Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018

Jul 25, 2018 | by Avantis RegTech Legal Research Team

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A Parliament has passed a bill further to amend the Insolvency and Bankruptcy Code, 2016. The Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018 aims to amend a few sections of the Insolvency and Bankruptcy Code, 2016. It shall be deemed to have come into force on June 06, 2018.

 

The Insolvency and Bankruptcy Code, 2016 was passed to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India.

 

Some of the amendments are as follows:

 

·         Inserting the definition of "corporate guarantor” and "related party" in Section 5.

 

·         Substituting Section 10(3) for giving the list of documents that a corporate applicant shall, along with the application, furnish for initiating corporate insolvency resolution process.

 

·         Minimum votes required to be passed at a meeting of the committee of creditors for extending the period of the corporate insolvency resolution process beyond one hundred and eighty days, has reduced been from 75% to 66% of the voting shares under Section 12(2).

 

·         Substituting the word "repayment" with "payment" to have a wider and more relevant meaning.

 

·         Withdrawal of application admitted under sections 7, 9 or 10 has been added as new Section 12A.

 

·         Amending Section 22 to provide for reduced voting threshold of 66% in place of 75% for obtaining the approval of the committee of creditors for appointment of resolution professional; and further seeks to amend sub-section (3) so as to require a written consent from the interim resolution professional in specified form before his appointment.

 

·         Inserting as Section 25A the rights and duties of authorised representative of financial creditors.

 

·         Substituting Section 27(2) as follows:

 

“(2) The committee of creditors may, at a meeting, by a vote of sixty-six per cent. of voting shares, resolve to replace the resolution professional appointed under section 22 with another resolution professional, subject to a written consent from the proposed resolution professional in the specified form.”

 

·         Amending Section 45 and Section 69 to omit certain words to bring clarity.

 

·         Modifying Section 196 so as to enable the IBBI to promote the development of and regulate the working and practices of certain professionals and also to levy fees for carrying out the purposes of the Code including the fee for registration and renewal of certain professionals.

 

·         After section 238, the following section shall be inserted:

 

“238A. The provisions of the Limitation Act, 1963 shall, as far as may be, apply to the proceedings or appeals before the Adjudicating Authority, the National Company Law Appellate Tribunal, the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal, as the case may be.”

 

The Bill seeks to repeal the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 and provides for savings of action under the said Ordinance.

 

[Bill No. 127 of 2018]

URL: http://ibbi.gov.in/webadmin/pdf/whatsnew/2018/Jul/127_2018_LS_Eng_2018-07-24%2013:33:19.pdf


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