Govt launches bill in Lok Sabha to amend insolvency law

27 Jul 2021 CW Team

The centre has launched a bill in the Lok Sabha to amend insolvency law and establish a pre-packaged resolution process for stressed MSMEs.

The proposed amendments would allow the government to set a default threshold of Rs 1 crore as the starting point for the pre-packaged resolution process. The government has already set a limit of Rs 10 lakh for this purpose.

The Insolvency and Bankruptcy Code (Amendment) Bill, 2021, introduced by Corporate and Finance Minister Nirmala Sitharaman, will replace the ordinance that was issued on April 4 to help MSMEs affected by the pandemic.

The bill, which was introduced in the Lower House amid a barrage of criticism from the Opposition over a variety of issues, seeks to add a new chapter to the Code to facilitate pre-packaged insolvency resolution for corporate entities that are Micro, Small, and Medium Enterprises (MSMEs).

In a pre-packaged process, major stakeholders such as creditors and shareholders work together to find a potential buyer and negotiate a resolution plan before going to the National Company Law Tribunal (NCLT). NCLT must approve all resolution plans under the IBC.

There would be a penalty for initiating a pre-packaged insolvency resolution process fraudulently or maliciously with the intent to defraud others, as well as for fraudulent management of the corporate debtor during the process.

Offences relating to the pre-packaged insolvency resolution process would also be punished.

Furthermore, the government had halted the filing of new corporate insolvency resolution applications for defaults that occurred between March 25, 2020, and 24th March 2021.

The Code has also been amended in the past to address emerging market realities.

In 2016, the Code was passed to consolidate and amend the laws governing corporate reorganisation and insolvency resolution for corporations, partnerships, and individuals.

Image Source

Also read: NCLT admits insolvency plea against McNally Sayaji

The centre has launched a bill in the Lok Sabha to amend insolvency law and establish a pre-packaged resolution process for stressed MSMEs. The proposed amendments would allow the government to set a default threshold of Rs 1 crore as the starting point for the pre-packaged resolution process. The government has already set a limit of Rs 10 lakh for this purpose. The Insolvency and Bankruptcy Code (Amendment) Bill, 2021, introduced by Corporate and Finance Minister Nirmala Sitharaman, will replace the ordinance that was issued on April 4 to help MSMEs affected by the pandemic. The bill, which was introduced in the Lower House amid a barrage of criticism from the Opposition over a variety of issues, seeks to add a new chapter to the Code to facilitate pre-packaged insolvency resolution for corporate entities that are Micro, Small, and Medium Enterprises (MSMEs). In a pre-packaged process, major stakeholders such as creditors and shareholders work together to find a potential buyer and negotiate a resolution plan before going to the National Company Law Tribunal (NCLT). NCLT must approve all resolution plans under the IBC. There would be a penalty for initiating a pre-packaged insolvency resolution process fraudulently or maliciously with the intent to defraud others, as well as for fraudulent management of the corporate debtor during the process. Offences relating to the pre-packaged insolvency resolution process would also be punished. Furthermore, the government had halted the filing of new corporate insolvency resolution applications for defaults that occurred between March 25, 2020, and 24th March 2021. The Code has also been amended in the past to address emerging market realities. In 2016, the Code was passed to consolidate and amend the laws governing corporate reorganisation and insolvency resolution for corporations, partnerships, and individuals. Image Source Also read: NCLT admits insolvency plea against McNally Sayaji

Equipment

12 Dec 2025

Schwing Stetter India Unveils New Innovations at Excon 2025

Schwing Stetter India unveiled more than 20 new machines at Excon 2025, marking one of its most significant showcases and introducing several India-first technologies to the construction equipment sector. The company launched the country’s first 56-metre boom pump designed and manufactured in India, the first fully electric truck mixer, the first CNG mixer variant and the first hybrid boom pump. Executives said the launch portfolio was engineered to support India’s move toward faster, greener and more vertically oriented infrastructure through advanced engineering, clean-energy solutions a..

Infrastructure Energy

12 Dec 2025

SEPC Resolves Hindustan Copper Dispute, Wins Rs 725 Mn Order

Engineering, procurement and construction firm SEPC Ltd has recently settled a dispute with Hindustan Copper Ltd (HCL) and secured a mining infrastructure order valued at Rs 725 million from the state-owned company. SEPC informed the stock exchanges that it has executed a settlement deed with HCL, bringing closure to all inter-se claims and counterclaims arising from arbitration proceedings. As part of the settlement, SEPC will receive Rs 304.5 million as full and final payment, marking the resolution of all pending disputes between the two entities. The company also stated that Hindustan Co..

Infrastructure Energy

12 Dec 2025

20% Ethanol Blending Cuts India’s CO2 Emissions by 73.6 Mn Tonnes

Union Road Transport and Highways Minister Nitin Gadkari recently said that India has reduced carbon dioxide emissions by 73.6 million metric tonnes due to the adoption of 20 per cent ethanol blending in petrol. He made the statement while replying to supplementary questions during the Question Hour in the Lok Sabha. Describing ethanol as a green fuel, the minister said it plays a key role in reducing pollution while also supporting higher incomes for farmers. He underlined that ethanol blending contributes both to environmental sustainability and rural economic growth. Nitin Gadkari also po..