Monsoon session: Rajya Sabha passes amendment in Insolvency and Bankruptcy Code

New Delhi, Sep 19: The Rajya Sabha on Saturday passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020, whereby fresh insolvency proceedings will not be initiated for at least six months starting from March 25 amid the coronavirus pandemic.

Replying to a debate on the Bill in the House, Finance Minister Nirmala Sitharaman said the intention of the IBC is to keep companies a "going concern" and not liquidate them.

The Bill mandates that a default on repayments from March 25, the day when a nationwide lockdown began to curb the spread of coronavirus, would not be considered for initiating insolvency proceedings for at least six months.

The bill seeks to replace an ordinance promulgated in this regard in June.

Initiating the discussion, Vivek Tankha of Congress questioned several provisions of the Bill urging that these must be relooked for the interest of the public.

"Some of the provisions will benefit the big companies and prove to be detrimental for the small companies including MSMEs," he said. Dinesh Trivedi of TMC said that legislation must not be brought in hurry without larger consultation.

Amar Patnaik of BJD said that the quality of the resolution has to be improved. Ravi Prakash Verma of Samajwadi Party said that NPA is continuously rising in the country and the number of willful defaulters has also increased.