Changes will explain who qualifies as a secure creditor, one of the two people mentioned on the condition of anonymity. The security of creditors have a lien or a legal entitlement to bankruptcy assets. The claims from the secure creditor will receive priority before the demands of other creditors, such as material suppliers.
“The draft Act on the Amendment to the Insolvency and Bankercist (IBC) is likely to be submitted at a monsoon meeting of parliament. The cabinet note is now completed. One area is the classification of central and state tax authorities,” the person said.
While IBC has been adopted to create the most effective framework in which each factor is balanced to achieve the primary objective of the rapid debt solution, politicians believe that some judicial decisions are not aimed at achieving this goal.
Rainbow
In 2020, the Supreme Court ruled on the “State Tax Officer vs. Rainbow Papers LTD” that the Gujarat tax authorities are secured only by the creditor by operating the status. The Ministry of Business Affairs subsequently sought the public feedback on the proposal to clarify that state agencies, whether central or state, can only be a secured creditor if they enter a transaction with the transfer of the debtor, funds, etc., and not only by operating the law.
The proposed bill is likely to clarify this matter on the basis of the public feedback and opinions received from consultations within the government, the person said. The status of state agencies that provide land for real estate development projects will also be explained.
“After a long waiting, the effectiveness of operation, clarity, consistency and reliability in IBC is to bring much need,” said ANOOP RAWAT, partner (insolvency and bankruptcy) in the law firm of Sharardul AMARCHAND MANGALDAS & CO.
“The uncertainties of the superiority of IBC over tax laws should also be removed with clear provisions on the sanctity of the section 53 with regard to government fees,” Rawat said. Section 53 IBC outlines an order in which revenue from the bankruptcy of the debtor’s bankruptcy, a model called The Claims Waterfall, is distributed.
Property
Changes are also likely to include some measures to streamline the debt solution of real estate developers.
“The list of real estate and construction represents a third of corporate bankruptcies, the second largest after the manufacturing sector, under the insolvency and bankruptcy laws. Institute for improving bankruptcy solutions.
In the next decision of last February, the Apex court ruled that the Greater Noida Industrial Development Office, as an operating creditor, has the same rights over the assets of the real estate developer as other secure creditors. This meant that government agencies that rented land for housing projects must be considered secure creditors. However, the priority of the payment of fees outlined in IBC is included in the government fees in the fees of secured creditors together with unsecured creditors.
Cci in the picture
In the latter case, the Top Court in January, decided most of the 2: 1 that the plans to deal with debts concerning mergers and acquisitions must be approved by the Indian Commission for Competition (CCI) before accepting them for permission.
The court rejected Hindustan National Glass and Industries LTD debt, a leader in glass packaging, because CCI clearance was not obtained when creditors approved the rescue of the company. Politics creators believe that in some cases the authorization of the previous CCI nod could in some cases be a longer time horizon for creditors to approval the rescue of desperate societies. CCI has now moved the top court to review, the first person said.
Haldia said that real estate projects are carried out through several narrowly interconnected companies and in the interest of optimal results, a uniform approach to solving assets and group liabilities, potentially maximize value and streamline the solution process. During the process of solving the company insolvency solution, implementation of ongoing projects should gain the highest priority, Haldia said.
The Rawat of Sharardul AMARCHAND MANGALDAS said that the key changes are expected to introduce a frame -led creditor led by a creditor who allows faster and more efficient resolution.
(Tagstotranslate) bankruptcy
