Current Affair – May 22, 2021

Personal guarantors liable for corporate debt: Supreme Court

∙ The Supreme Court upheld a government move to allow lenders to initiate insolvency proceedings  against personal guarantors, who are usually promoters of big business houses, along with the  stressed corporate entities for whom they gave guarantee.

About the government notification 

∙ A November 15, 2019, government notification allowed creditors, usually financial institutions and  banks, to move against personal guarantors under the Indian Bankruptcy and Insolvency Code (IBC). ∙ The November 15, 2019, notification was challenged before several High Courts initially. The  Supreme Court had transferred the petitions from the High Courts to it self on a request from the  government. 

∙ The notification has now been held to be “legal and valid”. ∙ The adjudicating authority for personal guarantors will be the NCLT if a parallel resolution process  is pending in respect of a corporate debtor for whom the guarantee is given.

How did the court reach the conclusion?

∙ Court said there was an “intrinsic connection” between personal guarantors and their corporate  debtor. This “intimate” connection made the government recognise personal guarantors as a  “separate species” under the IBC. 

∙ It was again this intimacy that made the government decide that corporate debtors and their personal  guarantors should be dealt with by a common forum — National Company Law Tribunal (NCLT) — through the same adjudicatory process. 

∙ It observed how the November 2019 notification had not strayed from the original intent of the IBC.  In fact, Section 60(2) of the Code had required the bankruptcy proceedings of corporate  debtors and their personal guarantors to be held before a common fo rum — the NCLT. 

Source: The Hindu

INS Rajput

Destroyer INS Rajput was decommissioned on May 21 at Naval Dockyard, Visakhapatnam. 

∙ The ship was decommissioned in a solemn and low-key event due to the ongoing COVID pandemic when the national flag, Naval ensign, and the decommissioning pennant were lowered at sunset time. 

∙ It was built by the erstwhile USSR. It served Indian Navy for 41 years. 

∙ It has taken part in several important operations including Operation Aman off Sri Lanka to assist  the Indian Peace Keeping Force (IPKF). 

Source: The Hindu 

Record rainfall in Delhi

∙ A rare event, the convergence of a cyclone and a Western Disturbance caused record-breaking heavy  rainfall in Delhi. The India Meteorological Department (IMD) recorded 119.3mm of rain in the  capital on Wednesday, which is the highest-ever 24-hour mark for the month of May. 

It happened when Cyclone Tauktae, one of the strongest cyclones to have been recorded in the  Arabian Sea, weakened and its remnants moved in the north-northeast direction from the  Gujarat coast towards Delhi. ∙ At the same time, a Western Disturbance, which is a weather pattern associated with non monsoon showers, was moving towards Delhi from the Western Himalayan Region. ∙ The convergence of these two phenomena caused widespread rain in the capital.

What makes this particular event unusual? 

∙ The fact that it happened in May, which is generally a dry month and has not recorded more than  27mm of rain in total since at least 2011 except in 2014 when it touched 100.2mm. ∙ The average amount of rainfall expected in May in the capital is 31.5mm ∙ It is also rare for a cyclone to make its impact felt in Delhi, and more so at the same time when  a Western Disturbance is active.

Source: The Hindu

The Legislative Council of States

∙ Trinamool Congress government in West Bengal approved the setting up of a Legislative Council in  the state. West Bengal’s Legislative Council was abolished 50 years ago by a coalition government  of Left parties. 

Currently, six states — Bihar, Uttar Pradesh, Maharashtra, Andhra Pradesh, Telangana and  Karnataka — have a Legislative Council. The setting up of a second chamber is not exclusively in the hands of the state government. The  central government also has to pilot a Bill in Parliament. 

How councils came to be?

∙ Legislatures with two Houses (bicameral) have a long history in India. The Montagu-Chelmsford  reforms led to the formation of the Council of State at the national level in 1919. 

Government of India Act of 1935 set up bicameral legislatures in Indian provinces. It was  under this law that a Legislative Council first started functioning in Bengal in 1937. 

∙ During the framing of the Constitution, there was disagreement in the Constituent Assembly on  having a second chamber in states. The arguments in support of Rajya Sabha — that a second  chamber acts as a check on hasty legislation and brings diverse voices into legislatures — did not  cut ice with many Constituent Assembly members when it came to the states. 

∙ Prof K T Shah said a second chamber in states “involve considerable outlay from the public  exchequer on account of the salaries and allowances of Members and incidental charges. They  only aid party bosses to distribute more patronage, and only help in obstructing or delaying the  necessary legislation which the people have given their votes for”. 

∙ The framers of the Constitution provided that in the beginning, the states of Bihar, Bombay, Madras,  Punjab, the United Provinces and West Bengal would have a Legislative Council. Then they gave  states the option of abolishing an existing second chamber or setting up a new one by passing a  resolution in their Legislative Assembly. The Constitution also gave the Legislative Assembly the  power to overrule the Council if there was a disagreement between them on a law.  ∙ The Constitution also capped the membership of the council to one-third of the popularly elected  Legislative Assembly.

West Bengal’s Council 

∙ The West Bengal Legislative Council remained in existence till 1969. But events in the second  chamber two years prior that led to its abolition.  

Article 169 of the Constitution empowers the Legislative Assembly to create or abolish a  Legislative Council by passing a resolution. The resolution has to be passed by two-thirds of  the Assembly members. Then a Bill to this effect has to be passed by Parliament. The West  Bengal Assembly passed this resolution in March 1969, and four months later, both Houses of  Parliament approved a law to this effect. Punjab followed suit, abolishing its Legislative Council  later that year. ∙ However, passing a resolution in the Legislative Assembly is not enough to abolish or establish  a Legislative Council. A Bill for such creation or dissolution has to be passed by Parliament.  The Assam Assembly in 2010 and the Rajasthan Assembly in 2012 passed resolutions for setting up  a Legislative Council in their respective states. Both Bills are pending in Rajya Sabha. And the Bill  for abolishing the Andhra Pradesh Legislative Council has not yet been introduced in Parliament.

Source: Indian Express

CSR initiative of NTPC – Mouda water rejuvenation 

NTPC, Central Public Sector Undertaking under Ministry of Power in Mouda, Maharashtra  has helped over 150 villages in and around its operational area to overcome water crisis  through ground water rejuvenation project.  

∙ As part of its CSR initiative, NTPC Mouda is supporting the JalyuktaShivar Yojana project which  has successfully managed to turn Mouda into a water-surplus tehsil. This project was carried out by  the Maharashtra wing of Art of Living along with aid from few other organizations and the State  government. 

∙ Earlier Mouda, was one of the most water-deficient tehsils in Nagpur. The project which started in  2017 has covered more than 200 km in Mouda, Hingna and Kamptee tehsils. In the last four years,  over 150 villages have benefited from it.  

∙ NTPC Mouda had contributed 78 lakhs for the fuel charges of machinery and equipment involved.

Trap the rain where it fall’ technique  

The ‘Trap the rain where it falls’ technique involves the creation of ponds and nullahs  throughout the stretch of the river so that rainwater can be held for a long period.  ∙ Earlier, the rainwater would run off the ground, but now the water gets sufficient time to percolate  deep into the ground.  ∙ This has led to a massive increase in groundwater levels.


∙ Until a couple of years ago, the farmers in this area were struggling to get water for crops such as  paddy, wheat and chilly during the pre-harvesting seasons. Now, the stored rainwater has provided a  new lease of life to their crops and income levels.

Source: PIB

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