation of an agreed plan of re-organisation
or re-structure: |
| 2-4 Months |
|
| 4-6 Months |
|
| 8-12 Months |
|
| * 12-18 Months |
|
| * Other |
|
|
| *Specify time periiod and give brief reasons |
| India does not have many informal workout experiences. |
| S11. If there are relevant statistics available for the incidence
of formal insolvency procedures for insolvent corporate borrowers
do these show that the incidence for (a) liquidation/bankruptcy and
(b) re-organisation/re-structure is: |
| Very high |
|
| High |
|
| Low |
X |
| * Very low |
|
|
| Very high |
|
| High |
X |
| Low |
|
| * Very low |
|
|
|
|
| S12. What is your assessment of the predictability (positive,
certain outcome) of the following processes in your economy: |
(a) Security enforcement of land
|
| Very high |
|
| High |
|
| Medium |
X |
| Low |
|
| * Very low |
|
|
| |
(b) Security enforcement of property other than land
|
| Very high |
|
| High |
|
| Medium |
X |
| Low |
|
| * Very low |
|
|
| |
(c) Judicial handling of security enforcement
|
| Very high |
|
| High |
|
| Medium |
|
| Low |
|
| * Very low |
|
|
|
(d) Judicial handling of debt collection
|
| Very high |
|
| High |
|
| Medium |
|
| Low |
|
| * Very low |
|
|
Both the judicial handling of security enforcement as well as
the judicial handling of debt collection varies from low to medium.
This is so, because the courts in India have to contend with several
procedural delays, including specifically:
(i) technical rules of evidence followed bt the Civil Court;
(ii) provision for appeal and revision at different stages of
the suit, appeal and execution;
(iii) intentional delaying tactics adopted by borrowers taking
undue advantage of the procedures of civil courts;
(iv) banks and financial institutions have to generally wait
in the line for their turn along with other litigants on account
of backlog of different kinds of suits although their suits are
for simple money claims and could be disposed off, with the least
possible delays (this position is slightly different in some High
Courts where 'Commnercial Causes' are separately tried);
(v) several vacancies in courts are not filled up on a prompt
basis.
|
(e) Judicial handling of insolvency (liquidation) cases
|
| Very high |
|
| High |
|
| Medium |
|
| Low |
|
| * Very low |
|
|
|
(f) Judicial handling of cases of re-organisation/re-structure
|
| Very high |
|
| High |
|
| Medium |
|
| Low |
|
| * Very low |
|
|
| |
