Crisp summary changes in BANKRUPTCY CODE - For easy reference:
1- Commencement of Part III of the code which deals in "Insolvency resolution & Bankruptcy for INDIVIDUALS & PARTNERSHIP FIRMS"
2- Currently the sec 5(25) & 5 (26) covers resolution applicant can be ANY PERSON which has now given some conditions and hence excludes certain class of persons/ entities,
To exclude certain class of persons, sec 29A has been inserted which defines that -
>Willful defaulter,
> NPA account holder which remains NPA by more than one year,
> Valid GUARANTEE given in favor of any such CORPORATE DEBTOR which is under IBC
> All related persons for the above persons e.g. promoters, management etc
3- Currently the sec 25(2) (h) states that resolution professional invite certain class of stakeholders to put forward resolution plan BUT now the section has been amended to enable RP to define CERTAIN criteria within which such resolution plan can be submitted (after COC approval)
4- In case any CURRENT PLAN is yet to be approved by COC then it will be rejected by considering sec 29A (as above) and new Plan will be sought,
5- Currently the sec 35(1)(f) gives power to a LIQUIDATOR to sell IMMOVABLE/ MOVABLE property to ANY PERSON which has not barred subjecting to sec 29A(as above),
6- Sec 235A has been inserted to INVOKE PENALTY when any contravention of IBC happens, this new section will be applicable in cases where NO SPECIFIC PENALTY mentioned. The PENALTY will be MINIMUM OF 1 LAC and go upto MAX 2 CROREs,
7- Consequential amendments in section 240 of the Code, which provides for power to make regulations by IBBI, have been made for regulating making powers under section 25(2)(h) and 30(4).
For reading press release please refer link - http://pib.nic.in/newsite/erelease.aspx?relid=173771
1- Commencement of Part III of the code which deals in "Insolvency resolution & Bankruptcy for INDIVIDUALS & PARTNERSHIP FIRMS"
2- Currently the sec 5(25) & 5 (26) covers resolution applicant can be ANY PERSON which has now given some conditions and hence excludes certain class of persons/ entities,
To exclude certain class of persons, sec 29A has been inserted which defines that -
>Willful defaulter,
> NPA account holder which remains NPA by more than one year,
> Valid GUARANTEE given in favor of any such CORPORATE DEBTOR which is under IBC
> All related persons for the above persons e.g. promoters, management etc
3- Currently the sec 25(2) (h) states that resolution professional invite certain class of stakeholders to put forward resolution plan BUT now the section has been amended to enable RP to define CERTAIN criteria within which such resolution plan can be submitted (after COC approval)
4- In case any CURRENT PLAN is yet to be approved by COC then it will be rejected by considering sec 29A (as above) and new Plan will be sought,
5- Currently the sec 35(1)(f) gives power to a LIQUIDATOR to sell IMMOVABLE/ MOVABLE property to ANY PERSON which has not barred subjecting to sec 29A(as above),
6- Sec 235A has been inserted to INVOKE PENALTY when any contravention of IBC happens, this new section will be applicable in cases where NO SPECIFIC PENALTY mentioned. The PENALTY will be MINIMUM OF 1 LAC and go upto MAX 2 CROREs,
7- Consequential amendments in section 240 of the Code, which provides for power to make regulations by IBBI, have been made for regulating making powers under section 25(2)(h) and 30(4).
For reading press release please refer link - http://pib.nic.in/newsite/erelease.aspx?relid=173771
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