Current Affairs 20 March 2019 Digest 1: Pinaki Chandra Ghose appointed as India's first Lokpal; IBBI, SEBI sign MoU for better implementation of IBC

Story 1: Pinaki Chandra Ghose appointed as India's first Lokpal

India gets its first Lokpal six years after the passage of Act, former Supreme Court judge, Pinaki Chandra Ghose was on March 19, 2019 appointed as India’s first Lokpal also known as the anti-corruption ombudsman.

Ghose appointment was approved by the President Ram Nath Kovind. Besides this, the President also appointed four judicial and four non-judicial members of the Lokpal.

Judicial Members

Non-Judicial Members

Dilip B. Bhosale (Former Chief Justice)

Archana Ramasundaram (First woman Chief of Sashastra Seema Bal)

Pradip Kumar Mohanty (Former Chief Justice)

Dinesh Kumar Jain ( Former Maharashtra Chief Secretary)

Abhilasha Kumari (Former Chief Justice)

Mahender Singh (Former IRS officer)

Ajay Kumar Tripathi (sitting Chief Justice of Chhattisgarh)

Indrajeet Prasad Gautam ( Former IAS officer)

Pinaki Chandra Ghose

Currently, Ghose is serving as a Member of the National Human Rights Commission (NHRC). He was appointed as a Judge of the Calcutta High Court in 1997. He served as the Chief Justice of Andhra Pradesh High Court before his elevation to the Supreme Court in 2013.

While serving as the Chief Justice of the Andhra Pradesh, he convicted Sasikala Natarajan in a corruption case. Sasikala used to be a close adviser of former Tamil Nadu Chief Minister J Jayalalithaa.

Ghose retired from the Supreme Court in May 2017.

Lokpal Selection Panel

Ghose’s name was recommended by the Lokpal selection panel chaired by Prime Minister Narendra Modi.

The other members of the selection panel included the Chief Justice of India Ranjan Gogoi, Lok Sabha Speaker Sumitra Mahajan, eminent jurist Mukul Rohatgi and Leader of the Opposition in the Lok Sabha, Mallikarjun Kharge.

However, Kharge did not attend the meeting as a protest against being invited as a “special invitee” to the committee meetings.

Lokpal and Lokayuktas Act, 2013

The Lokpal and Lokayuktas Act, 2013 provides for setting up of Lokpal at the centre and Lokayuktas in the States to probe corruption complaints against top functionaries and public servants, including the Prime Minister and the Chief Ministers.

Under the Act, the appointment to Lokpal is made by a high-level selection committee headed by Prime Minister, and is constituted of Lok Sabha Speaker, Leader of Opposition Party (LoP), Chief Justice of India and an eminent jurist.

The sub-section (2) of Section 4 of the 2013 Lokpal Act makes it clear that an appointment of the chairperson or members of Lokpal will not be invalidated merely because one of the members of the selection committee, the LoP, is missing.

Who is a Lokpal?

The Lokpal is a multimember body with a Chairperson (who is or has been a Chief Justice or Judge of the Supreme Court) and Members (who are or have been Judges or Chief Justices of High Courts).

Story 2: IBBI, SEBI sign MoU for better implementation of Insolvency and Bankruptcy Code

The Insolvency and Bankruptcy Board of India (IBBI) on March 19, 2019 signed a Memorandum of Understanding (MoU) with the Securities and Exchange Board of India (SEBI) for better implementation of Insolvency and Bankruptcy Code, 2016.

The IBBI and the SEBI together seek effective implementation of the Insolvency and Bankruptcy Code and its rules and regulations which aim to promote entrepreneurship and debt market.

The MoU was signed by Anand Baiwar, Executive Director of the SEBI and Ritesh Kavdia, Executive Director of IBBI.

Under the MoU, both the sides agreed to:

Assist and co-operate with each other for the effective implementation of the Code, subject to limitations imposed by the applicable laws

Share the information, subject to the limitations imposed by the applicable laws

Share the resources available with each other which are feasible and legally permissible

Hold cyclic meetings to discuss matters of mutual interest, including regulatory requirements, enforcement cases, research and data analysis, information technology and data sharing

Undertake cross-training of staff in order to enhance understanding of the each other’s missions for effective utilisation of combined resources

Capacity building of insolvency professionals and financial creditors

Carry out joint efforts to enhance the level of awareness among financial creditors about the importance and necessity of swift insolvency resolution process of borrowers in distress

Insolvency and Bankruptcy

Insolvency is a situation where an individual or company is unable to repay their outstanding debt to creditors.  A bankrupt entity is a debtor who has been declared as bankrupt by an adjudicating authority.

As per the law, the National Company Law Tribunal (NCLT) is the adjudicating authority for companies and limited liability partnerships. The Debt Recovery Tribunal (DRT) is the adjudicating authority for individuals and partnership firms.

In India, the insolvent or bankrupt entities are dealt on the basis of bankruptcy laws. Currently, Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018 is pending for its passage in the parliament. The Bill seeks to replace the Insolvency and Bankruptcy Code (Amendment) Ordinance 2018.

Prior to this legislation, Insolvency and Bankruptcy Code, 2016 was applicable for resolution of bankrupt companies and individuals.

Major Highlights of Insolvency and Bankruptcy Code, 2016

• Insolvency resolution: The Code creates time-bound processes for insolvency resolution of companies and individuals.  These processes are completed within 180 days. If insolvency cannot be resolved, the assets of the borrowers are sold to repay creditors.

• Insolvency Professionals: The resolution processes are conducted by licensed Insolvency Professionals (IPs).  This IPs are the members of Insolvency Professional Agencies (IPAs). The IPAs furnish performance bonds equal to the assets of a company under insolvency resolution.

• Information Utilities:
Information utilities (IUs) are established to collect, collate and disseminate financial information to facilitate insolvency resolution.

• NCLT: The National Company Law Tribunal (NCLT) adjudicates insolvency resolution for companies.

• DRT:
The Debt Recovery Tribunal (DRT) adjudicates insolvency resolution for individuals.

• Insolvency and Bankruptcy Board: The Insolvency and Bankruptcy Board of India regulates functioning of IPs, IPAs and IUs.

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