India’s Prime Minister Narendra Modi led Union Cabinet on 11th December 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 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).
The cabinet’s statement said, the amendments aim to remove certain difficulties being faced during insolvency resolution process to realize the objects of the code and to further ease doing of business.
Amendments to the Code will help remove bottlenecks and streamline the CIRP, the statement said.
Its protection of last mile funding will boost investment in financially distressed sectors, it said.
Additional thresholds introduced for Financial creditors represented by an authorized representative due to large numbers in order to prevent frivolous triggering of Corporate Insolvency Resolution Process (CIRP).
Ensuring that the substratum of the business of 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 favour of a successful resolution applicant from criminal proceedings against offences committed by previous management/promoters, it added.
