Chapter 14

Insolvencyand Bankruptey Code 2016

Synopsis
CODE
INSOLVENCY AND BANKRUPTCY 2016
WI NEED OF BANKRUPTCY CODE,. PROCESS
INSOLVENCY AND
H
CORPORATE INSOLVENCY RESOLUTIONresolution
IH
Step by step timeline of dispute COMPANIES ACT AND IBC
(1) UNDER
VOLUNTARY LIQUIDATION Liquidation of a Corporate Body Under IBC
433
of Voluntary 435
(1) ProcedureUNDER ACT, 2013 vis-d-vis
WINDING UP
BANKRUPTCY CODE, 2016
COMPANIES INSOLVENCY AND 435
Up 436
(1) Voluntary Winding up proceedings from High Court to Tribunal 436
(2) Transfer of winding
Act and Liquidation Under IBC 436
(3) Winding Up Under Companies 437
Review Questions 448
LNEED OF INSOLVENCY AND BANKRUPTCY CODE
The legal framework for resolving Corporate Insolvencies in India has been the
decades. The operation of the Sick
subject of much criticism for over two
Companies (Special Provisions) Act, 1985 ("SICA) attracted criticism almostIndust
sinceriaitsl
enactment for its lengthy delays in determining the viability of sick enterprises and for
lending itself to significant abuse by debtor companies looking to draw off their as
from creditors. Another commonly heard complaint was the implementation of winding
up and liquidation proceedings in the High Courts, which could take years or decades to
be completed. Therefore, the demand for a better insolvency law arose because of the
lengthy winding-up proceeding which the company had to undergo in case they were
declared Insolvent and to avoid such lengthy procedure they had to opt for comprising.
arrangement, takeover or acquisition be a corporation that was willing to or by those
corporations which they owed heft debt,
According to the World Bank's Ease of Doing Business Report, it took more than
four years on an average to resolve disputes related to insolvency in India. Hence, the
Insolvency and Bankruptcy Code was introduced in the country for timely resolution of
disputes. Moreover, the Code gives a sense of security to the creditors that they will be
able to recover the money they have given to the debtors as credit. With Sick Industrial
Companies (Special Provisions) Repeal Act' 2003, (SICA) being repealed, the companies
who tried to cheat the law by changing the numbers in their balance sheets to escape the
clutches of the creditors will no longer be able to do that, A lot of individuals and
companies deliberately defaulted on the repayments. We all know Mt. Vijay Mallya, a
business tycoon and how he wilfully defaulted on a bank loan amount of more than Rs.
9000crores and took
Shelter in another country. Similarly, how PNB was defrauded of Rs 11,400crore by
Nirav Modi, who once figured in the Forbes list of richest Indians and now is in U
Prison.

https:/taxguru.in/corporate-law/insolvency-bankruptcy-code-2016-amendments.html.
 431

Code 2016
Insolvency andBankruptcy
CODE,2016
BANKRUPTCY US Laws. As
Chap. 14
INSOLVENCY AND from the
II.
Bankruptcy Code is mainly taken aims at establishing a
offInsolvency and Code, 2016 and bankruptcy of
Theidea Bankruptcy
Suggeststhe Insolvency and related to the
insolvency
insolvency which
name
the unified, uniform law to solve issues Code is
single, and firms. One of the keywords ofthe or afirmis unable to pay
companies,individuals where a
person/company inter-changeably
as being in a state which is often used
understood
on he
owed. Another keyword is bankruptcyhairline difference between the two,
hack the debts insolvency. However, there is a highlights their obligations
word courts which
withthe
refers to a legal status imposed by theand their inability to repay the same.
hankruptcy have taken loans from are critical for
towards the creditors they and insolvency regime
Recognising that reforms in the bankruptcy
alleviating distressed credit markets,
the
environment and November 2015,
improving the business Insolvency and Bankruptcy Code Bill in (BLRC) under
Government introduced the Committee'
constituted Bankruptcy Law Reforms recommendations from a
drafted by a specially After a public consultation process
and
Insolvency and
the Ministry of Finance. both houses of Parliament passed
the
on 28
joint committee of
Parliament,
After the assent of the President of India
2016.
Bankruptcy Code (Code) in May came into force on 19th August 2016.
Code
May 2016, the provisions of the under this Code was passed by National
resolution order Automotive Ltd on 14
The first insolvency the case of Synergies-Dooray
Company Law Tribunal (NCLT) in of Non-performing asset (NPA)high- value cases,
number
August 2017. There are largethe Reserve Bank of India for resolution to NCLT under this
which have been referred by debt of 490 billion (US$7.1 billion), Supreme
Essar Steel (under
Code. In the case of cleared way for Arcelor Mittal India and Nippon Steel
Court in its historical judgementcomplete the takeover by end of Dec 2019, as a result of
Japan to form a joint venture to 42,000 crore (US$6.1 billion). Similarly, in the case of
which, banks to recover up to Rs. billion), Tata Steel, through its wholly
Bhushan Steel (Debt of Rs 490 billion (USS7.1 acquired 72.65 per cent controlling
has
owned subsidiary Bamnipal Steel Ltd (BNPL),36,400 crore. The company was selected as the
stake in this company for around Rs
stake in Bhushan Steel, as part of
highest bidder in March 2018 to buy a controlling
2018 has a recovery amount of Rs
bankruptcy proceedings. The case resolved in May (Debt Rs 492 billion (USS7.1
36,400 crore (USSS3 billion). In Bhushan Power & Steel
Steel Ltd takeover, but the
billion), Committee of Creditors (CoC) cleared way for JSW in financial dealings of
process is halted after Enforcement Directorate uncovered fraud
the company by previous promoters. Lanco Infra (Debt Rs billion 450 billion (US$6.5 billion)
has been ordered for liquidation. Jet Airways (Debt Rs 146 (US$2.1 billion), date
for submitting bids was extended beyond mid-Dec, 2019. Synergy group and Hindujas
are the only interested bidder currently.
Key Features of the Code are as follows:
1. Authorities under the Code: Under the Insolvency and the bankruptey code,
2016 following authorities are to look into the proper functioning of the Code and remove
iregularities if any.
(a) Insolvency and Bankruptey Board of India (IBBI): With a new Code in place
repealing certain previous Acts there was also a need for a body to ensure that
the provisions of the new Code are being effectively implemented and the
perpetrators accordingly punished. Hence on lst October 2016, the Insolvency
and Bankruptcy Board of India (IBBI) was established for overseeing
insolvency proceedings and entities like Insolvency Professional Agencies
(IPA), Insolvency Professionals (IP) etc. The Board (IBBI) appointed by the
 Insolvency and Bankruptcy Code 2016

memberN nomiClhnap,ate14d
432
will have 10 members, including five
Central Government,
Government of whomthree of them to be a whole-time
by Central
menber to be
nominated by the Reserve Bank of
India, membeIS Theand
insolvency ex-oficio,
one the Board includes registration of
primaryfiunction of information utilities, provide
insolvency institutions,
ofbankruptey
resolution, etc.
guidelines
Professional Agency (PA): Insolvency Professional
on prtheofesconduct
ionals,
(6) Insolency to register with the Insolvency and Bankruptcy Agency (1PA)
Board of
is required Insolvency Professional Agencies
According to Regulations,
of Companies Act, 2013, with only a India,
registered under Section 8 professional
functioning as an insolvency agency under the
the sole companyof
object
entitledto be registered as an insolvency professional agencyi(IPA).
n solvency Code is
(c) Resolution Professional: The insolvency process will be managed by licensed
professionals. Aperson to be appointed as an Insolvency
withthe Insolvency ProfessionalProfessional (IRP or
RP) should first get enrolled Agency (IPA) and
then register on theInsolvency and Bankruptcy Board of India (IBBI). Though
power ofRP is wide, it is only limited to verifying the claim
the made and not to
decide upon itself whether such claim is fit for the process. These
wll also control the assets of the debtor during the insolvency process,. professionals
The Resolution Professional's primary function is to take over the
of the corpoate borrower and operate its business as a going concernmanagement
under the
broad directions of a committee of creditors. This is similar to the annr
under the UK insolvency laws, but distinct from the "Debtor in Possession
approach under Chapter 11 of the US bankruptcy code.
() Bankruptey and Insolvency Adjudicator: The Code proposes two separate
tribunals to oversee the process of insolvency resolution, for individuals and
companies: () the National Company Law Tribunal for Companies and Limited
Liability Partnerships; and (i) the Debt Recovery Tribunal for individuals and
Partnerships. There is also a provision of setting up of tribunals for hearing
appeals. The appeals from the National Company Law Tribunal will be heard by
the National Company Law Appellate Tribunal and appeals from the Debt
Recovery Tribunalwill be heard by the Debt Recovery Appellate Tribunal.
2. Time-bound Resolution: Prior to the IBC(Code) there was no time limit on the
duration of the disputes related to insolvency. The Code not only gives a definite time
Tame withinwhich the disputes need to be resolved but also separation in the resolution
rocesses for individuals and companies/firms, For the companies, the process will have
be completed within 180 days, however, it may be extended by 90 days, if amajority
fthe creditors agree to it.
3. Moratorium: An essential provision of the insolvency and bankruptcy code is
anting of moratorium by the court. A moratorium which in simpler terms
ohibition, on the actions of the creditor. means
4. Payment of Debts: The debts that have become due will be
en below paid in the mante
Insolvency Resolution cost and liquidation cost
Debts to secured creditor
Wages and unpaid dues to employees
Financial debts to unsecured creditors and workmen's dues for earlier period
Crown debts and debts to secured creditor following enforcement of security
interest
 Insolvency and BankruptcyCode 2016 433
Remainingdebts
Preferenceshareholders
EquityShareholders or partners.
II.CORPORATE INSOLVENCY RESOLUTION PROCESS
Duringthe
Insolvency Resolution Process, financial creditors assess whether the
eftr'sbusinessis viable to continue and the options for its rescue and revival. If the
NYhencyresolutionprocess fails or financial creditors decide to wind up and distribute
ofthe debtor,
ANeS , it is known as Liquidation.
The
Code outlines separate insolvency resolution processes for individuals,
aniessand partnership firms. The process may be initiated by eitherthe debtor or the
titors.A maximum time limit, for completion of the insolvency resolution process,
for corporates and individuals. For companies, the process will have to be
sbeenset
apleted in 180 days, which may be extended by 90 days, provided majority of the
aditors agree. For startups (other than
partnership firms), small companies and other
nies (with asset less than Rs. 1crore), resolution process would be completed
in 90 days of initiation of request which may be extended by 45 days.
resolution
nStep by step timeline of dispute Afinancial creditor (for a
Step 1: The insolvency application needs to be filled:
cfaulted financial debt) or an operational creitor (for an unpaid operational debt) can
against a corporate debtor at the National
uitate an Insolvency Resolution Process defaulting corporate debtor, its shareholders or
Company Law Tribunal (NCLT). The
insolvency proceedings.
emnloyees, may also initiate voluntary either reject or accept the application within a
will
Step 2: The respective authority the insolvency application: The National Company
period of 14 days from the filing of
14 days of the application if it deems fit
has to pass an
Law Tribunal (NCLT) within the party who has approachedthanit for
or denying the contention of or
order of either acceptingprovided default made on the part of the debtor is moreTrading
the Surendra
the Insolvency process 1495). However, in a decided case Re: Ors, the Hon'ble
CXCeed INR 100,000 (USD Kamlapat Jute Mills Company Limited and
Hon'ble NCLT has to
Company v. Juggilal the period of 14 days within which the
Supreme Court held thatdirectory and not to be interpreted strictly. application within 7
the
pass the order is a mere the applicant to rectify the defect in
to
If need be, a noticeby the adjudicator. accepts
Once the NCLT Process
also be given Process Begins:
days shall Corporate Insolvency ResolutionCorporate Insolvency Resolution
Step 3: debtor enters the the period, cease to have any
corporate suspended for management is
the application., Board of Directors is
company and the companies' Resolution
(CIRP). Company's affairs of the
to day "Interim Resolution Professional". An Interim (name of
Control over the day
independent Professional is appointed
transferredto an office till the Resolution
the Operational Creditor as the
the creditor or
Professional shall hold
Corporate debtor,
Financial
the incudes:
RP is given by Professional(IRP)
case may be). Interim Resolution announcement.
public the steps as to
TheRole ofclaims submittedafter the corporate debtor to lay down
Verify information utility of thecompany be revived.
Financial
Access
what manner can the (CoC) that will only comprise of
bow and in Committee of Creditors personnel of corporate debtor.
Formthe take assistance from
the of it.
take control and custody
and
Creditor and Corporate Debtor
assets of
Securethe
 Insolvency and Bankruptcy Code 2016
The NCLT orders a moratorium
434

"calm
Step 4:
period'
Moratorium Begins:
period ofthe
Insolvency Resolution Process (IRP).
proceedings
operations forthe which nojudicialtermination for
during assets, or of
on the
This
recovery, enforcementoperofatesebtor
essential contracts can asa
Chap.14
transfer of
interest, sale or Moratorium will exist till the Corporate Insolvency
againstthedebtor.Itbars
Resolution secourty
(CIRP) is in force.
Step 5:
Resolution
Appointment of theseven days of their Professional:
Once the
formation they wil
Proces
formed, within
Creditors(CoC) is Professional who
first meeting
and will
a Resolution would be an
andappoint rest of the Corporate Insolvency Resolution
function for the total number of CoC is required for
co n v ene
ithendepePrnodceenst (OpeIRrsPoYn
their
Approval of 66% of the Resolution
Professional
sameap oIpeSOn,
ntment
term. (RP). The may be the
Resolution Professional
Professional (IRP)" may be appointed as Resolution gf
Resolution 1.e,.
Interim
the consent of
as that ofIRP.
IRP is required in both cases. The power and duties of the RP

the CoC may with a 51% vote

Profes ional
are the bt
sarne
At any point
in time,
Professional(RP) who is acting
change Resolution
against their interest or is revealed later the
corporate debtor. One of the most important roles that
hel she is 2
related party to the
to form an Information
Memorandum containing relevant information plawhiyedch RPis
by the
plan.
the resolution applicant to form a a resolution plan.Section 29A lays down the list ofhel,
resolution would
person who is not eligible to submit the
of 180 days is given to the appointed
The maximum time period
Professional to complete the Corporate Insolvency Resolution Process
resolution process can be extended for another 90 days if a majority of creditors agreeTheto
Resolution
(CIRP).
it.
Step 6: Approval of Resolution Plan and Liquidation: Resolution Professional (RP
will put forth the resolution plan before the shareholders and Commitee of Creditr
(CoC) who by avoting threshold of 66% willeither accept or reject the resolution pl.
The resolution plan should consist of a detail plan of reviving the company and paig
the creditors and other affected parties in the manner provided. Once the Commite o
Creditors approves the plan, Resolution Professional will submit it to the Adjudicating
Authority who willensure that the resolution plan is satisfactory in nature and could be
implemented. The resolution plan that is approved by the Adjudicating Authorty ad
Committee of Creditors willbe binding over all the debtors and creditors. The resolutin
plan would be submitted to NLCT, who will then take steps for its implementation. T
moratorium period will cease to exist once the resolution plan is accepted.
In case the company successfully complete the process of insolvency andthe plan
accepted is put to force then the manner of distribution, i.e., an1order of priorityy wouldbe
The cost incurred in CRP or
liquidation.
Workmen due that were existing 24 mths before the CIRP.
Wages and employees unpaid dues.
Debts of unsecured creditor
Debts of the secured creditor
Remaining
Share of
debts
Preference
And at the end to theshareholders
Equity
 Chap. 14 Insolvency and Bankruptcy Code 2016 435

A.Insolveney Resolution Process For

Individuals/Partnerships
For individuals and unlimited partnerships, the Code applies in all cases where the
minimum defult amount is INR 1000 (USD 15) and above, The Code envisages two
distinct processes in case of insolvencies: autonatic fresh start andinsolvency resolution.
Under the automatic fresh start process, eligible debtors (basis gross income) can apply to
the Debt
Recovery Tribunal (DRT) for discharge from certain debts not exceeding a
specified threshold, allowing them to
consists of preparation of a repayment start afresh. The insolvency resolution prote
plan by the debtor. for approval
approved, the DRT passes an order binding the debtor and crcditors to the of credtos
Ifthe plan is rejected or fails, the debtor or repaymnent pan
IV. VOLUNTARY creditors may apply for a bankruptcy orde.
LIQUIDATION UNDER COOMPANIES
On March 31, 2017, the Insolvency and Bankruptey Board of India ACT AND TB
Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) has notified the
2017. The New Regulations provides the process for initiating Regulations,
voluntary liquidation
corporate person 1.e., companies, limited liability partnerships and any other persons by a
incorporated with limited liability. Before introduction of New Regulations, voluntary
liquidation of the companies was controlled by the Companies Act, 1956, since the
provisions as mentioned in the Companies Act, 2013 had never been notified. Now, the
provisions of voluntary liquidation as mentioned in Companies Act, 1956 as well as
Companies Act, 2013 have been repealed/omitted.
)Procedure of Voluntary Liquidation of a CorporateBody Under IBC
The brief procedure of voluntary liquidation of a corporate person under IBC is as
follows:
(1) Board of Directors to declare that the company will be able to pay its dues and is
not being liquidated to defraud any person;
(2) For approving the proposal of voluntary liquidation and appointment of
liquidator, a special resolution is to be passed within 4 (four) weeks of the
aforesaid declaration(s). If a corporate person owes debts, approval of creditors
by two- third majority would also be required;
(3) Within 5 (five) days of approval by members, a public announcement is to be
made inviting claims of all stakeholders, in newspaper as well as on website of
the Corporate person;
(4) Preliminary report about the capital structure, estimates of assets and liabilities,
proposed plan of action etc., is to be prepared and submission of the same to a
corporate person within 45 (forty-five) days of such approval;
(5) Claims are to be verified within 30 (thirty) days from the last date for receipt of
claims and list of all stakeholders are to be prepared within 45 (forty-five) days
from the last date for receipt of claims;
(6) Opening of a bank account in a scheduled bank, in the name of the corporate
person followed by the words in voluntary liquidation', for the receipt of all
moneys due to the corporate person;
realization of
(7) Sale of assets, recovery of monies due to corporate person,
uncalled capital or unpaid capital contribution;
from the
(8) Distribution of the proceeds from realization within 6(six) months
receipt of the amount to the stakeholders;
(9) Submission of final report by the liquidator to the corporate person, the Board
and application to the National Company Law Tribunal for the dissolution;
(10) Submission of NCLT order regarding the dissolution, to the concerned Registrar
of Companies within 14 (fourteen) days of the receipt of the order.
 lnsolvency and Bankruptcy Code 2016
436 COMPANIES
V WINDING UP UNDER BANKRUPTCY ACT, 20133
By virtue of
INSOLVENCY AND
Section
shall
255 of the Insolvency
beamended in the manner
and CODE, 2016vis-à-vis
Bankruptey
specilied
Chap:l
2013
Companies Act, amendments to The
Companies
Act,
in the
Code, 20\6, the
XI now
ofthe Code (About
defines

Companies Act, 2013

the term "winding up" by introducing 2013).
a
Act as twinding up under this Act or
Bankruptey Code, 2016. as
new The
Section
Eafolerveesnatilhd SScchheeddi
Insolvency

Code. The
and
governed by the provisions of both the
will now be significant changes introducedIbythe
other
provisions of
applicable
Thus,
Code
'voluntary winding
Compani(IBC)
Act, up
to
up' and he
liquidation proce lins
es windin2013
g under h
2013include removal ofpay debts' from the
ground of 'inability to
relating to these have been incorporated the Code
in Companies Act, 2013 as
win d
thin
e g Companies
up on Acthe
Since, the provisions on
provisions applicable to
voluntary winding up;
every mode of winding up appointment of f
November. provided in the official
iqu id ato
proce tings
r
were never notified; therefore, prior to
i.e. voluntary winding up and winding up by 2016,
Tribunal, was
Companies Act, 1956. Section 271(1)(a) of Companies governed
winding up
through
by
th e
CompanesAct,201
any
an
modeof.
2013, which
winding up by Tribunal on account of inability to pay debts has been
255 of the IBC(Code). The same is now dealt with in
dealprtoviSIwionhs the,
Sections 7to 9 of the IBC (Code), being initiation ofaccordance withomi t ed by
process by financial and operational creditors.
Further, a remedy to initiate winding up
corporate the
provisIoSencstianof
insolvency resolution
companies that had ddefaulted in payment of debts proceedings
was not
against
available financialy solven
Act. However, this is now feasible under the IBC (Code). under the
Mode of winding up andlawapplicable is explainedin the Companies
Mode of Winding UP Law following table:
No. Applicable Applicable Regulations
Corporate insolvency resolution IBC, 2016
process on committing "default Insolvency
Board of India
and Bankruptcy
(erstwhile winding up
inability to pay debts)
on
Resolution Process for(InsolCorporat
vency
e
Winding up on grounds Persons) Regulations, 2016
than inability to pay debts other|CAct,
ompanies
2013
Court Rules
Voluntary winding up Companies Court Rules
Act, 1956
Source: Aman Parnami, an Associate in
Sridharan, Gurgaon Corporate Practice, Lakshmikumaran &
(I) Voluntary
Winding Up
The provisions of voluntary
presently stands omitted up winding
due to the provided under the Companies Act,2013
However, notification of Section 255 of the IBC (Code
which dealsthese
with provisions
the
now fall within the purviewpof e
Section 59 of theIBC(Code
o
(2) Transfer of voluntary liquidation of corporate rsons,e

All the windinupg up proceedi

ngs ngs
ffrom High Courttito Tribunal
pay debts onwinding proceedipending before High Court ground ofinabilitytt0
respondent, shalDecember 15, 2016, and the on servedon
l be transferred to the respective
notice of Bench
which of
havethe
not Trib
beenunal exercisins
Chap.14 Insolvency and Bankruptcy Code 2016 437
(eritorialjurisdiction over the concerned State and shall be dealt in accordance withthe
provisions ofthe Code. However, all the winding up proceedings pending before High
the notice
Courton grounds other than inability to pay debts on December 15, 2016 and
have not been served on the respondent, shall be transferred to the respective
ofwhich
hof the Tribunal exercising territorialjurisdiction over the concerned State and shall
dealt in accordance with the provisions of Companies Act, 2013. But, winding up
edings pending before High Court relating to volntary winding up till April1,
with the
2017, shall continue to be dealt with by the High Courts in accordance
orovisions of Companies Act, 1956.
ia Winding æp Under Companies Act and Liquidation Under IBC
According to Section 2(94A), winding up means winding up under the Act or
iauidation under the Insolvency &Bankruptcy Code, 2016, 0l evh
Section 270 of the Companies Act, 2013 i.e., the Modes of Winding up, has
been deleted after the enforcement of IBC.
Section 304 of the Companies Act, 2013 that deals with the circumstances in
omitted by the
which company may be wound up voluntarily has been
Insolvency & Bankruptcy Code, 2016 along with other sections relating to
voluntarily winding up under the Act.
(Transfer of Pending
On 7th December, 2016, the MCA issued Companies High
Proceeding) Rules, 2016, for transfer of pending legal proceedings from
Court To National Company Law Tribunal bench.
been divided into two types,
Winding up under the Companies Act, 1956 had voluntary winding up. This
and creditors
winding up
i.e., members' voluntary eliminated under the IBC.
distinction has now been initiate
of Section 59 of the IBC, only a corporate person is allowed to
In terms Default
voluntary liquidation process, which has not committed any default.
here includes those debts that has become due and payable.
THE FIRST SCHEDULE
(See section 245)
1932 (9 of 1932)
Amendment to the Indian Partnership Act,
be omitted.SCHEDULEe
shallSECOND
section 41, clause (a)THE
1. In
(See section 246)
Act, (1 of 1944)
Amendment to the Central Excise Reconstruction of Financial
and brackets
the words, figures brackets "the
1. In section 11E, for of (54 of 2002), "the words, figures and of Security
Assets and the Enforcement of Financial Assets and the Enforcement shall be
Securitization and Reconstruction the Insolvency and Bankruptcy Code, 2016"
2002) and
Interest Act, 2002 (54 of
substituted. THE THIRD SCHEDULE
(See section 247)
1961)
Income-Tax Act, 1961 (43 of force" the
Amendment to the words "for the time being in
the 2016
sub-section (6) of section 178, after the Insolvency and Bankruptcy Code,
In
figures "except the provisions of
words and
inserted.
 Insolvencyand| Bankruptcy Code 2016
THE FOURTHSCHEDULE
438 (See section 248)
Amendmenttothe Customs Act, 1962 (52 of
the
words and
figures "and
142A, forAssetsand the Enforcement of
1962)
he
In
section Financial
Reconstruetionofwordsandfigures
2002) " the
Enforcement
"the
Security
ofsubstituted
decuri
Interest
Act, 2002
Security ruct\nterieost
tisation nd keconst
and the
of
(64 andthe be
Assets Code,2016"shallTHE FIFH SCHEDULE
Bankruptey (See section 249)
Amendment to the Recovery of
Debts Dueto Banksand Financial Institutions, Act, 1993
(51 of 1993)
words fnancial
title, after the
individuals and
institutions", the
In thelong partnership firms"
1,
resolution
namely
and
bankruptey of

section1 ,
2. In sub-section(1), forthe words "Due to Banks and
Words"Instuen
(a) in "and Bankruptcy"shall be
words
(4), for the
substituted:
words The provision of this Code'"
Financial Insti utiong" h
sub-section provisions of this Code", shall be he
(6) in
as
3. In
otherwise
section 3,
provided,the
after sub-section (1), the following sub-section
be subsshaltitultewdo.rds"Save
namely: Government shall by notification establish inseted
IA) The Central and its benches as it may consider Such
Recovery Tribunals tonumbeexerrcisga
of
the jurisdiction, powers and authority of the Adjudicating Authority contered
Debts
such Tribunal byor underthe Insolvency and Bankruptcy Code, 2016.".
necessary,
4. In section 8, after sub-section (1), the following section shall be nserte

namely: "1A) The Central Government shall, by notification, establish such number oi
Debt Recovery Appellate Tribunals to exercise jurisdiction, powers andauthomty
entertain appeal against the order made by the Adjudicating Authoity under Part
Bankruptcy Code, 2016.".
of the Insolvency and
5. In section 17,
sub-section shall be inserted. namely:_
() after sub-section (1), the following
(IA) Without prejudice to sub-section (1), appointed by the
(a) the Tribunal shall exercise, on and from the date to be
Central Government, the jurisdiction, powers and authority to entertain a
Bankruptcy Cote.
decide applications under Part II of Insolvency and
2016.
headquarters"
(b) the Tribunal shall have circuit sittings in all district namely
shall be inserted,
(ü) after sub-section (2), the following sub-section Appellate Tribunalstal
(2A) Without prejudice to sub-section (2), the
Central Goverment,
exercise, on and from the date to be appointed bythe the order madebyte
jurisdiction, powers and authority to entertain appeals againstand Bankruptcy Cod:
Adjudicating Authority under Part II of the Insolvency
2016.".
 Insolvncy and Bankrptey Code 20l6 439
svtion 19, the following section shall be
inserted, nanely:
0A. The application made to Tribunal for exercising the powers of the
ANicating Authority under the Insolvency and Bankruptey Code, 2016shall be
keltwith the manner as provided under that Code."
20, in sub-section (4), after the word, brackets and
)the wors brackets and tigures 'or under sub-section () offigure
section"sub-
181section
of the
JheNYand Bankruptey Code, 2016" shall be inserted.
THE SINTHSCHEDULE
(Seesection 250)
Amendment to the Fnance Act, 1994 (32 of 1994)
ion SS, for the words and tigures "and the Securitisation and Reconstruction of
Assets and the Enforvement of Security Interest Act, 2002 (54 of 2002)", the
andfigures the Securitisation and Reconstruction of Financial Assets and the
Enthrement Of Security lnterest Act, 2002 and the Insolvency and Bankruptey Code,
NI6" shall be substituted.
THE SEVENTH SCHEDULE
(See Section 251)
Amendment tothe Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (54 of 2002)
In section 13, in sub-section (9), for the words "In the case of", the words and figures
Subiet to the provisions of the Insolvency and Bankruptey Code, 2016, in the case of"
shall be substituted.
THE EIGHTH SCHEDULE
(See Section 252)
Amendment to the Sick IndustrialCompanies
(Special Provisions) Repeal Act, 2003 (1 of 2004)
In section 4, for sub-clause (b), the following sb-clause shall be substituted,
namely
6) On such date as may be notified by the Central Government in this behalf, any
appeal preferred to the Appellate Authority or any reference made or inquiry pending to
or before the Board or any proceeding of whatever nature pending before the Appellate
Authority or the Board under the Sick Industrial Companies (Special Provisions)
Act,1985 (1 of 1986) shall stand abated:
or reference or inquiry
Provided that a company in respect of which such appealNational
to the Company Law
stands abated under this clause may make reference Code, 2016 within one hundred and
Tribunal under the Insolvency and Bankruptcy Insolvency and Bankruptcy Code, 2016 in
eighty days from the commencement of the and Bankruptcy Code, 201l6:
accordance with the provisions of the Insolvency
payable for making such reference
under
Provided further that no fees shall be company whose appeal or reference or
Insolvency and Bankruptcy Code, 2016 by a
clause.".
inquiry stands abated under thisTHE NINTH SCHEDULE
(See section 253) 2007)
Settlement Systems Act, 2007 (51 of "the
the Payment and words and figures
Amendment to (6), after the
sub-sections (4), (5) and Companies and
1. In section 23, in "the Act, 2013", the words
1949 (10 of 1949)" be inserted.
Banking Regulation Act, and Bankruptcy Code, 2016" shall
Insolvency
figures or the
 InolwmyomdIBonkruptey Code 2016
0
fipures"or the Insolvency and
the
Ad,2013"
beinserted
words nd
THE TENTIH SCHEDULE
(See section 254)
IVnkruptey Code,)
Limited Liability Aet, Parinership
Amendmenttothe omitted
be
section64,Clause(c)shall
In THE ELEVENTH SCHEDULE
(See section 255)
Amendmentstothe Companies
(Thecoverage of SickIndustrial Companjcs Act, 1985(18 Act,2013 2013)
of is
(SICA)
industrial companies, while the Companies Act, 2013 covered the
companies,andirrespective of their
rehabilitation of all253-269)
Act2013 (Section the rules made theresector.under provided for
Chapter XIX

not feasible. However,

process and winding up was
rehabilitation orliquidation effect from
with
2013, the
amending Companies Act Insolvencyprovisions
the date of resorted only hen
concerning the datedthe s
notification fCorigtpeatiievl
omitted. Section 255 of the
eleventh schedule omittedprovisions
revival
and
from
andrehabilitation
Bankruptcy
section 253 to
Code (|B sick
C),
section
269 2016companies
of read
the C with were
the
15/1 2016
Ac, 2013regarding the ofsick companies.)
1.In section 2, Companies
(a) for clause (25), the following clause shall|be
"(25) "Company Liquidator" means a person substituted, namely:by
appointed the
the Company Liquidator in accordance with the provisions
winding up of acompany under this Act:": of section s
275 for the Tribunal
(b) after clause (94) ,the following clauseshall be inserted,
"(94A) "winding up" means winding under this namely:- Act or liquidation under
the Insolvency and Bankruptcy Code, 2016, as applicable.".
2. In section 8, in sub-section (9), for the words "the
Fund formed under section 269", the words "Insolvency and RehabiBankruptcy
litation andFundInsolformet
vency
under section 224 of the Insolvency and Bankruptcy Code, 2016" shall be
3. In section 66, in sub-section (8), for the substituted.
words,
within the meaning of sub-section (2) of section 271, tobrackets and figures is unable,
pay the amount of his debt or
claim," the words and figures "commits a default, within the
Insolvency and Bankruptcy Code, 2016, in respect of the amount meaning of section 6of the
shall be substituted., of his debt or claim"
4. In sections 77, in sub-section (5), after the
ligures "appointed under this Act or the Insolvencywords and
"the liquidator", the words and
Bankruptcy Code, 2016, as te
case may be," shall be inserted.
5. In section 117 in
304",the words and figuressub-section
"section (3),
59 inof the
clause (), for the
Insolvency and word Code,"'s2016"
and figures
Bankruptcy ection
shall be substituted.
6. In section 224, in sub-section (2), after the words wound up underthis Act",the
words and figures "or under the Insolvency and Bankruptcy Code, 2016" shall be
inserted.
 Insolvency and Bankruptcy Code 2016 441
hap.
14

section 230,
6A.In
(a)
insub-section (1), after the word "liquidator", the words "appointed under this
Act or
under the Insolvency and
shall be inserted:
Bankruptcy Code, 2016, as the case may be,"
in sub-section (6), after the word "on the liquidator", the words "appointed
under this Act or under the Insolvency and Bankruptcy Code, 2016, as the case
may be," shall be inserted:
- In section 249, in sub-section (), for clause (e), the following clause shall be
gibstituted,namely:
(e) is being wound up under Chapter XX of this Act or under the
Insolvency and Bankruptcy Code, 2016.".
&Sections 253 to 269 shallbe omitted.
0 For section 270, the following section shall be substituted, namely:
270. The provisions of Part I shall apply to the winding up ofa company
by the Tribunal under this Act.".
10. For section 271, the following section shall be substituted, namely:"271. A
company may, on a petition under section 272, be wound up by the Tribunal,
(a) if the company has, by special resolution, resolved that the company be wound
up by the Tribunal;
(b) if the company has acted against the interests of the sovereignty and integrity of
India, the security of the State, friendly relations with foreign States, public
order, decency or morality;
on an application made by the Registrar or any other person authorised by the
(c) ifCentral Government by notification under this Act, the Tribunal is of the
opinion that the affairs of the company have been conducted in a fraudulent
manner or the company was formed for fraudulent and unlawful purpose or the
have been
persons concerned in the formation or management of its affairs
therewith and that it is
guilty of fraud, misfeasance or misconduct in connection
proper that the company be wound up;
the Registrar its financial
(d) if the company has made a default in filing withpreceding
statements or annual returns for immediately five consecutive
financial years; or
that the company
(e) if the Tribunal is of the opinion that it is just and equitable
should be wound up.".
substituted, namely: "272. (1)
12. For section 272, the following section shallto be
the Tribunal for the winding up of a
Subject to the provisions of this section, a petition
company shall be presented by
(a) the company;
(b) any contributory or contributories; clauses (a) and (b);
in
(c) all or any of the persons specified
(d) the Registrar;
Central Government in that behalf; or
(e) any person authorised by the section 271, by the Central Government or a
in a case falling under clause (b) of
State Government.
winding up of a
Contributory shall be entitled to present a petition for the
(2)A paid-up shares, or that the
notwithstanding that he may be the holder of fully
company,
 Insolvency and Bankruptcy Code
442
all or may have no
2016
assets at
after the satisfaction of its surplus assets
no
company may have
among the sharcholders
contributory or some of
them were lat iabilities, and \eft for
either
which he is a
been held by him, and
registered in his name, for
commencement of least sIX
originally allotyares nistrt
months immedietely before the
former holder. the windingmontuphs during retpect
death of a or
him through the
Registrar shall be entitled to present petition for
a have
(3) The

previous wisanct
tnhdating
grounds specifiedin clause (a) or clause (e) of
271, excepton the obtain the p
Provided that the Registrar shall umier
Governmentto the presentation of a
petition:
Provided further that the Central Government shall not accord
ion sub-ection
of
he
ext

company has been given a

reasOnable opportunity of f
making its
s anction CetA
affairs suchrebefore
prformesenttahteions, unles th
for
(4) Apetition presented by the company of ; winding up
admitted only if accompanied by a statement in
as may be prescribed.
(5) Acopy ofthe petition made
under this
section shall
Tribunsauclh shal
and n e
submit his views to the Tribunal within sixty days
also be
of receipt of
such fled
T Yatinex
13. In section 275,
(a) for sub-section (2), the following sub-section shall be
petitiootn.her" provsions,
2) The provisional liquidator or the
Company Lisuqbsuidtiattuoter,d,asnamel
shall be appointed by the Tribunal from amongst the y
the case
registered under the Insolvency and Bankruptcy Code,
(b) sub-section (4) shall be omitted. insolv";ency profes ionTmaa%y
2016:
14. For section 280, the following section shall be
substituted,
Tribunal shall, notwithstanding anything contained in any
force, have jurisdiction to entertain, or dispose of,
(a) any suit or proceeding by or against the company;
other law for
the
time namely:-"280.
The
being in
(b) any claim made by or against the company,
of its branches in India; including claims by or aganst any
(c) any application made under section 233:
(d) any question of priorities or any
other
facts, including those relating to assets,question whatsoever, whether of law g
privileges, benefits, duties, responsibilities,business, actions, rights, entitlements
out of, or in relation to winding up of theobligations or in any mater anstig
proceeding has been instituted, or is instituted,company, whether such sut r
or such claim or question bs
ar1sen or arises or such application has been made or is
has been submitted, or is submitted. before or made or such schemt
of the company is made.". after the order for the windmg
15. Section 289 shall be
omitted.
15A.. The heading "Part
16. Sections 304 to 323 II.Voluntary
shall be omitted.
winding up' shall be omitted.
17. Section 325 shall be
18. For section 326, the omitted.
"326. (1) In thefollowing
section shall be substituted, namely:- followg
the
winding up of a company under this Act,.
debts shall be paid in priority to all other debts:
(a) workmen's dues:;
and
Chap.
14 Insolvency and Bankruptcy Code 2016 443

where asecured creditor has realiscd a secured asset, so much of the debts due
1o such sccured creditor as could not be realised by him or the amount of the
workmen's portion in his security (if payable under the law), whichever is less,
pari passu with the workmen's dues:
Provided that in case of the winding up of a company, the sums referred to in sub
clauses()) and(ii) of clause (b) of the Explanation, which are payable for aperiod of two
years preceding the winding up order or such other period as may be prescribed, shall be
in priority to all other debts (including debts due to secured creditors), within a
iod of thirty days of sale of assets and shall be subject tosuch charge over the security
df sccured creditors as may be prescribed.
(2) The debts payable under the proviso to sub-section (1) shall be paid in full before
N Daymcnt is made to secured creditors and thereafter debts payable under that
gab section shall be paid in full,unless the assets are insufficient to meet them, in which
case they shallabate inequal proportions.
Explanation-For the purposes of this section, and scction 327
(a) "workmen", in relation to a company, means the employees of the company,
being workmen within the meaning of clause (s) of section 2 of the Industrial
Disputes Act, 1947 (14of 1947);
(6) "workmen's dues", in relation to a company, means the aggregate of the
following sums due from the company to its workmen, namely:
(i) all wages or salary including wages payable for time or piece work and
salary carned wholly or in part by way of commission of any workman in
respect of servicesrendered to the company and any compensation payable
to any workman under any of the provisions of the Industrial Disputes Act,
1947(14 of 1947);
(ii) all accrued holiday remuneration becoming payable to any workman or, in
the case of his death, to any other person in his right on the termination of
his employment before or by the effect of the winding up order or
resolution;
(in) unless the company is being wound up voluntarily merely for the purposes
of reconstruction or amalgamation with another company or unless the
company has, at the commencement of the winding up, under such a
Workmen's
contract with insurers as is mentioned in section 14 of the
transferred to
compensation Act, 1923 (19 of 1923), rights capable of being compensation
and vested in the workmen, all amount due in respect of any
respect of the death or
or liability for compensation under the said Act in
disablement of any workman of the company; fund, the
the provident fund, the pensionmaintained
(iv) all sums due to any workman from welfare of the workmen,
gratuity fund or any other fund for the
by the company; creditor of a
"workmen's portion"", in relation to the security of any secured
security the same
(c) bears to the value of the
company, means the amount which workmen's dues bears to the aggregate of the
proportion as the amount of the debts due to the secured
the amount of the
amount of workmen's dues and
creditors.
1,00,000. The
Illustration
security of a secured creditor of a company is Rs. debts due from
The value of the workmen's dues is Rs. 1,00,000. The amount of the
ofthe
total amnount
 Insolvencyyand Bankruptcy Code 2016
444 3,00.000
secured creditors is Rs. The
workmen's
the companydues its theamount of debts due to secured creditors is
to and
workmen's portion of the security is,therefore. one-fourth of the val aggregate of
25,000."
that is Rs.
19,In section 327,- following sub-section
(a) atersub-section (6),the 327shall shall be
7) Sections 326and not be
under theInsolvency and| Bankruptcy Code, 2016."; in the applicable inserted.
(c), the
(8) in the Eqplanation, for clause
namely: fol owing clause shall be
Yc) the expression "relevant date" meansin the
up by the Tribunal, the date of
appointment or ficompany
provisional liquidator, or if no such rst
sbsit
case of a
appointm ent
winding up order, unless, in either case,
Code, 2016:". under the
20. For section 329,the following section shall be
was
wound up voluntarily before that date the company hadmade, the
date sf ap oI
Insolvency and
ntrne t
transfer of property, movable or immovable, or any
company, not being a transfer or delivery made in
favour of a purchaser or encumbrancer in good faiththe sordiubsdelnarytiitvuerteyd, ofnamelgoods,y: BarikrS
made within a period of one year before the and for course of its
the Tribunal under this Act shall be
void
presentation
21. For section 334,the following against the
of a valuable
Company Liquidator."consideration.
petition for f busines or
section shall be
"334. In the case of a
property including actionablewinding
in the company or claims,
up by the
of the
alteration in the status company
substituted,namely:
Tribunal, disposition
and
any
any transfer
commencement
void.".
of the winding up of its
shall, unless the members, made aftofeshrares
22. In section 336, in Tribunal otherwise orders, thbee
"whether by the Tribunal or sub-section or(1) , in the opening
by the Tribunal or which voluntarily, which is paragraph, for the worts
words by the Tribunal subsequent ly passes a subsequently ordered to be wound u
bythe Tribunal under Act or whichresolution
under this Act"this is
for voluntary
witonding up", te
23. In section 337, shall be
for the words substituted.
subsequent ly ordered be wound up
voluntary winding up", the words "or which
24. In section
342, under this Act', subsequent
shall be ly passes a resolution tor
25. In section sub-sections (2). (5) and (4) shall substituted.
namely 343, for be omitted.
"(1) The
sub-section(1), the following sub-section shall bbe substituted.
company Company
is being Liquidator with the sanction off the Tribunal, when the
) pay any wound up by the may,
(ii) make anyclass of creditors inTribunal,
full:
be
credi to compr
rs, or omise oror arrangement with creditors or personssclaiming to
future,be certain orhaving alleging themselves to have anyclaim, present or
may contingent
rendered liable: or , against the company, or
wherebythe company
(i)
comprtinogmiinse aanydebt,callandoranyliabiclaim,
resul lity topresent
call, ordebt,
future,andcertliability
ain orcontingent capableof
Chap.14 Insolvency and Bankruptcy Code 2016 445

ascertained or sounding only in damages, subsisting or alleged to subsist

between the company and a contributory or alleged contributory or other
debtor or person apprehending liability to the company, and all questions in
any way relating to or affecting the assets or liabilities or the winding up of
the company, on such terms as may be agreed, and take any security for the
discharge of any such call, debt, liability or claim, and give a complete
discharge in respect thereof.".
26 In section 347, for sub-section (i),the following sub-section shall be substituted,
namely
) When the affairs of acompany have been completely wound up and it is
about to be dissolved, the books and papers of such company and those of the
Company Liquidator may be disposed of in such manner as the Tribunal directs.".
27. In section 348, for sub-section (1), the following sub-section shall be substituted,
namely its
"(1)If the winding up of a company is not concluded within one year after doing,
commencement, the Company Liquidator shall, unless he is exempted from so
months of the expiry
either wholly or in part by the Central Government, within twO intervals of not more
concluded, at
of such year and thereafter until the winding up is
any, as may be prescribed, file a
than one year or at such shorter intervals, if
as may be prescribed, duly
statement in such form containing such particulars company, with respect to the
of the
audited, by a person qualified to act as auditor
with the Tribunal:
proceedings in, and position of, the liquidation, this sub-section shall be necessary
Provided that no such audit as is referred to in
apply;".
where the provisions of section 294
section shallbe substituted, namely:
28. For section 357, the following shall be
winding up of a company by the Tribunal under this Act winding
"357. The the presentation of the petition
for the
commence at the time of
deemed to
up." proviso, after the words "obtained for the winding up the
29. In section 370, in the Insolvency
accordance with the provisions of this Act or of the
company", the words in
2016" shall be inserted. this Act", the words "or of
the
and Bankruptcy Code, "The provisions of
the words inserted.
30. In section 372, afterCode, 2016, as the case may be," shall be
Insolvency and Bankruptcy following sub-section shallbe substituted,
sub-section (4),the
31. In section 419, for establish such number of
notification,
namely: Central Government shall, by necessary, to exercise the jurisdiction,
"(4) The
Tribunal, as it may consider conferred on such Tribunal by or
benches of the Adjudicating Authority
powers and authority
ofthe
and Bankruptcy Code, 2016.".
Insolvency
under Part II of the Act", the words
provisions ofthisinserted;
32.In section 424, words, "other be
sub-section (1), after theBankruptcy Code, 2016"shallwords "or under the
() in Insolvencyand the
"'or of the under this Act",
sub-section (2),after the words, 2016" shall be inserted. substituted.
(ii) in and
BankruptcyCode,
following sub-section shallbe
Insolvency
for
sub-section(1), the
429,
33. In section
namely:
 Insolvency and Bankruptey Code 2016
446
proceedings for
) The Tribunal may, in any winding
proceedings under the Insolvency and up of a
orderAct
this to take anycustody
or ininto
Cuap:
Bankruptey CoCode,mpanN nder
or under itscontrol all property, books of
Chief
documents, request, in writing, the within
Magistrate or the District Collector
Metwhoseropolitan Magistrate,
books of account or other documents of such company juriunder
sdiction Chiel Jtic
any
persons under the said Code, are situated or found. to this Act or of
take sSuch
Magistrate the cporroppaetty
pos ses ion
the Chief Metropolitan Magistrate, Chief Judicial
Collector, as the case may be, shall, on

(b) cause the same to be

such request being made or
(o) take possession of suchentrusted books of account or to him,
property,
to the Tribunal or other
her st, ) anÀ

by it.".
34. For section 434,the following section shall be
other perSOnS
substituted,,namely:
"434. (1) On such date as may be notified by the
Central
documentsa,uthorisei and
behalf
(a) all matters, proceedings or cases pending before
Law Administration (herein in this section
(1) ofreferred
the
to as the of
Government
Board
in this

CompanCyompany
Board) constituted under sub-section
Act 1956 immediately before such date shall section 10E of the Law
Tribunal and the Tribunal shall dispose of such stand
(b)
cases in accordance with the provisions of this Act:
any person aggrieved by any decision or order
mattertsr,ansptreorceedCdominpagnsies
to the
or
made before such date may file an appeal to of the
days from the date of communication of
the Company
Law
the High Court withinBoard
Company Law Board to him on any
order: question ofdecision
law order ofSIKthtye
Or

Provided that the High Court may if it is arising out of such

prevented by sufficient cause from satisfied that the
allow it to be filed within afurther fling an appeal within theappelsaidlant was
period not sixty days; andperiod,
Act, exceeding
(c) all proceedings under the
proceedings relating to Companies 1956 (1 of 1956),
reconstruction and winding arbitration,
up of compromise, inchudiandng
arrangements
such date before any companies, pending
the Tribunal and the District Court or High Court, shall immediately betore
stand
may proceed to deal with transfered to
from the stage before Tribunal such
their proceedings
Provided that only such transfer:
companies shall be transferred toproceedings
the relating to the winding up ot
prescribed by the Central Government. Tribunal that are at a stage as may b:
"Providedupfurther that any party or parties to any
the winding of companies
pending proceedings relating to
commencement of the Insolvency andbefore any Court immediately before th e
OrdiCourt
the nance, 2018, may file an application for Bankruptcyof proceedingsand
Code (Amendment)
may by order transfer such Tribunal andthe
so transfer such
proceedings oftransferred shall be dealt with by the Tribunal
proceedings to the
for initiation as an application
and corporate insolvency resolution process under the Insolvengy
Bankrupt
(2) The Centralcy Code, 2016.".
this Act to ensure Government may make rules consistent with the provisionsof
the Company timely transfer of all pendingbefore
Law Board or the courts, tomatters, proceedings or cases
the Tribunal under this section."
Chap.35.14In section 468, forInsolvency and Bankruptcy Code 2016 447
sub-section (2), the following sub-section shall be substituted,
namely: 2) In particular, and without prejudice to the generality of the foregoing
Dower, such rules may provide for all or any of the following matters, namely
() as to the mode of proceedings to be held for winding up of a
the Tribunal under this Act: company
(i) for the holding of meetings of creditors and members in connection with
proceedings under section 230;
(in) for giving effect to the provisions of this Act as to the reduction of
the
capital;
applications to be made to the Tribunal under the
(i) generally forrthisallAct:
provisions of
of creditors
(v) the holding and conducting of meetings to ascertain the wishes
and contributories;
of
the settling of lists of contributories and the rectifying of the register
(vi) assets;
members where required, and colvciing and applying the money,
payment, delivery, conveyance, surrender or transfer of
(vii) the the liquidator;
property, books or papers to
calls; and
(vii) the making of within which debts and claims shall be proved.".
(ir) the fixing of a time shall
in section III, for clause (b), the following clause
II,
36. In Schedule V, in Part
be substituted, namely:
the
"(6) where the company
incorporated company, for a period of seven years from
() is a newly
date of its incorporation, or scheme of revival or rehabilitation has
for whom a Reconstruction
(ii) is a sick company, Board for Industrial and Financial
been ordered by the the date of sanction of scheme of
years from
for a period of five
revival, or
which a resolution plan has been approved
relation to Insolvency and
(ii) isa company in company Law Tribunal under the
by the National the date ofsuch
period of five years from
Bankruptcy Code, 2016 for a
approval, amount permissible under section
times the
remuneration up to two
It may pay
II" "THE TWELFTH SCHEDULE
29A]
[See clause (d) ofsection
the Purposes of Clause (d) of Section 29A
Acts for Regulation) Act, 1922 (22 of 1922):
Foreign Trade (Development and
() The 1934);
(2) The Reserve Bank ofIndia Act, 1934 (2 of
(3) The Central Excise Act, 1944 (l of 1944),:
(37 of 1954);
(4) The Prevention of FoodAdulteration Act, 1954
(5) The Essential Commodities Act, 1955 (10 of 1955);
(6) The Securities Contracts (Regulation) Act, 1956 (42 of 1930);
 20I6
BankrupteyCode
Insolvencyand
448 (52 of1962);
Ac,1962 Control of Pollution) Act,, 1974 (6of 1974):
Chap:
CuStoms
(8)The (Preventionand
(10) The Conservation of ForeignExchangeand
(9)TheWater
Prevention of Smuggling Activitie
1974);
Act,1974(52 of (Preventionand Controllof o Pollution) Act, 1981 (14 of 198I);
(1) TheAir Companies (Special Provisions) Act, 1985(1 of 1986);
Industrial 1986(29of1986),:
(12)TheSick (Protection)Act,
(13)TheEnvironment Benami Property Transactions Act, 1988(45 of
of
(14) The Prohibition CorruptionAct, 1988(49of1988):
198):
(15) ThePrevention of Exchange Boardlof India Act, 1992 (15 of 1992);
(16) The Securitiesand 1999 (42 of 1999):
ManagementAct,
u) The Foreign Exchange
(12 of 2003),;
(18) The Competition Act,2002 Act, 2002 (15 of 2003):
(19) The Prevention of Money-laundering
of2009):
(20) The Limited Liability Partnership Act, 2008 (6
(21) The Foreign Contribution (Regulation) Act, 2010 (42 of 2010):
(22) The Companies Act, 2013 (18 of 2013) or any previous company law:
(23) The Black Money (Undisclosed Foreign Income and. Assets) and
Tax Act, 2015 (22 of2015); Imposition of
(24) The Insolvency and Bankruptcy Code, 2016 (31 of 2016),:
(25) The Central Goods and Services Tax Act, 2017 (12 of 2017) and respectie
State Acts imposing State goods and services tax;
(26) such other Acts as may be notified by the Central Government.
Every notification issued under this Schedule shall be laid, as soon as may be after it
is issued, before each House of Parliament.

Review Questions
1. Discuss briefly the key features of the Insolvency and
What was the need to enact the Insolvency and Bankruptcy Code, 2016.
2. What do you understand by the
Bankruptcy Code?
Discuss step by step timeline of disputecorporate insolvency resolution process?
3. Differentiate between the voluntary resolution.
4. What is the procedure of voluntary liquidationof a Companies Act and IBC.
under
5. Briefly explain the liquidation corporate body under IBC?
vis Insolvency and provisions of winding up under Companies Act, 2013 Vis-d-
6. Discuss very Bankruptey Code, 2016.
briefly the ten prominent amendments in the Insolvency and
Bankruptcy Code, 2016 in the year
1. Write short notes on 2018, 2019, 2020 and 2021.
any two of the
(a) Authorities
under the IBC following:
(6) Insolvency resolution process for
(C) Procedure of voluntary individuals/partnerships
liquidation of acorporate body under IBC