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Supreme Court Judges

Paper: General Studies 2

Topic: Structure, organization and functioning of the Executive and the Judiciary Ministries and Departments of the Government

Why in the news?

  • The Union Cabinet on Wednesday approved increasing the number of judges in the top court from the present 30 to 33, excluding the Chief Justice of India (CJI). At present, the sanctioned strength of the apex court is 30, excluding the CJI.
  • The Supreme Court (Number of Judges) Act, 1956 was last amended in 2009 to increase the judges’ strength from 25 to 30 (excluding the CJI).
  • This step is being taken in view of the increased number of pending cases in the Supreme Court which now stand at 59,311. Due to paucity of judges, the required number of constitution benches to decide important cases involving questions of law were not being formed.

How is the appointment of a Supreme Court Judge done?

  • Appointment to the Supreme Court is done through the collegium system that has been evolved by the Supreme Court through the Three Judges’ Cases.
  • According to the Supreme Court, appointment to the office of the Chief Justice of India should be of the senior-most Judge of the Supreme Court considered fit to hold the office. The Union Minister of Law, Justice and Company Affairs would, at the appropriate time, seek the recommendation of the outgoing Chief Justice of India for the appointment of the next Chief Justice of India.
  • The opinion of the Chief Justice of India for appointment of a Judge of the Supreme Court is formed in consultation with a collegium of the four senior-most puisne Judges of the Supreme Court. 
  • The recommendation of the collegium is sent to the Government of India, which is handled by the Ministry of Law and Prime Minister’s Office. After approval by the Government, the judge is appointed by the President of India by warrant under his hand and seal. If however, the office of the President rejects the recommendation, it comes back to the collegium. If the collegium decides to resend the recommendation, the President has to accept it.


Insolvency and Bankruptcy Code (Amendment) Bill, 2019

Paper: General Studies 3

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Why in the news?

  • The Parliament has passed the Insolvency and Bankruptcy (Amendment) Bill, 2019. The Bill amends the Insolvency and Bankruptcy Code, 2016.  
  • Insolvency is a situation where individuals or companies are unable to repay their outstanding debt. 

What is the Insolvency and Bankruptcy Code?

  • The Code provides a time-bound process for resolving insolvency in companies and among individuals.  
  • Under the Code, a financial creditor may file an application before the National Company Law Tribunal (NCLT) for initiating the insolvency resolution process. The NCLT must find the existence of default within 14 days.  Thereafter, a Committee of Creditors (CoC) consisting of financial creditors will be constituted for taking decisions regarding insolvency resolution. The CoC may either decide to restructure the debtor’s debt by preparing a resolution plan or liquidate the debtor’s assets.
  • The CoC will appoint a resolution professional who will present a resolution plan to the CoC. The CoC must approve a resolution plan, and the resolution process must be completed within 180 days.  This may be extended by a period of up to 90 days if the extension is approved by NCLT.   
  • If the resolution plan is rejected by the CoC, the debtor will go into liquidation. The Code provides an order of priority for the distribution of assets in case of liquidation of the debtor.  This order places financial creditors ahead of operational creditors (e.g., suppliers). In a 2018 Amendment, home-buyers who paid advances to a developer were to be considered as financial creditors.  They would be represented by an insolvency professional appointed by NCLT.   

What are the major amendments introduced in the code?

  • The Bill addresses three issues. First, it strengthens provisions related to time-limits.  Second, it specifies the minimum payouts to operational creditors in any resolution plan. Third, it specifies the manner in which the representative of a group of financial creditors (such as home-buyers) should vote.  
  • Resolution plan: The Code provides that the resolution plan must ensure that the operational creditors receive an amount which should not be lesser than the amount they would receive in case of liquidation.  The Bill amends this to provide that the amounts to be paid to the operational creditor should be the higher of: (i) amounts receivable under liquidation, and (ii) the amount receivable under a resolution plan, if such amounts were distributed under the same order of priority (as for liquidation).  For example, if the default were for Rs 1,000 crore and the resolution professional recovered Rs 800 crore, the operational creditor must at least get an amount which they would have received if Rs 800 crore have been obtained through liquidation proceeds.
  • Further, the Bill states that this provision would also apply to insolvency processes: (i) that have not been approved or rejected by the National Company Law Tribunal (NCLT), (ii) that have been appealed to the National Company Appellate Tribunal or Supreme Court, and (iii) where legal proceedings have been initiated in any court against the decision of the NCLT.
  • Initiation of resolution process: As per the Code, the NCLT must determine the existence of default within 14 days of receiving a resolution application.  Based on its finding, NCLT may accept or reject the application. The Bill states that in case the NCLT does not find the existence of default and has not passed an order within 14 days, it must record its reasons in writing. 
  • Time-limit for resolution process: The Code states that the insolvency resolution process must be completed within 180 days, extendable by a period of up to 90 days.  The Bill adds that the resolution process must be completed within 330 days. This includes time for any extension granted and the time taken in legal proceedings in relation to the process.  On the enactment of the Bill, if any case is pending for over 330 days, the Bill states it must be resolved within 90 days.
  • Representative of financial creditors: The Code specifies that, in certain cases, such as when the debt is owed to a class of creditors beyond a specified number, the financial creditors will be represented on the committee of creditors by an authorised representative.  These representatives will vote on behalf of the financial creditors as per instructions received from them. The Bill states that such representative will vote on the basis of the decision taken by a majority of the voting share of the creditors that they represent.                        

Time Release Study

Paper: General Studies 3

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Why in the news?

  • The Department of Revenue, Ministry of Finance, as part of its strategic commitment to improve global trade, is conducting India’s first national Time Release Study (TRS) between 1st – 7th August. The exercise will be institutionalized on an annual basis, during the same period every year hereafter. 
  • The exercise will be conducted at the same time across 15 ports including sea, air, land and dry ports which cumulatively account for 81% of total Bills of Entries for import and 67% of Shipping Bills for export filed within India.

What is the Time Release Study?

  • The TRS is an internationally recognized tool advocated by World Customs Organization to measure the efficiency and effectiveness of international trade flows.
  • This initiative for accountable governance, will measure rule based and procedural bottlenecks (including physical touchpoints) in the clearance of goods, from the time of arrival until the physical release of cargo. 
  • The aim is to identify and address bottlenecks in the trade flow process and take the corresponding policy and operational measures required to improve the effectiveness and efficiency of border procedures, without compromising efficient trade control. 
  • Expected beneficiaries of this initiative will be export oriented industries and MSMEs, who will enjoy greater standardization of Indian processes with comparable international standards.
  • This initiative will help India maintain the upward trajectory on Ease of Doing Business, particularly on the Trading Across Borders indicator which measures the efficiency of the cross border trade ecosystem. Last year India’s ranking on the indicator improved from 146 to 80.
  • Based on the results of the TRS, government agencies associated with cross border trade will be able to diagnose existing and potential bottlenecks which act as barriers to the free flow of trade, and take remedial actions for reducing the cargo release time. The initiative is on ground lead by the Central Board of Indirect Tax and Customs.


Management Effective Evaluation(MEE)

Paper: General Studies 3

Topic: Conservation, environmental pollution and degradation, environmental impact assessment

Why in the news?

  • A study – Management Effective Evaluation, authored by the Centre for Ecological Services Management at the Indian Institute of Forest Management, estimates the economic valuation of Bandipur and nine other tiger reserves in the country. 
  • The objective, states the report, is to enhance tiger conservation by highlighting the holistic economic benefits of protected areas.
  • Bandipur Tiger Reserve records a value ₹6,405.7 crore annually, says the report released by the National Tiger Conservation Authority. For every rupee spent on the reserve, the rate of return through various tangible and non-tangible benefits is an incredible 700%.
  • The report estimates that 3.06% of the flow benefits are accrued at the local level, while 16.01% are at the national level. The park also contributes nearly 1,121 billion litres of water to the Cauvery worth ₹2,067 crore per year; while the forests prevent soil loss and nutrient loss that would have cost ₹82.59 crore to rectify.
  • TIger reserves in Karnataka have an overall rating of 80.47%.


Prelims Specific

  • A joint venture company namely Khanij Bidesh India Ltd. (KABIL) is to be set up with the participation of three Central Public Sector Enterprises namely, National Aluminium Company Ltd.(NALCO), Hindustan Copper Ltd.(HCL) and Mineral Exploration Company Ltd. (MECL). The objective of constituting KABIL is to ensure a consistent supply of critical and strategic minerals to Indian domestic market. While KABIL would ensure mineral security of the Nation, it would also help in realizing the overall objective of import substitution.