Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018 (the “Bill”) passed by Lok Sabha
By Editorial Team INSOL India Posted On : August 15, 2018
The Bill was passed by the Lok Sabha on July 31, 2018, paving way to replace the June 6, 2018 Ordinance (“Ordinance”) subject to approval from the Rajya Sabha. The most distinguishing feature of the Bill when compared to the Ordinance is the requirement of resolution applicant to seek prior approval of the Competition Commission of India (“CCI”) before approval of a resolution plan by the committee of creditors (“CoC”). Introduction of proviso in Section 31(4) of Insolvency Bankruptcy Code (“the Code”) mandates the above. The amendment seeks to prevent derailment of resolution process at a later stage due to claims of incapacity of the bidder from the perspective of competition law.
Further, the Bill also inserts a proviso in Section 5 clause 12 of the Code, according to which if the order admitting the application under Section 7, 9 or Section 10 of the Code does not appoint the Interim Resolution Professional (“IRP”), the insolvency commencement date shall be the date on which IRP is appointed by the Adjudicating Authority (“AA”).