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The Insolvency and Bankruptcy Code, 2016 is listed for passage in Rajya Sabha today. Last week, Lok Sabha passed the Code with changes recommended by the Joint Parliamentary Committee that examined the Code.[1],[2] We present answers to some of the frequently asked questions in relation to the Insolvency and Bankruptcy Code, 2016. Why do we need a new law?
As of 2015, insolvency resolution in India took 4.3 years on an average. This is higher when compared to other countries such as United Kingdom (1 year) and United States of America (1.5 years). Figure 1 provides a comparison of the time to resolve insolvency for various countries. These delays are caused due to time taken to resolve cases in courts, and confusion due to a lack of clarity about the current bankruptcy framework. What does the current Code aim to do? The 2016 Code applies to companies and individuals. It provides for a time-bound process to resolve insolvency. When a default in repayment occurs, creditors gain control over debtor’s assets and must take decisions to resolve insolvency within a 180-day period. To ensure an uninterrupted resolution process, the Code also provides immunity to debtors from resolution claims of creditors during this period. The Code also consolidates provisions of the current legislative framework to form a common forum for debtors and creditors of all classes to resolve insolvency. Who facilitates the insolvency resolution under the Code? The Code creates various institutions to facilitate resolution of insolvency. These are as follows:
What is the procedure to resolve insolvency in the Code? The Code proposes the following steps to resolve insolvency:
What are some issues in the Code that require consideration?
A version of this blog appeared in the Business Standard on May 7, 2016.
The elections for the next Vice-President of India are underway today. The current Vice President Dr. Hamid Ansari will complete his second five-year term on August 10, which is in a few days. While the BJP-led NDA’s candidate is Mr. Venkaiah Naidu, Dr. Gopalkrishna Gandhi is the joint candidate fronted by 18 opposition parties led by the INC. In this post, we take a closer look at the constitutional mandate and role of the Vice-President of India and how the elections for the post will play out today.
Constitutional mandate as Vice President
The Vice-President is the second-highest constitutional office in India. He acts as the President in the absence of the incumbent President, and is the ex officio Chairman of Rajya Sabha. As an indication of his bipartisanship and apolitical character, the Vice-President does not hold membership of any political party or any other office of profit. Further, given his constitutional stature, the statements given by the Vice President assume national significance. The outgoing Vice President’s statements on issues like press freedom and welfare of minority communities led to several media debates and attracted widespread attention.
Vice-President’s role as Chairman of the Rajya Sabha
As Chairman of Rajya Sabha, the Vice President is the final authority on the interpretation of the Constitution and the Rules of Procedure for all house-related matters. His rulings constitute binding precedent. He also determines whether a Rajya Sabha member stands to be disqualified on grounds of defection. Such powers make him an important stakeholder in the functioning of our parliamentary democracy.
The Vice President is also vested with powers to improve the functioning of the Upper House. There have been several instances where the current Vice President has used his powers to address issues ranging from improving the productivity of question hour, reducing prolonged disruptions, maintaining decorum in the House, to facilitating discussion on issues of national importance.
Addressing disruptions: In March 2010, the Vice President ordered seven MPs to be evicted from the House for causing disruptions during the discussion and passage of the Women’s Reservation Bill. More recently, in December 2015, the Vice President called for an all-party meeting during the last leg of the then ongoing Winter Session to discuss the matter of continuous disruptions in the House. The remaining three days of the session after the all-party meet recorded 79% productivity, while the House had recorded overall productivity of 51% that session.
Functioning of Question Hour: In another instance, in November 2014, the Vice President issued a direction to conduct question hour from 12 noon to 1 pm instead of the originally allocated first hour of the day. This was seen as an attempt to address the issue of low productivity of question hour mostly due to disruptions at the start of the day. However, question hour productivity has not shown any significant improvement yet, with continuing disruptions.
Parliamentary Privilege: Parliamentary privilege refers to rights and immunity enjoyed by Parliament and MPs, which may be necessary to effectively discharge their constitutional functions. When disregarded, the offence is called a breach of privilege and is punishable under law. The Chairman is the guardian of these privileges and can also issue warrants to execute the orders of the House, where necessary. In 1967, one person was held to be in contempt of Rajya Sabha for throwing leaflets from the visitors’ gallery of the House. The then Vice President, in accordance with the resolution of the House, had sentenced the person to simple imprisonment, till the conclusion of that session.
The Chairman’s consent is required to raise a question of breach of privilege. He also has the discretion whether to refer it to the Privileges Committee, and whether to accept the committee’s recommendations. In October 2015, the current Vice President had referred the matter of a member’s controversial “terrorists in Parliament” remark to the Privileges Committee upon receiving complaints from several opposition MPs.
Role in Parliamentary Committees and other institutions
Parliamentary committees review proposed laws, oversee activities of the executive, and scrutinise government’s expenditure. The Vice President nominates members to various Parliamentary Committees, appoints their Chairmen and issues directions to them. The Vice President also nominates members of the Rajya Sabha on various bodies such as the Haj Committee, the Institute of Constitutional and Parliamentary Studies, Courts of several universities such as JNU, etc. He is also on the three-member Committee which nominates the Chairman of the Press Council of India.
So, how is the Vice President elected?
Unlike Presidential elections, MLAs do not have a vote in these elections. Dr. B R Ambedkar had explained why during the constituent assembly debates: “The President is the Head of the State and his powers extend both to the administration by the centre as well as of the states… But when we come to the Vice-President, his normal functions are merely to preside over the Council of States. It is only on a rare occasion, and that too for a temporary period, that he may be called upon to assume the duties of a President”.
Therefore, the Electoral College for the Vice- Presidential elections consists of all 790 MPs. The elections are conducted using the system of single transferable voting that results in (approximately) proportional representation. The voting is done through secret ballot implying that parties cannot issue whips to their MPs and anti-defection laws do not apply.
Each voter has one vote with the same value of 1. Every voter can mark as many preferences, as there are candidates contesting the election. It is necessary for at least the first preference to be marked. A candidate needs to win a required number of votes (or the quota) to be elected. If no one achieves the required quota after the first round of counting the first preference votes, the candidate with the lowest votes is eliminated. His votes are then transferred to the second preference mentioned (if any) on the votes he received. If no one achieves the required quota again, the process is repeated till either:
The upcoming Vice Presidential elections
Let us now determine the quota required for victory in today’s election. The total value of votes of the electoral college is divided by two, and one is added (to ensure a majority) to the quotient to determine the quota. Hence, the quota is calculated as:
Quota = 790/2 + 1 = 395 + 1= 396
The candidate who gets 396 votes will win the election. If no candidate gets to this mark, the second and further preferences may be counted until the mark is reached or all candidates, but one, are eliminated.
We know the number of seats held by each party in Parliament. Let us assume that all MPs vote along their party line. The position of the NDA and UPA is depicted in the figure below at the two ends of the chart. All other major parties and independents are marked in the middle.
We observe that, while the BJP falls short of the quota by 58 votes, the shortfall can be overcome if NDA allies TDP, Shiv Sena, Shiromani Akali Dal, LJP and PDP support its candidate.
With the voting taking place this morning, the outcome and results will become clear by later today. It is hoped that the new Vice President will uphold the twin constitutional mandates as the second highest constitutional functionary and the Chairman of Rajya Sabha, just as his distinguished predecessors have done.
