NEW DELHI: The Insolvency & Bankruptcy Board of India (IBBI) is expected to finalise crucial amendments to regulations – from those seeking to make life simpler for home buyers to those for personal and companies’ insolvency proceedings, insolvency professionals and liquidation – next month as it seeks to improve the seven-year-old regime and improve its overall functioning.
The move comes amid indications that the government may not introduce the much-discussed amendments to the Insolvency & Bankruptcy Code (IBC) as well as the Companies Act in the forthcoming winter session of Parliament and limit the finance ministry’s legislative agenda to the supplementary demand for grants, sources familiar with the legislative exercise told TOI.
Draft regulations on the issues have been circulated and public comments on some of the proposed changes in the rules have been received, while the consultation process for some others is still underway.
While the changes in regulations regarding corporate insolvency are more procedural, in case of real estate, the amendments are meant to usher in several changes that will benefit home buyers the most. The agency dealing with insolvency and bankruptcy has sought to draw upon some of the recommendations of the expert committee under Amitabh Kant, India’s Sherpa to G20, which also had the IBBI chairman Ravi Mittal as a member.
The most critical among them is the push for registering property in cases where insolvency proceedings are underway. Besides, the proposal involves a plan to allow resolution professionals to break up a company into projects and seek bids – an exercise meant to make the process more attractive for both home buyers as well as resolution applicants, who may want only a share of the pie.
Separately, in case of the appointment of resolution professionals, IBBI has proposed changes that seek to deal with the issue of insolvency of personal guarantors, an issue that is taking centerstage following the recent Supreme Court order, paving the way for action against several high profile businessmen – from Anil Ambani to Venugopal Dhoot and the Ruias of Essar – whose companies went bankrupt.
The process of liquidation, too, is proposed to be made smoother by removing certain difficulties. Currently, the number of companies that are facing liquidation is much higher than the number of cases resolved under IBC.
Source: The Times of India