In November 2017, the Government had constituted the Insolvency Law Committee to make recommendations for ironing-out the initial implementation issues under the Insolvency and Bankruptcy Code, 2016 (Code). Subsequently, in March 2019, the Insolvency Law Committee was reconstituted as a standing committee for reviewing the implementation of the Code on an on-going basis and making suitable recommendations to enhance its effectiveness and efficiency.
The reconstituted Insolvency Law Committee, released its report in February 2020 and suggested further amendments to the Code, many of which were implemented through the Insolvency and Bankruptcy Code (Amendment) Act, 2020 (‘Amendment Act’).
Some of the important changes brought out by the Amendment Act are as follows:
(i) It introduces a minimum threshold for initiation of the Corporate Insolvency Resolution Process (CIRP) by creditors belonging to a large class of creditors (such as classes of homebuyers and deposit-holders): an application for initiation of CIRP by such a creditor is required to be jointly filed with at least a hundred other such creditors or 10% of the total number of creditors in that class, whichever is less. In case of home-buyers, this threshold is calculated on the basis of the total number of homebuyers that are part of the same real estate project.
(ii) It prohibits the termination or suspension of government licences, permits, concessions etc., during a period of moratorium, merely on the grounds of insolvency, provided that the current dues arising out of the use of such licences, permits, concessions are paid during the moratorium.
(iii) It empowers the resolution professional to mandate the continuation of supply of goods and services that are critical for running the business of the corporate debtor, during a CIRP.
(iv) It introduces a new provision that is aimed at protecting a corporate debtor that is successfully resolved during a CIRP and is taken over by a third-party resolution applicant, from being held liable for offences committed by the erstwhile management of the corporate debtor.
About the Contributors
Debanshu Mukherjee
Debanshu is one of Vidhi’s Co-Founders. He has over a decade of experience in commercial laws and the financial sector and has advised the Government of India on several legislative projects in this space. He was instrumental in advising the Government on the design and drafting of the Insolvency and Bankruptcy Code and its subsequent implementation. He has developed and curated Vidhi’s work on insolvency law, corporate law, financial regulation, and competition law and conceptualized its Bankruptcy Research Program. He has served as a member of a Government-appointed committee for operationalizing the National Company Law Tribunal and deposed before two Parliamentary committees examining financial sector legislation. He has also worked as a teaching fellow at Harvard Law School.
He is an alumnus of the Harvard Law School, the University of Oxford, and Hidayatullah National Law University. He attended Harvard as a Fulbright Scholar and was awarded the Irving Oberman Memorial Prize in Bankruptcy and the Dean’s scholar prize in Corporations. He was also awarded a Distinction for his graduate studies at Oxford. In 2017, he was selected for NYU School of Law’s Hauser Global Scholarship, which he waived. His academic work has been published in peer-reviewed journals and an edited book published by Cambridge University Press, New York. He has been consulted by and mentioned in global business publications, such as IFR Asia and The Economist. Earlier, Debanshu practiced as an M&A and regulatory lawyer with AZB & Partners at its Mumbai and New Delhi offices.
Aishwarya Satija
Aishwarya was a Senior Resident Fellow working in the area of Corporate Law and Financial Regulation. At Vidhi, she has primarily worked on engaged/commissioned projects from various ministries, statutory authorities and regulators, where she provides legal research and drafting support at various stages of law-making. Aishwarya works on a variety of legal and regulatory matters and allied issues in public policy, chiefly related to insolvency laws, competition laws and corporate governance laws. Aishwarya graduated with a B.A. LL.B (Hons.) from Jindal Global Law School (JGLS) in 2017. During her time there she worked on two human rights reports and attended specialised courses in Advanced Corporate Law and Competition Law. She has also interned under Senior Advocate Ramji Srinivasan, in Avantha Holdings Ltd. and in leading law firms.
Oitihjya Sen
Oitihjya was a Research Fellow working in the area of Corporate Law and Financial Regulation and with the Vidhi Bankruptcy Research Programme.
Manmayi Sharma
Manmayi is a Senior Resident Fellow working with Disability (Inclusion & Access). Manmayi is a graduate of the National University of Advanced Legal Studies, Kochi (2016). Prior to joining Vidhi, Manmayi worked at the law firm of Dhir & Dhir Associates, where she litigated and provided advisory services to various clients in matters pertaining to the Insolvency and Bankruptcy Code. She has also previously worked with the Centre for Law and Policy Research, where she litigated in the areas of public health, women's rights and rights of disabled.
Shreya Prakash
Shreya was a Research Fellow at Vidhi.