Insolvency net widens

The high court on Tuesday widened the scope of the probe into insolvency declarations, bringing cases before April 1, 2008, within its ambit. Justice Sanjib Banerjee implicated a former registrar of insolvency and a former official assignee in the case and directed the duo to file affidavits by 23 March.

The court had earlier implicated the present registrar of insolvency, the official assignee and some touts and lawyers following petitions by several private banks alleging irregularities in insolvency declarations. The 1,400-odd insolvency applications filed between 1 April, 2008 and February 2010 were granted.

According to the banks, some officials in the registrar’s office, touts and lawyers were helping people declare themselves insolvent to evade repayment of bank loans and credit card dues.

Justice Banerjee had earlier stayed over 1,400 cases of insolvency declarations besides restraining fresh applications. He had directed the present registrar of insolvency and official assignee to submit affidavits and also asked state advocate-general Balai Ray to inform the court about the legal provisions to prosecute these government officials.

On Tuesday, Ray requested for “some more time” to inform the court about the legal provisions. His plea was granted by the judge.

Before the hearing, Justice Banerjee visited the original side record room of Calcutta High Court, where all documents related to insolvency cases are kept under the jurisdiction of a court-appointed special officer. The judge wondered why not a single insolvency application had been turned down in the past three years.

The Telegraph