Looking at the problems faced by the home-buyers who go to different government agencies to get their flats, the Centre has passed the Insolvency and Bankruptcy Code (amendment) Bill 2019 on Thursday. While Rajya Sabha passed it earlier this week, the Lok Sabha passed it on Thursday.“The Bill strengthens the interest of home-buyers,” Union Finance Minister stated in the Parliament.
During the debate in the lower house, finance minister, Nirmala Sitharaman was also heard saying, “Business failure should not be looked down upon, should not be seen as curse.”
She also said that timely changes in the Bill were necessary due to the developments outside Parliament. The Minister claimed that IBC has been effective in the two-and -half years of its functioning and behavioral change was visible in the corporate sectors after its implementation.
What are amendments made in IBC?
According to IBC (Amendment) Bill 2019, the time period has been increased to 330 days from 270 days for insolvency resolution process, including time for any extension granted and for legal proceedings.
The amendments in the bill will remove interpretative ambiguity and making the code vibrant.
The will ensure greater clarity to mergers, re-mergers and amalgamations as a part of the resolution process.
The IBC amendment bill puts more focus on time bound disposal at the application stage itself.
The code allows National Company Law Tribunal (NCLT) to determine the existence of default within 14 days of receiving a resolution application and may accept or reject it. However, the amendments in the bill state that NCLT will be liable to give its reasons in writing if they fail to pass an order within 14 days.
The amendments in the bill also states how the representative of a group of financial creditors should vote.
As per the IBC (Amendment) Bill 2019, the resolution plan under the corporate insolvent resolution process will be binding on the Centre, state and the local authorities.