Cabinet approves Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi today approved the proposal to make amendments in the Insolvency and Bankruptcy Code, 2016 (code), through the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019. The amendments aim to remove certain difficulties being faced during the insolvency resolution process to realize the objects of the code and to further ease the doing of business.
Details of the Proposal
The Amendment Bill seeks to amend sections 5(12), 5(15), 7, 11, 14, 16(1), 21(2), 23(1), 29A, 227, 239, 240 and insert new section 32A in the Insolvency and Bankruptcy Code, 2016 (Code).
- Amendments to the Code to remove bottlenecks, streamline the CIRP and protection of last-mile funding will boost investment in financially distressed sectors.
- Additional thresholds introduced for Financial Creditors represented by an authorized representative due to large numbers in order to prevent frivolous triggering of the Corporate Insolvency Resolution Process (CIRP).
- Ensuring that the substratum of the business of the corporate debtor is not lost, and it can continue as a going concern by clarifying that the licenses, permits, concessions, clearances, etc. cannot be terminated or suspended or not renewed during the moratorium period.
- Ring-fencing corporate debtor resolved under the IBC in favor of a successful resolution applicant from criminal proceedings against offenses committed by previous management/promoters.
Source: Press Information Bureau Government of India Cabinet
In the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the principal Act), in section 4, after the proviso, the following proviso shall be inserted, namely:—
“Provided further that the Central Government may, by notification, specify such minimum amount of default of higher value, which shall not be more than one crore rupees, for matters relating to the pre-packaged insolvency resolution process of corporate debtors under Chapter III-A