Lok Sabha on Wednesday passed the Insolvency and Bankruptcy Code
Lok Sabha on Wednesday passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2021. The Bill was introduced on July 26, 2021 in the house and was passed without any discussion due to opposition protests.
The Bill proposes a pre-packaged insolvency resolution process for corporate debtors under MSME Development Act, 2006. It will ensure “quicker, cost-effective and value-maximizing outcomes for all the stakeholders, in a manner which is least disruptive to the continuity of their business and which preserves jobs.” says Government.
The Bill will replace the IBC Amendment Ordinance promulgated by the President on April 4, 2021. It provides for—
- specifying a minimum threshold of not more than one crore rupees for initiating pre-packaged insolvency resolution process,
- disposal of simultaneous applications or initiation of corporate insolvency resolution process and pre-packaged insolvency resolution process, pending against the same corporate debtor,
- inserting a new Chapter III-A containing sections 54A to 54P to facilitate pre-packaged insolvency resolution process for corporate persons that are MSMEs,
- penalty for fraudulent or malicious initiation of pre-packaged insolvency resolution process or with intent to defraud persons,
- penalty for fraudulent management of corporate debtor during the pre-packaged insolvency resolution process,
- Punishment for offences related to the re-packaged insolvency resolution process.
Click HERE to read Bill
