The Bill amends the Insolvency and Bankruptcy Code (IBC), 2016. The bankruptcy code lays down provision for resolving insolvencies.
- Resolution applicant has been defined in code as a person who submits a resolution plan after receiving an invite by the insolvency professional to do so.
- It states that insolvency professional is allowed to invite only those resolution applicants to submit a plan, who fulfil certain criteria laid down by him with approval of committee of creditors and other conditions which may be specified by Insolvency and Bankruptcy Board.
- The bill prohibits certain people from submitting a resolution plan (specifying details of restructuring a defaulter’s debt). These persons include: (i) wilful defaulters, (ii) disqualified directors, (iii) promoters or management of the defaulting company, and; (iv) any person who has committed these activities abroad.
- The bill prohibits sale of property of a defaulter to such persons who is ineligible to be a resolution applicant during liquidation.
- The bill penalizes contravention of any provisions of IBC, for which no penalty has been specified, with fine ranging between Rs. 1 lakh to Rs. 2 crore.