Parliament passes Insolvency & Bankruptcy Code Bill

New Delhi: 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 insolvency resolution process and to protect last-mile funding and boost investment in financially-distressed sectors.

The Bill replaces an ordinance.

Discussion on the motion to consider the Insolvency and Bankruptcy Code (Amendment) Bill, 2020 in the Rajya Sabha was moved by Union Finance Minister Nirmala Sitharaman.

After a debate on the Bill, Sitharaman explained to the members “why we are constantly coming up with amendments... Couldn’t we think of these aspects when the Bill was introduced in 2016 and even then, why so many ordinances?”

She pointed out that the government is listening to the industry — small, medium, big — and understanding their requirements with a change in law and with a change in approach.

“We waited for resolutions and the results coming out of them were not acceptable,” she said.

The Finance Minister said that earlier companies did not know where they were and debtors and creditors were both worried. “So the need to Insolvency and Bankruptcy Code arose and thereafter it was brought in 2016 and both Houses discussed and cleared the Bill,” she said.

The minister explained that because of the changing requirements and also the requirement to fine tune the Act itself, the need arose to amend every time.

“So we are also quick enough in coming up with changes to the Act... it has no other motive. We are absolutely responsive and are in tune with the time. Further, periodically, we are reminded that Supreme Court has 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 and spirit,” she said. (IANS)

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