Govt working on amendments to insolvency law, ET LegalWorld
The government is working on amending the insolvency law, including the provision related to bidders requiring CCI approval for resolution plans involving combinations before they approach the Committee of Creditors, according to a senior official. The Insolvency and Bankruptcy Code (IBC) provides for a market-linked and time-bound resolution of stressed assets and under the framework, Committee of Creditors (CoC) is a key element.
As part of further improving the insolvency ecosystem as well as reduce the resolution timelines, the corporate affairs ministry has been working on amending the IBC.
The senior official on Tuesday said the ministry is working on amendments to the IBC and they are likely to be moved in the next Parliament session.
Among other provisions, amendments are likely in Section 31 (4) of the IBC that requires bidders to seek approval from the Competition Commission of India (CCI) before submitting their resolution plans to the CoC.
The proposed amendment to Section 31 (4) is aimed to ease the burden on the CCI and will be part of the overall amendments, the official said.
As per this section, for resolution plans that have a provision for combination, as referred to in section 5 of the Competition Act, 2002 (12 of 2003), the resolution applicant shall obtain the approval of the CCI under that Act prior to the approval of such resolution plan by the CoC.
The ministry has made six amendments to the IBC and at least 122 amendments in regulations since the inception of the Code.
A total of 1,119 cases have been resolved through the Corporate Insolvency Resolution Process (CIRP) leading to a recovery of about Rs 3.58 lakh crore to the creditors under the Code till December 31, 2024.
