Union Finance and Corporate Affairs Minister NirmalaSitharaman on Thursday said that the amendments to insolvency law will ensure greater timeliness for the resolution process, which has to be completed in 330 days.
Moving the Insolvency and Bankruptcy Code (Amendment) Bill,2019 for passage in the LokSabha, she said the changes would also bring in moreclarity on various provisions, including time-bound disposal at the applicationstage for resolution plan and treatment of financial creditors. The governmenthas made changes in seven sections of the law, she added.
Once the Corporate Insolvency Resolution Process (CIRP)begins, it has to be completed in 330 days, including litigation stages andjudicial process, the minister said, about the proposed amendments.
Among other changes, the approved resolution plan would bebinding on Central and state governments as well as various statutoryauthorities.
Sitharaman said the proposed amendments also responds toissues on financial creditors in the wake of a recent ruling with respect tofinancial and operational creditors.
Recently, the National Company Law Appellate Tribunal(NCLAT) had ruled in Essar Steel Ltd's case that the Committee of Creditors(CoC) had no role in distribution of claims and brought lenders (financialcreditors) and vendors (operational creditors) on par.Sitharaman quoted a Supreme Court judgement tosay that with implementation of the Code, it is no longer a defaulter'sparadise.