KCCI President M. Ganesh Kamath wrote a letter to Union Finance Minister Nirmala Sitharaman demanding amendment
KCCI President M. Ganesh Kamath wrote a letter to Union Finance Minister Nirmala Sitharaman demanding amendment
Canara Chamber of Commerce and Industry (KCCI), Mangaluru has urged the Central Government to amend the Insolvency and Bankruptcy Code, 2016 and incorporate Micro, Small and Medium Enterprises (MSMEs) under clause (b) of sub-section 1 of section 53. urged to do. equal to the arrears of workers. The Chamber said that it is in the interest of survival of MSMEs.
KCCI President M. Ganesh Kamath, in a letter to Union Finance and Corporate Affairs Minister Nirmala Sitharaman in September, said that MSMEs are the backbone of the Indian economy, and the special schemes launched by the government have been highly appreciated because they have Has provided timely finance and assistance to MSMEs.
“When MSMEs do business with some limited liability companies which are then referred to the National Company Law Tribunal (NCLT), they have no chance of recovering their dues. This is because MSMEs do not have the resources or expertise to analyze the creditworthiness of their customers. Consequently, MSMEs believe that such entities will honor their commitment and have the capacity to meet their financial obligations. As such, MSMEs have little bargaining power in dealing with corporate clients.
In the interest of MSMEs, there is an imperative need to amend the Insolvency and Bankruptcy Code, 2016 by giving priority to MSMEs in the waterfall mechanism of distribution of assets. It is generally felt that MSMEs should be included in clause (b) of sub-section 1 of section 53 and brought at par with the arrears of workers. These benefits should be available for all pending cases before the NCLT and the National Company Law Appellate Tribunal (NCLAT), the letter said.
“Unless this is done, survival of MSMEs caught in the trap of companies that have gone to NCLT is challenging. We, as a Chamber, have a direct experience of the stress of MSMEs as we deal with many cases coming for arbitration at our Arbitration Center which are referred for arbitration or settlement under the MSMED Act, 2006. Told.