New Delhi: In order to ensure time-bound resolution process, Parliament on Thursday passed the Insolvency and Bankruptcy Code (Amendment) Bill 2019 in which as many as eight amendments to seven sections in the IBC have now been amended.
Moving the bill for passage in the Lok Sabha, Corporate Affairs Minister Nirmala Sitharaman said, “The amendments to the law are aimed at ensuring greater timeliness for resolution process, which has to be completed in 330 days.”
“Also, the changes would also bring in more clarity on various provisions, including time-bound disposal at the application stage for resolution plan and treatment of financial creditors,” she added.
The bill, passed by the Rajya Sabha on Monday, was also passed by the Lower House on Thursday after nearly three hours of discussion on several amendments. Finally, as many as seven sections of the Code are to be amended.
Citing the proposed amendments, Sitharaman said, “Once the Corporate Insolvency Resolution Process (CIRP) begins, it has to be completed in 330 days, including litigation stages and judicial process. Among others, the approved resolution plan would be binding on central and state governments as well as various statutory authorities.”
Sitharaman also said the proposed amendments also responds to issues pertaining to financial creditors in the wake of a recent ruling with respect to financial and operational creditors. On recent Essar Steel Ltd’s case, she quoted a Supreme Court judgement to say that with implementation of the Code, there is no longer a defaulter’s paradise.
The National Company Law Appellate Tribunal (NCLAT) had ruled in the Essar Steel’s case that the Committee of Creditors (CoC) had no role in distribution of claims and brought lenders or financial creditors and vendors or operational creditors on par.
