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The President Ram Nath Kovind has given his assent to the Insolvency and Bankruptcy Code (Second Amendment) Act 2018.
Post the Presidential nod, the law has been notified on August 17 and has come into effect from June 6, when the second insolvency ordinance was promulgated, official sources said.
This new law replaces the June 6 insolvency ordinance, which among other things provided relief to home buyers and promoters of MSMEs.
It may be recalled that the Lok Sabha had on July 31 given its nod for the Insolvency and Bankruptcy Code (Second Amendment) Bill 2018. The Rajya Sabha had given its nod to this Bill on August 10 through a voice vote.
Besides treating home buyers as 'financial creditors' and thereby having a say in 'Committee of Creditors' decisions, the new law also allows promoters of MSMEs to bid for their companies during insolvency process.
Through the new law, the Government has lowered the voting threshold for various decisions of the committee of creditors to 66 per cent for important decisions and 51 per cent for routine decisions. Prior to this change, the voting threshold for all CoC decisions was pegged at 75 per cent.
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