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MINISTRY OF LAW AND JUSTICE

(Legislative Department)

I{ew Delhi, the 6thJune,20l8/Jysistha 16, 1940 (Saka)

THE INSOTYENCY AND BANKRUPTCY CODE (AMENDMENT)

ORDINANCE, 2OI8

No. 6 or 2018

Promulgated by the President in the Sixty-ninth Year of the Republic of

lndia.

An Ordinance further to amend the lnsolvency and Bankruptcy Code, 2016"

WHEREAS the Insolvency and Bankruptcy Code, 2016 (the Code), inter alia,

provides for insolvency resolution of corporate persons in a time bound manner for

maximisation of value of assets of such persons;

AND WHEREaS a need has been felt, inter alia, to balance the interests of

various stakeholders in the Code, especially interests of home buyers and micro, small

and medium enterprises, promoting resolution over liquidation of corporate debtor by

lowering the voting threshold of committee of creditors and streamlining provisions

relating to eligibility of resolution applicants;

AND WHEREaS Parliament is not in session and the President is satisfied that

circumstances exist which render it necessary for him to take immediate action;

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

(rf) the expressions, "allottee" and ^o'realestate 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;

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;

Bdqrcttq{d, ftqis lsq{ 2ol8

434 ^(r)

(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

Amendment of

section 7.

Amendment of

section 8.

Amendrnent of

section 9.

(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;'.

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.

5. In section 8 of the principal Act,-

(a) in sub-section (2),-

(i) in clause (a), for the words "if any, and", the words ^,'ifany,

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.

6. In section 9 of the principal Ac!-

(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.

Bffi€rra{tw;{, ftt{irn r8q{ zols

434 ⁽³⁾

7. ln section 10 of the principal Act, -

(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

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.

8. In section 12 of the principal Act, in sub-section (2), for the word

"seventy-five", the word "sixty-six" shall be substituted.

9. After section 12 of the principal Act, the following section shall be

inserted, namely:-

"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

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.".

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.}

Amendment of

section 10.

Amendment of

section ^I2.

Insertion ofnew

section l2A.

Withdrawal of

application

admitted under

section 7. 9 or I 0.

Amendment oi

section 14.

Amendment of

section I 5.

434 ⁽⁴⁾

g-dqrr€ rts.[d, fr{is' 18 qn 2o1s

Amendment of

section 16.

Amendment of

section 17.

Amendment of

section I 8.

Amendment of

section 21.

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.

13. In section 17 of the principal Act, in sub-section (2),-

(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-

section", the word "section" shall be substituted.

15. In section 21 of the principal Act,-

(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 ^termsof

the financial debt ^provide^for^{appointment of}^a^trustee^or^agent^to

act as authorised representative ^{for all}^{the financial}^creditors,

66lqrTa{rq[d, frnis l8\T{ 20t8

434 ^(s)

such 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;

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 ^jointlybome 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^functionsⁱⁿ^such

manner as may be sPecified,".

16. In section 22 of ^the^principal^Act,-

(a) in sub-section (2), for ^the^{word, "seventy-five",}^the^word^"sixty-

six" shall be substituted;

Amendment of

section 22.

434 {6)

eoaterrgtt"f'T{, tTis l8q{ 2ol8

Amendment of

scction 23.

Amendment of

section 24.

Insertion ofnew

section 25A.

Rights and duties

ofauthorised

representative of

financial

creditors.

(b) in sub-section (3),-

(i) in clause (a), after the words ^"resolutionprofessional", 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^"alongwith ^a^written^consent

from the proposed resolution ^professionalin ^the^specified^form"

shall be inserted.

17. In section 23 of the ^{principal Act,}in ^{sub-section (1),}^{the foilowing}

proviso shail be inserted, namely:-

"Providedthat the resolution ^professionalshall, 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.".

18. In section 24 of the ^{principal Act.}-

(l) in sub-section (3), in clause ^(a),for the words "Committee of

creditors", the words, brackets, figures and letter ^"committeeof ^creditors,

including the authorised representatives ^referredto 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.

19. After section 25 of the ^{principal Act, the}^following^{section shall}^be

inserted, namely:-

'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^representsⁱⁿ^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}^actⁱⁿ^accordance^with

their prior instructions ^:

Provided that if the ^{authorised representative represents}^several

hnancial creditors, ^{then he}^shall^cast^his^voteⁱⁿ^respect^of^each^financiai

creditor in accordance ^with^instructions^received^from^{each financial}

creditor, to the extent ^ofhis^voting^share:

erde.Tqirwqd, frqim t8q{ zol8

434 ⁽⁷⁾

Provided 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.'.

20. In section 27 of the principal Act, for sub-section (2), the following

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.".

21. In section 28 of the principal Act, in sub-section (3), for the word,

"seventy-five", the word "sixty-six" shall be substituted.

22. In section 29A of the principal Act,-

(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

Amendment of

section 27

Amendment of

section 28.

Amendment of

section 29A.

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;

Bffitff're{lclr{, frcis l8q{ zol8

434 ^(e)

(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 ^jurisdictionoutside 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;

institutional investor, registered foreign ^portfolio^investor

or a foreign venture capital investor, where the ^{terms shall}

have the meaning assigned to them in regulation ²of ^the

Foreign Exchange Management ^(Transferor ^Issue^of

Security by a Person Resident ^Outside^India)^Regulations,

201'7 made under the Foreign Exchange ^Management^Act,

1999;

(d) an asset reconstruction company registered ^with

the Reserve Bank of India under ^section³^of^the

42 of 1999.

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 ^"alongwith 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^planunder 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.".

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.

26.In section 34 of the principal Act, ^_-

(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).";

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.

27. In section 42 of the principal Act, after the words "of the liquldator",

the words "accepting or" shall be inserted.

28. In section 45 of the principai Act, in sub-section (1), the words and

figures "of section 43" shall be omitted.

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

Amendment of

section 33.

Amendment of

section 34.

Amendment of

section 42

Amendment of

section 45.

Amendment of

section 60.

434 \12)

6d{rc{rqqr, fu{is l8 Gf{ zols

Amendment of

section 69.

Amendmenl of

section 76.

Amendment of

section 196.

Amendment of

section 231.

lnsertion of new

section 238A.

Limitation.

Amendment of

section 239.

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.

30. In section 69 of the principal Act, for the words "On or after the

insolvency commencement date, il', the word "If' shall be substituted.

31. In section 76 of the principal Act,-

(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),-

(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.

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.

34. After section 238 of the principal Act, the following section shall be

inserted, namely:_*

"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.".

35. In section 239 of the ^{principal Act,}in ^sub-section^(2),-

(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;";

36 of 1963.

Bdertrrq..rd, ftqis r8q{ 2ol8

434 ⁽¹³⁾

(ii) after clause (f), the foliowing clause shall be inserted, namely:-

"(fa) the manner of withdrawal of application under section

12A;".

36. In section 240 of the principal Act, in sub-section (2),-

(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:-

Amendment oi

section 240.

"(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}

inserted, namely:-

section 24oA'

'240A.(1) Notrvithstanding anything to the contrary contained in this ^Applicationof

Code, the provisions of clauses (c) and ^(fo)of sectio n 29A shall not apply ^{tli:,::.d|:',}

,r,

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 ⁽⁵²of 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 ⁽⁴⁹of 1988);

Edt.{rrd{rqq{, frqis lB q{ 2018

434 ^(1s)

(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.".

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:-

"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.

Ambndment of

section 434 0f

Act l8 0f2013.

3l of2016

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