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Insolvency and Bankruptcy Code to be amended passed by the Parliament

The Parliament on 12th March 2020 passed a bill to amend the Insolvency & Bankruptcy Code, 2016. The Insolvency and Bankruptcy Code (Amendment) Bill, 2020 was approved by Lok Sabha on 6th March 2020. This bill replaces an ordinance. This is the 4th time that the IBC Code is proposed to be amended. It aims adhere to a Supreme Court order in "letter and spirit". The bill aims to remove the issues and bottlenecks in the CIRP. The aim of this amendment is to protect the new owners against any liabilities or prosecution arising due to the default by the previous owners. There have been the introduction of new sections to it. The aim is to reduce frivolous litigations.

This gives an additional requirement for certain classes of financial creditors for filing an application to the adjudicating authority. These classes include real estate allottees and security or deposit holders represented by a trustee or agent. The application by these creditors should be filed jointly by at least 100 such creditors or 10% of their total number, whichever is less. The Bill brings to the light that a license, permit, registration, quota, concession, clearances or a similar grant or right will not be terminated or suspended during the Moratorium period.

 

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