IBC (Amendment) Bill 2025 was introduced as the implementation of IBC faces critical challenges.
- These include protracted delays at insolvency admission stage, delays impacting the finality of resolution plans, erosion of asset values and absence of clear frameworks to manage complex modern corporate structures like cross-border insolvency issues.
Key Features of Amendment Bill
- Introduction of a “Creditor Initiated Insolvency Resolution Process (CIIRP)” featuring an out-of-court initiation mechanism specifically targeted at resolving cases of genuine business failures.
- Introduces two crucial frameworks –
- Group Insolvency Framework to resolve insolvencies involving complex corporate group structures.
- Cross-Border Insolvency Framework to for addressing situations where debtors or assets are located in multiple jurisdictions.
Key Recommendations of the Committee
- Clean Slate Principle: Codify clean slate (extinguishment of all prior claims) providing protection to successful resolution applicant against past claims.
- Avoid conflict of interest: Resolution Professional (RP) who conducted insolvency resolution process for corporate debtor shall be ineligible to be appointed as the Liquidator if process fails.
- Timeline: A specific statutory timeline of 3 months to be prescribed for National Company Law Appellate Tribunal (NCLAT).
- Corporate Debtor: Clarify the term “corporate debtor” to include any person incorporated with limited liability outside India to ensure cross-border provisions legally apply to foreign company with assets, creditors, or operations connected to India.