The Lok Sabha on Thursday took up for discussion a Bill that seeks to provide a 330-day timeline for insolvency resolution process and specifies minimum payouts to operational creditors in any resolution plan.
Moving the Insolvency and Bankruptcy Code (Amendment) Bill, 2019 for passage in the House, Finance Minister Nirmala Sitharaman said the amendments were aimed at removing interpretative ambiguity and making the code vibrant.
The Bill seeks to amend the Insolvency and Bankruptcy Code, 2016.
Sitharaman said the amendments will bring greater clarity to mergers, demergers and amalgamations as part of the resolution process.
She said it lays greater emphasis on time-bound disposal at the application stage itself.
While the code says that National Company Law Tribunal (NCLT) must determine the existence of default within 14 days of receiving a resolution application and may accept or reject it, the Bill states that the NCLT must record its reasons in writing if it has not passed an order within 14 days.
The Bill provides that the resolution process must be completed within 330 days including time for any extension granted and for legal proceedings.
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