The Rajya Sabha on 11 May 2016 passed the Insolvency and Bankruptcy Code 2016, a law to amend and consolidate the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner. The Code is a vital reform that will make it much easier to do business in India. [Earlier the Lok Sabha had passed the Bill on 05 May 2016]
- Setting up of the Insolvency and Bankruptcy Board of India, which will be the regulator under the code
- Regulation of Insolvency Professionals and Insolvency Professional Agencies, who will conduct the insolvency resolution process in the manner prescribed under the code
- Application for corporate Insolvency resolution could be initiated by Corporate Debtor, Financial Creditor or Operational Creditor
- Insolvency resolution process to be completed in a time bound manner i.e. 180 days from the date of its commencement
- Fast track insolvency resolution process shall be completed within a period of 90 days from its commencement
- The National Company Law Tribunal (NCLT) will adjudicate insolvency resolution for companies and the Debt Recovery Tribunal (DRT) will adjudicate insolvency resolution for individuals
- The code proposes to protect the workmen in case of corporate insolvency i.e. their dues for up to 24 months will get first priority during the liquidation of assets
- The Code has prescribed the amendments to be brought in around 11 other legislations including Companies Act, 2013, Income Tax Act, 1961 and Sick Industrial Companies (Special Provisions) Repeal Act, 2003
- Provisions to tackle issues of cross-border insolvency
To read the Insolvency and Bankruptcy Code 2016 as passed by the Lok Sabha, please visit the below link:
http://164.100.47.4/BillsTexts/LSBillTexts/PassedLoksabha/349_2015_LS_Eng.pdf