Aadhaar & PAN data of workmen in multiple cos under insolvency

Aadhaar & PAN data of workmen in multiple cos under insolvency

Subject : National Organisations

Context : Officials aware of developments admitted to the “mistake”, which happened as the Insolvency and Bankruptcy Board of India (IBBI) was working on a portal to host details of claims by all creditors against corporates undergoing a corporate insolvency resolution process (CIRP), to improve transparency in the bankruptcy process.

Concept :

• Government agencies have previously issued public warnings against revealing details of Aadhaar or PAN publicly as such information could be used for identity theft.

CIRP

• Corporate Insolvency Resolution Process (CIRP) is a recovery mechanism for creditors. If a corporate becomes insolvent, a financial creditor, an operational creditor, or the corporate itself may initiate CIRP.
• Financial Creditor could be any person to whom a business debt is owed or a person to whom such amount is legally assigned or transmitted. For example: Banks or other financial institutions
• Operational Creditor could be any person to whom an operational debt is owed and includes any person to whom such amount has been legally assigned or transferred for goods or services done by them. For example: vendors and suppliers, employees, government etc.
• The Insolvency and Bankruptcy Code, 2016 provides a provision for an application for insolvency or bankruptcy of start-ups, individuals, partnership firms, limited liability partnership, and companies.
• The Code has provided a slab of default amount in each category however the final amount is to be notified by the Government as the trigger point to initiate the proceeding while keeping in view the fluctuation of the economy.
• It is important to understand that the said amount is not the minimum or maximum fixed amount of debt default but it is a ‘range’.
• CIRP is initiated after making an application. CIRP is the process through which it is determined whether the person who has defaulted is capable of repayment or not. If a person is not capable of repaying the debt the company is restructured or liquidated.