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Monetary Management and Financial Intermediation 155

December 31, 2020, 181 CDs have been completely liquidated which had outstanding claims
of ` 26,251 crores, but the assets valued at `598 crores. ` 607 crores were realised through the
liquidation of these companies.

4.62 Time – The 308 CIRPs, which have yielded resolution plans by the end of December
2020, took on average 441 days for the conclusion of the process. Similarly, the 1112 CIRPs,
which ended up in orders for liquidation, took on average 328 days for the conclusion. Further,
181 liquidation processes, which have closed by submission of final reports till December 31,
2020, took on average 380 days for closure. Similarly, 352 voluntary liquidation processes,
which have closed by submission of final reports, took on average 370 days for closure.

4.63 Cost – Out of the total 308 CIRPs have yielded resolution plans until December 2020, the
cost details are available in respect of 260 CIRPs. The cost works out on average 0.79 per cent
of liquidation value and 0.42 per cent of resolution value.

Behavioural Change
4.64 The Code has brought about significant behavioural changes among the creditors and
debtors thereby redefining debtor-creditor relationship. The inevitable consequence of a
resolution process (the control and management of the firm move away from existing promoters
and managers, most probably, forever) deters the management and promoter of the firm from
operating below the optimum level of efficiency. Further, it encourages the debtors to settle
default expeditiously with the creditor at the earliest, preferably outside the Code. There have
been many instances where debtors have been settling their debts on their own or settling
immediately on the filing of an application with the National Company Law Tribunal (NCLT)
before it is admitted. It is pertinent to note that since the enactment of the Code in 2016, of the
18,892 applications that were dealt with, as many as 14,884 cases involving defaults of ` 5.15
lakh crore were withdrawn by September, 2020 from various benches of the NCLT, before
these applications were admitted by the Adjudicating Authority and 897 processes were closed
mid-way by December, 2020. These figures indicate that almost 83 per cent of the CDs are
getting resolved on the way, before the official commencement of CIRP under the Code on
account of behavioural change among the defaulting debtors. Only 7 per cent of the CDs have
undergone the entire process yielding either resolution or liquidation. Remaining 10 per cent
of CDs are still undergoing the process (Table 15 and 16).

Table 16: Outcomes under the Code: Status of applications filed (as of December 2020)

Particulars No. of Corporates Amount (` Crore)
Applications filed 28,441 NA

Applications Pending for 9,549 NA
consideration

Application Dealt 18,892 Liquidation Value Realisation Value

Applications withdrawn 14,884* NA* 5,15,170*
before admission*

Process commenced 4,117 NA NA