The Insolvency and Bankruptcy Code (Amendment) Bill, 2020 was passed by voice vote in the Rajya Sabha on Thursday. It was passed in Lok Sabha on March 6.
The amendments are aimed at streamlining the insolvencyresolution process and to protect last-mile funding and boost investment infinancially-distressed sectors.
The Bill replaces an ordinance.
Discussion on the motion to consider the Insolvency andBankruptcy Code (Amendment) Bill, 2020 in the Rajya Sabha was moved by UnionFinance Minister Nirmala Sitharaman.
After a debate on the Bill, Sitharaman explained to themembers “why we are constantly coming up with amendments… Couldn’t wethink of these aspects when the Bill was introduced in 2016 and even then, whyso many ordinances?”
She pointed out that the government is listening to theindustry — small, medium, big — and understanding their requirements with achange in law and with a change in approach.
“We waited for resolutions and the results coming outof them were not acceptable,” she said.
The Finance Minister said that earlier companies did notknow where they were and debtors and creditors were both worried. “So theneed to Insolvency and Bankruptcy Code arose and thereafter it was brought in2016 and both Houses discussed and cleared the Bill,” she said.
The minister explained that because of the changingrequirements and also the requirement to fine tune the Act itself, the needarose to amend every time.
“So we are also quick enough in coming up with changesto the Act… it has no other motive. We are absolutely responsive and are intune with the time. Further, periodically, we are reminded that Supreme Courthas come up with this order. We humbly accept the order of the Supreme Court.Our amendments are in line with what Supreme Court has said in letter andspirit,” she said.
“Amendments are periodic. Ordinance do come because wedon’t want a hiatus,” she said.
She also spoke about performance of the National Company LawTribunal.
“Total cases dealt by NCLT till January 31, 2020, are64,423 out of which 27,107 pertain to Insolvency and Bankruptcy Code (IBC).Total cases disposed of were 43,102 out of which 14,977 pertain to IBC,”the minister said.
She also said that the total pending cases are 21,421 out ofwhich 12,130 cases pertain to IBC.
The NCLT is encouraging disposal of cases under the IBC.
Talking about home buyers’ concerns following amendments,the minister said, “I had several rounds of meetings to address the issueof home buyers.”
She pointed that government understands the difficultiesbeing faced by the home buyers . “We have show clear, pro-activeinitiatives to sort out the cases which are lying incomplete. “We aregiving last-mile completion related funding through single windowmechanism,” she said.
The minister also said that the number of cases pertainingto concerns of home buyers filed since inception NCLT is 2,454.”We aretaking care of the interest of home buyers,” the minister said.
About Micro, Small & Medium Enterprises (MSME) concerns,the minister said, “We are working with the MSME Ministry and looking intosuggestions that MSME Act should be amended.”The Insolvency and Bankruptcy Code, which cameinto force in 2016, has been amended thrice.