New Delhi: The government will soon promulgate an ordinance to amend the Insolvency and Bankruptcy Code, aimed at tightening the current framework amid rising number of insolvency cases. The Cabinet on Wednesday approved bringing in an ordinance to make “some changes” in the Code, corporate affairs minister Arun Jaitley said. The Code, which became operational in December last year, provides a market-determined and time-bound insolvency resolution process.
Over 300 cases have already been approved by the NCLT to be taken up under the law, implemented by the corporate affairs ministry. Briefing reporters after the Cabinet meeting, Mr Jaitley said some changes are proposed in the Code and it is being done by way of an ordinance. He did not divulge specific details about the proposed ordinance.
The proposal for ordinance also comes at a time when there are concerns in certain quarters about various aspects of the Code, including the possibility of promoters wresting back control of a company under the insolvency process. “The whole process is at an advanced stage and therefore you want the process to go on the right track,” he said.
Reports suggest that wilful defaulters will be barred from the auction. The corporate affairs ministry has already set up a 14- member committee to identify and suggest ways to address issues faced in implementation of the law. The Insolvency Law committee, chaired by corporate affairs secretary Injeti Srinivas, will take stock of the implementation.
