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I{ew Delhi, the 6thJune,20l8/Jysistha 16, 1940 (Saka)
NoW THEREToRE, in exercise of the powers confered by clause (1) of aticle 123 of the Constitution, the President is pleased to promulgate the foilowing Ordinance :-
433
434 B*flrTa{rqrd, ftnis 18W 2ol8
Short title and 1. (1) This Ordinance may be called the insoivency and Bankruptcy Code commencement. (Amendment)Ordinance,20l8.
(2) It shall come into force at once.
Amendmenr of 2" In the Insolvency and Bankruptcy Code, 2016 (hereinafter refened to as 3l of 2016. section 3' the principai Act), in section 3, in clause (/2), for the word "repaid", the word
"paid" shall be substituted.
Amendment of 3" In section 5 of the principal Act,-
section 5.
(i) after clause (5), the following clause shall be inserted, namely:-
'(51) "corporate guarantor" means a corporate person who is the
surety in a contract ofguarantee to a corporate debtor;';
(ii) in ciause (8), in sub-clause (/), the followingExplanatiora shall be
inserted, namely:-
'Explanation - For the purposes ofthis sub-clause,-
(,) any amount raised from an allottee under a real estate
project shall be deemed to be an amount having the commercial
effect of a bonowing; and
o'real
(rf) the expressions, "allottee" and
estate project" shall have the meanings respectively assigned to them in clauses (d) and (zz) of section 2 of the Real Estate (Regulation
and Development) Act, 2a16'; " 16o12016' (ilf) in clause (21), for the word "repayment", the word "payment"
shall be substituted;
(rv) after clause (24), the following clause shall be inserted,
namely:-
'(24A) "related party", in relation to an individual, means*
(a) a person who is a relative of the individual or a relative
of the spouse of the individual;
,
(b) a partner of a limited liability partnership, or a limited liability partnership or a partnership firm, in which the individual is a partner;
(c) a person who is a trustee of a trust in which the beneficiary of the trust includes the individual, or the terms of the trust confers a power on the trustee which may be exercised for the benefit of the individual;
(fl a private company in whichthe individual is a director and holds along with his relatives, more than two per cent. of its share capital;
434 (r) Bdqrcttq{d, ftqis lsq{ 2ol8(e) a public company in which the individual is a director and holds along with relatives, more than two per cent. of its
paid-up share capital;
(/) a body corporate whose board of directors, managing
director or manager, 1n the ordinary course of business, acts on
the advice, directions or instructions of the individual;
(g) a limited liability partnership or a partrrership frnn whose partners or employees in the ordinary course of business,
act on the advice, directions or instructions of the individual;
(/r) a person on whose advice, directions or instructions,
the individual is accustomed to act;
(i) a company, where the individual or the individual along with its related parly, own more than fifty per cent. of the
share capital of the company or conffols the appointment of the
board of directors of the company.
Explanation.-For the puposes of this clause,-
(a) "relative", with reference to any person, means anyone who is related to another, in the following manner, namely:-
(f) members of a Hindu Undivided Family,
(ii) husband,
(ili) wife,
(iv) father,
(v) mother,
(vi) son,
(vii) daughter,
(viii) son's daughter and son,
(rx) daughter's daughter and son,
(x) grandson's daughter and son,
(xi) granddaughter's daughter and son,
(xii) brother,
(xiii) sister,
(xiv) brother's son and daughter,
(rv) sister's son and daughter,
434 (21 uekrc{rqr{, frms l8qr 2or8
(xvi) father's father and mother,
(rvii) mother's father and mother,
(rvlii) father's brother and sister,
(rlx) mother's brother and sister; and
(b) wherever the relation is that of a son, daughter, sister
or brother, their spouses shall also be included;'.
Amendment of
section 7.
4. In section 7 of the principal Acl in sub.section (1), for the words "other financial creditors", the words "other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the central Govemment," shall be substituted.
Amendment of
5. In section 8 of the principal Act,-
section 8.
(a) in sub-section (2),-
any,
(i) in clause (a), for the words "if any, and", the words ,'if
or" shall be substituted;
(li) in clause (b), for the word "repayment", the word "payment"
shall be substituted;
(6) in the Explanation, for the word "repayment", the word
"payment" shall be substituted.
Amendrnent of
6. In section 9 of the principal Ac!-
section 9.
(a) in sub-section (3),-
(i) in clause (c), forthe words "by the corporate debtor; and", the
words "by the corporate debtor, if available;" shall be substituted;
(ir) for clause (d), the following clauses shall be substituted,
namely:-
"(d1 a copy of any record with information utility confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available; and
(e) any other proof confirming that there is no payment of an unpaid operational debt by the corporate debtor or such other information, as may be prescribed.";
(b) in sub-section (5),-
(l) in clause (i), in sub-clause (b), for the word "repayment", the
word "paymenf' shall be substituted;
(B) in clause (fi), in sub-clause (b), for the word "repayment",
the word "payment" shali be substituted.
434 (3) Bffi€rra{tw;{, ftt{irn r8q{ zolsAmendment of 7. ln section 10 of the principal Act, -
section 10.
(a) for sub-section (3), the following sub-section shall be substituted,
namely:-
"(3) The corporate applicant shall, along with the application,
fumish-
(a) the information relating to its books of account and
such other documents for such period as may be specified;
(b) the information relating to the resolution professional
proposed to be appointed as an interim resolulion professionai;
and
(c) the special resolution passed by shareholders of the
corporate debtor or the resolution passed by at least thnee-fourth of the total number of partners of the corporate debtor, as the case may be, approving filing of the application.";
(b) in sub-section (4),-
(i) in clause (a), after the words "if it is complete", the words "and no disciplinary proceeding is pending against the proposed resolution professional" shali be inserted;
(ii) in clause (b), after the words "if it is incomplete", the words "or any disciplinary proceeding is pending against the proposed resolution professional" shall be inserted.
Amendment of 8. In section 12 of the principal Act, in sub-section (2), for the word
section I 2.
"seventy-five", the word "sixty-six" shall be substituted.
9. After section 12 of the principal Act, the following section shall be Insertion ofnew section l2A.
inserted, namely:-
Withdrawal of
application
admitted under
section 7. 9 or I 0.
"12A. The Adjudicating Authority may allow the withdrawal of application admitted under section 7 or section 9 or section 10, on an applicaiion made by the applicant with the approval of ninety per cent. voting share of the committee of creditors, in such manner as may be
prescribed.".
10. In section 14 of the principal Act, for sub-section (3), the following Amendment oi section 14.
sub-section sha1l be substituted, namely:-
"(3) The provisions ofsub-section (1) shall not apply to-
(a) such transaction as may be notified by the Central
Government in consultation with any financial regulator;
(b) a surety in a contract ofguarantee to a corporate debtor.".
Amendment of
section I 5.
11.In section 15 ofthe principal Act, in sub-section (1), in clause (c). for the word "c1aims", the words "claims, aS may be specified" shall be substituted.
434 (4)
g-dqrr€ rts.[d, fr{is' 18 qn 2o1s
Amendment of
section 16.
12. In section 16 of the principal Act, in sub-section (5), for the words "shall not exceed thirty days from date of his appointmenf', the wolds and figures "shall continue till the date of appointment of the resolution professional under section 22" shall be substituted.
Amendment of
13. In section 17 of the principal Act, in sub-section (2),-
section 17.
(i) in clause (d), for the words "may be specified.", the words "may
be specified; and" shall be substituted;
(il) after clause (rd), the following clause shall be inserted, namely:-
"(e) be responsible for complying with the requirements under
any law for the time being in force on behalf of the corporate debtor.".
14. In section 18 of the principal Acl infiie Explanation,forthe word "sub-
Amendment of section I 8.
section", the word "section" shall be substituted.
Amendment of
15. In section 21 of the principal Act,-
section 21.
(i) in sub-section (2),-
(a) in the proviso, for the words "related party to whom a corporate debtor owes a hnancial debt", the words "financial creditor or the authorised representative of the financial creditor referred to in sub-section (6) or sub-section(6A) or sub-section (5) of section 24, tf itis a related party of the corporate debtor," shall be
substituted;
(b) after the proviso, the following proviso shall be inserted,
namely:-
"Provided further that the first proviso shall not apply to a financial creditor, regulated by a financial sector regulator, if it is a related party ofthe corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible into equity shares, prior to the
insolvency commencement date.";
(ii) in sub-section (3), for the word "Where", the words, brackets and figures and letter "Subject to sub-sections (6) and (6,4), where" shall be
substituted;
(r,D in sub-section (6), inthe opening portion, the words "or issued as
securities" shall be omitted;
(ru) after sub-section (6), the following sub-sections shall be inserted,
namely:-
"(6,4) Where a financial debt-
(a) is in the lorm of securities or deposits and the terms of the financial debt provide for appointment of a trustee or agent to act as authorised representative for all the financial creditors,
434 (s) 66lqrTa{rq[d, frnis l8\T{ 20t8such trustee or agent shall act on behalf of such financiai
creditors;
(b) is owed to a class of creditors exceeding the number as
may be specified, other than the creditors covered under clause (rz) or sub-section (6), the inlerim resolution professional shall make an application to the Adjudicating Authority along with the list of all financial creditors, containing the name of an rnsoivency professional, other than the interim resolution professional, to act as their authorised representative who shall be appointed by the Adjudicating Authority prior to the first meeting of the committee of creditors;
(c) is represented by a guardian, executor or administrator. such person shall act as authorised representative on behalf of
such financial creditors,
and such authorised representative under clause (a) or clause (b) or clause (c) shall attend the meetings of the committee of creditors, and vote on behalf of each financial creditor to the extent of his voting
share.
(68) The remuneration payable to the authorised
representative-
(i) rlnder ciauses (a) and (c) of sub-section(6A), if any, shall be as per the terms of the financial debt or the relevant
documentation; and
(li) under clause (b) ofsub-section (61) shall be as specified
which shall be jointly bome by the financial creditors.";
(v) for sub-sections (7) and (8), the foilowing sub-sections shall be
substituted, namely:-
"(7) The Board may specify the manner of voting and the detcrmining of the voting share in respect of financial debts covered under sub-sections (d) and(64).
(8) Save as otherwise provided in this Code, all decisions of the committee of creditors shall be taken by a vote of not less than fifty-one per cent. ofvoting share ofthe financial creditors:
Provided that where a corporate debtor does not have any financial creditors, the committee of creditors shall be constituted and shall comprise ofsuch persons to exercise such functions in such
manner as may be sPecified,".
Amendment of 16. In section 22 of the principal Act,-
section 22.
(a) in sub-section (2), for the word, "seventy-five", the word "sixty-
six" shall be substituted;
434 {6) eoaterrgtt"f'T{, tTis l8q{ 2ol8(b) in sub-section (3),-
(i) in clause (a), after the words "resolution professional", the words "subject to a written consent from the interim resolution professional in the specif,red form" shall be inserted;
(ii) in clause (b), after the words "appointment of the proposed resolution professional", the rvords "along with a written consent from the proposed resolution professional in the specified form"
shall be inserted.
Amendment of
17. In section 23 of the principal Act, in sub-section (1), the foilowing
scction 23.
proviso shail be inserted, namely:-
"Providedthat the resolution professional shall, ifthe resolution plan
under sub-section (6) of section 30 has been submitted, continue to manage the operations of the corporate debtor after the expiry of the corporate insolvency resolution process period until an order is passed by the Adjudicating Authority under section 31.".
Amendment of
18. In section 24 of the principal Act. -
section 24.
(l) in sub-section (3), in clause (a), for the words "Committee of creditors", the words, brackets, figures and letter "committee of creditors, including the authorised representatives referred to in sub-sections (6) and (61) of section 21 and sub-section (5)" shall be substituted;
(ll) in sub-section (5), for the words "Any creditor", the words, brackets, figures and letters "subject to sub-sections (O, @A) and (68) of section 27, any creditor" shall be substituted.
Insertion ofnew
19. After section 25 of the principal Act, the following section shall be
section 25A.
inserted, namely:-
Rights and duties
ofauthorised representative of
financial
creditors.
'25A.(-1) The authorised representative under sub-section (6) or sub- section (6A) of section 21 or sub-section (5) ofsection 24 shall have the right to participate and vote in meetings of the committee of creditors on behalf of the financial creditor he represents in accordance with the prior voting instructions of such creditors obtained through physical or
electronic means.
(2) It shall be the duty ofthe authorised representative to circulate the agenda and minutes of the meeting of the committee of creditors to the financial creditor he represents.
(3) The authorised representative shall not act against the interest of the financial creditor he represents and shall always act in accordance with their prior instructions :
Provided that if the authorised representative represents several hnancial creditors, then he shall cast his vote in respect of each financiai creditor in accordance with instructions received from each financial creditor, to the extent ofhis voting share:
434 (7) erde.Tqirwqd, frqim t8q{ zol8Provided further that if any financial creditor does not give prior instructions th,rough physical or electronic rreans, the authorised representative shall abstain from voting on behalfofsuch creditor.
(a) The authorised representative shall file with the committee of creditors any instructions received by way of physical or electronic means, from the financial creditor he represents, for voting in accordance therewith, to ensure that the appropriate voting instructions of the financial creditor he represents is conectly recorded by the interim resolution professional or resolution professional, as the case may be.
Explanation.-For the purposes of this section, the "electronic
means" shall be such as may be specified.'.
Amendment of 20. In section 27 of the principal Act, for sub-section (2), the following
section 27 sub-section shall be substituted, namely:-
"(2) The committee of creditors may, at a meeting, by a vote of sixty- six per cent. ofvoting shares, resolve to replace the resolution professional appointed under section 22with another resolution professional, subject to a written consent from the proposed resolution professional in the specified form.".
Amendment of 21. In section 28 of the principal Act, in sub-section (3), for the word,
section 28.
"seventy-five", the word "sixty-six" shall be substituted.
Amendment of 22. In section 29A of the principal Act,-
section 29A.
(i) in clause (c),-
(A) for the words "has an account,", the words "at the time of submission of the resolution plan has an account," shall be substituted;
(B) after the words and figures "the Banking Regulation Act, 1949", the words "or the guideiines of a financial sector regulator issued under any other law for the time being in force," shall be inserted;
(O after the proviso, the following shall be inserted, namely:-
'Provided fi.rther that nothing in this clause shall apply to
a resolution applicant where such applicant is a financial entity
and is not a related party to the corporate debtor.
Explanation I.-For the purposes of this proviso, the expression "related party" shall not include a financial entity, regulated by a financial sector regulator, if it is a financial creditor of the corporate debtor and is a related parfy of the corporate debtor solely on account ofconversion or substitution of debt into equity shares or instruments convertible into equity shares, prior to the insolvency commencement date.
Explanation II.- For the purposes of this clause, where a resoiution applicant has an account, or an account ofa corporate
434 (s) Bdqrcrrwrd, frqis lgq{ 2ots
debtor under the management or control of such person or of whom such person is a promoter, classified as non-performing asset and such account was acquired pursuant to a prior resolution plan approved under this Code, then, the provisions ofthis clause shall not apply to such resolution applicant for a period of tkee years from the date of approval of such resolulion plan by the Adjudicating Authority under this Code,";
(ii) for clause (d;, the follorving clause shall be substituted, namely:-
"(d) has been convicted for any offence punishable with
imprisonment-
(i) for two years or more under any Act specified under the
Twelfth Schedule; or
(ii) for seven years or more under any other law for the time
being in force:
Provided that this clause shall not apply to a person after the expiry of a period of two years from the date of his release from imprisonment:
Provided further that this clause shall not apply in relation to a
connected person referred to in clause (iii) of Explanationl;";
(fii) in clause (e), the following proviso shall be inserted, namely:-
"Provided that this clause shall not apply in relation to a
connected person referred to in clause (iii) of Explanationl;";
(iv) in clause (g), the following proviso shall be inserted,
namely:-
"Provided that this clause shall not apply if a preferential transaction, undervalued transaction, ercortionate credit transaction or fraudulent transaction has taken place prior to the acquisition of the corporate debtor by the resolution applicant pursuant to a resolution plan approved under this Code or pursuant to a scheme or plan approved by a financial sector regulator or a court, and such resolution applicant has not otherwise contributed to the preferential transaction, undervalued
transaction, extortionate credit transaction or fraudulent
transaction;";
(v) in clause (ft),-
(l) for the words "an enforceable guarantee", the words "a
guarantee" shall be substituted;
434 (e) Bffitff're{lclr{, frcis l8q{ zol8(B) after the words "under this Code", the words "and such
guarantee has been invoked by the credltor and remains unpald in full or part" shall be inserted;
(vi) in clause (i), for the words "has been", the word "is" shall be
substituted;
(vii) the Explanation occuning after clause (7) shall be numbered as Explanationl, and in Explanation I as so numbered, for the proviso, the foliowing provisos shali be substituted, namely:-
'Provided that nothing in clause (fil) of Explanation I shall apply to a resolution applicant where such applicant is a financial entity and is not a related party ofthe corporate debtor:
Provided further that the expression "related party" shall not
include a financial entity, regulated by a financial sector regulator, if it is a financial creditor of the corporate debtor and is a related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible
into equity shares, prior to the insolvency commencement date;';
(viii) after Explanation I as so numbered, the fbllowing
Explanation shall be inserted, nameiy:-
'Explanation II.-For the purposes of this section, "financial entity" shall mean the following entities which meet such criteria or conditions as the Central Govemment may, in consultation with the financial sector regulator, notifu in this behalf, namely:-
(a) a scheduled bank;
(b) any entity regulated by a foreign central bank or a securities market regulator or other financial sector regulator of a jurisdiction outside India which jurisdiction is compliant with the Financial Action Task Force Standards and is a signatory to the Intemational Organisation of Securities Commissions Multilateral
Memorandum of Understanding;
(c) any investment vehicle, registered foreign institutional investor, registered foreign portfolio investor or a foreign venture capital investor, where the terms shall have the meaning assigned to them in regulation 2 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 201'7 made under the Foreign Exchange Management Act,
42 of 1999.
1999;
(d) an asset reconstruction company registered with the Reserve Bank of India under section 3 of the
434 (10) sd€rc{rqrd, ftqis l8q{ 2018
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act,2002; 54 or2002'
(e) an Alternate Investment Fund registered with the
Securities and Exchange Board of India;
(fl such categories of persons as may be notified by
the Central Govemment.".
Amendmenr of 23. In section 30 of the principal Act,-
section 30-
(i) in sub-section (1), after the words "resolution plan", the words, figures and letter "along with an affidavit stating that he is eligible under
section 29A" shall be inserted;
(il) in sub-section (2),-
(l) in clauses (a) and (6), for the word "repayment" at both the
places where it occurs, the word "payment" shall be substituted;
(B) after clause (fl, the following Explanation shall be inserted,
namely:-
"Explanation - For the purposes of clause (e), if any
approval of shareholders is required under the Companies Act,
2013 or any other law for the time being in force for the l8or20l3' implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law."'
(iif) in sub-section (4),-
(a) for the word "seventy-five", the word "sixty-six" shall be
substituted;
(b) after the third proviso, the following proviso shall be
inserted, namely:-
"Provided also that the eligibility criteria in section 29A as amended by the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 shall apply to the resolution applicant who has not submitted resolution plan as on the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 20 1 8.".
Amendment ol 24.In section 3i of the principal Act,-
section 3 I .
(a) in sub-section (1), the following proviso shall be inserted,
namely:-
"Provided that the Adjudicating Authority sha1l, before passing an order for approval of resolution plan under this sub-section,
Btrftar"rdrcrr{a, fu{is l8Eq 2ols 434 (11)satisfl, that the resolution plan has provisions for its effective implementation.";
(D) after sub-section (3), the following sub-section shali be inserted,
namely:-
"(4) The resolution applicant shall, pursuant to the resolution plan approved under sub-section (l), obtain the necessary approval required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under sub-section (l) or within suchperiod as provided for in such law, whichever is iater.".
Amendment of
section 33.
25. In section 33 of the principal Act, in sub-section (2), after the words "decision of the committee of creditors", the words "approved by not less than sixty-six per cenl. ofthe voting share" shall be inserted.
Amendment of 26.In section 34 of the principal Act, _-
section 34.
(a) in sub-section (1), for the words and letter "Chapter II shall", the words and letter "Chapter II shall, subject to submission of a written consent by the resolution professional to the Adjudicatory Authority in specified form," shall be substituted;
(D) in sub-section (4),-
(i) in clause (b), for the words "in writing.", the words "in
writing; or" shall be substituted;
(li) after clause (D), the following clause shall be inserted,
namely:-
"(c) the resolution professional fails to submit written
consent under sub-section (1).";
(c) in sub-section (5), for the word, brackets and letter "clause (a)",
the words, brackets and letters "clauses (a) and (c)" shall be substituted;
(d) in sub-section (6), after the words "another insolvency
professional", the words "along with written consent from the insolvency
professional in the specified form," shall be inserted.
Amendment of 27. In section 42 of the principal Act, after the words "of the liquldator",
section 42 the words "accepting or" shall be inserted.
Amendment of 28. In section 45 of the principai Act, in sub-section (1), the words and
section 45.
figures "of section 43" shall be omitted.
Amendment of
section 60.
29. In section 60 of the principal Act, -
(a) in sub-section (2), for the words "bankruptcy of a personal guarantor of such corporate debtor", the words "liquidation or bankruptcy
434 \12) 6d{rc{rqqr, fu{is l8 Gf{ zols
ofa corporate guarantor or personal guarantor, as the case may be, ofsuch
corporate debtor" shali be substituted;
(b) in sub-section (3), for the words "bankruptcy proceeding of a personai guarantor of the corporate debtor", the words "liquidation or bankruptcy proceeding of a corporate guarantor or personal guarantor, as
the case may be, of the corporate debtor" shall be substituted.
Amendment of
30. In section 69 of the principal Act, for the words "On or after the
section 69.
insolvency commencement date, il', the word "If' shall be substituted.
Amendmenl of
31. In section 76 of the principal Act,-
section 76.
(a) in the marginal heading, for the word "repayment", the word
"payment" shall be substituted;
(b) in clause (a), for the word "repayment", the word "payment" shail
be substituted.
32. In section 196 of the principal Act, in sub-section (1),-
Amendment of section 196.
(i) after clause (a), the following clause shal1 be insertedpamely:-
"(aa) promote the development of, and regulate, the working and practices of, insolvency professionals, insolvency professional agencies and information utilities and other institutions, in furtherance
of the pwposes of this Code;";
(ll) in clause (c), for the words "for the registration", the words "for carrying out the puryoses of this Code, including fee for registration and
renewal" shall be substituted.
Amendment of
section 231.
33. In section 231 of the principal Act, for the words "Adjudicating Authority" at both the places where they occur, the words "Adjudicating
Authority or the Board" shall be substituted.
lnsertion of new
34. After section 238 of the principal Act, the following section shall be
section 238A.
inserted, namely:_*
36 of 1963.
Limitation.
"238A. The provisions of the Limitation Act, 1963 shall, as far as may be, apply to the proceedings or appeals before the Adjudicating Authorily, the National Company Law Appellate Tribunal, the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal, as the case
may be.".
Amendment of
35. In section 239 of the principal Act, in sub-section (2),-
section 239.
(i) after clause (e), the following ciause shall be inserted, namely:-
"(ea) other proof confirming that there is no payment of an unpaid operational debt by the corporate debtor or such other information under clause (e) of sub-section (3) of section 9;";
434 (13) Bdertrrq..rd, ftqis r8q{ 2ol8(ii) after clause (f), the foliowing clause shall be inserted, namely:-
"(fa) the manner of withdrawal of application under section
12A;".
Amendment oi 36. In section 240 of the principal Act, in sub-section (2),-
section 240.
(i) clause (g) shall be omitted;
(ii) after clause (7), the following clause shall be inserted, namely:-
"Qa)the last date for submission of claims under clause (c) of
sub-section (/) ofsection i5,";
(iii) afler clause (r), the following clauses shall be inserted,
namely:-
"(na) the number of creditors within a class of creditors under
clause (b)of sub-section(6A) of section 21;
(rb) the remuneration payable to authorised representative under
clause (ii) ofthe proviso to sub-section (68) ofsection 21;
(nc) the manner of voting and determining the voting share in
respect of financial debts under sub-section ( 7) of section 2 1 ;".
37. After section 240 of the principal Act, the following section shall be Insertionornew
section 24oA' inserted, namely:-
'240A.(1) Notrvithstanding anything to the contrary contained in this Application of
,r, Code, the provisions of clauses (c) and (fo) of sectio n 29A shall not apply tli:,::.d|:', to the resolution applicant in respect of corporate insolvency resolution ;;h; - process of any micro, small and medium enterprises. enterprises.
(2) Subject to sub-section (1), the Central Government may, in the public interest, by notification, direct that any of the provisions of this Code shall*
(a) not apply to micro, small and medium enterprises; or
(b) apply to micro, small and medium enterprises, with such
modifications as may be specified in the notification.
(3) A draft of every notification proposed to be issued under sub- section (2), shall be laid before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one
session or in two or more successive sessions.
(4) ifboth Houses agree in disapproving the issue ofnotification or both Houses agree in making any modification in the notification, the notification shall not be issued or shall be issued only in such modified form as may be agreed upon by both the Houses, as the case may be.
434 (t4) Bdsrrq{rqqd, ftqi6 lsqr 2ors
(5) The period ofthirty days referred to in sub-section (3) shall not include any period during which the House referred to in sub-section (4) is prorogued or adjoumed for more than four consecutive days.
(6) Every notification issued under this section shall be laid, as soon
as may be after it is issued, before each House of Parliament.
Explanatian.- For the purposes of this section, the expression "micro, small and medium enterprises" means any class or classes of enterprises ciassified as such under sub-section (l) of section 7 of the Micro, Small and Medium Enterprises Development Act, 2006.'. 2? of 2006' lnsertion of new 38. After the Eleventh Schedule to the principal Act, the following Schcdule Schedule shall be inserted, namely:-
..THE TWELFTH SCI{EDLILE (See ciause (d) of section 29A)
ACTS FORTHE PURPOSES OF CLAUSE (d) OF SECTION 29A
(1) The Foreign Trade (Deveiopment and Regulation) Act, 1922 {22
of1922);
(2) The Reserve Bank of India Act, 1934 (2 of 1934);
(3) The Central Excise Act, 1944 (1 of 1944);
(a) The Prevention of Food Adulteration Act, 1954 (37 of 1954);
(5) The Essential Commodities Act, 1955 (10 of 1955);
(6) The Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(7) The Income-tax Act, 1961 (43 of 1961);
(8) The Customs Act" 1962 (52 of 1962);
(9) The Water (Prevention and Control of Pollution) Act, i974 (6 of
r97a);
(10) The Conservation of Foreign Exchange and Prevention of
Smuggling Activities Act" 1974 (52 of 1o7$;
(11) The Air (Prevention and Control of Pollution) Act, 1981 (14 of
1981);
(12) The Sick industrial Companies (Special Provisions) Act, 1985 (1
of 1986);
(13) The Environment (Protection) Act, 1986 (29 of 1986);
(14) The Prohibition of Benami Property Transactions Act, 1988 (45
of I 988);
(15) The Prevention of Corruption Act, 1988 (49 of 1988);
434 (1s) Edt.{rrd{rqq{, frqis lB q{ 2018(16) The Securities and Exchange Board of India Act,1992 (15 of
t992);
(17) The Foreign Exchange Management Act, 1999 (42 of i999);
(18) The Competition Act,2002 (12 of 2003);
(i9) The Prevention of Money-laundering Act, 2002 (15 of 2003);
(20) The Limited Liability Partnership Act, 2008 (6 of 2009);
(21) The Foreign Contribution (Regulation) Act, 2Ol0 (42of 2010);
(22) The Companies Act, 2013 (18 of 2013) or any previous company
law;
(23) The Black Money (Undisclosed Foreign Income and Assets) and
Imposition of Tax Act,2015 (22 of 2015)',
(24) The Insolvency and Banlruptcy Code, zArc Ql of 2016);
(25) The Central Goods and Services Tax Act, 2017 (12 of 2017) and
respective State Acts imposing State goods and services tax;
(26) such other Acts as may be notified by the Central Government.".
Ambndment of section 434 0f Act l8 0f2013.
39. In section 434 of the Companies Act, 2013, [as substituted by paragraph 34 of the Eleventh Schedule to the Insolvency and Bankruptcy Code, 2016], in sub-section (1), in clause (c), after the proviso, the following proviso shall be inserted, namely:-
3l of2016
"Provided fi.rrther that &rly par ry ur p.r uE) ru .nry pruutrtruruBs rerarruB to the winding up of companies pending before any Court immediateiy before the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance,2018, may file an application for transfer of such proceedings and the Court may by order transfer such proceedings to the Tribunal and the proceedings so Eansferred shall be dealt with by the Tribunal as an application for initiation ofcorporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016-:.
RAM NATH KOVIND, Preside nt.
DR. G. NARAYANA RAJU, Secretary to the Govt. of India.
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