76 steps taken to ensure wealth creators treated with respect, says Sitharaman

Union Finance Minister Nirmala Sitharaman on Friday said that the government has taken 76 steps to remove 65 sections of criminalities in Companies Act so as to ensure our commitment that wealth creators of this country-Big, Small and large companies will be treated with respect instead of a suspect.

Speaking at the inaugural session of National Company Law Appellate Tribunal (NCLAT)'s Judicial sensitization on Insolvency law and associated best practices, Sitharaman said: "We have taken 76 steps to remove 65 sections of criminalities in companies act. It morally discouraged people from even doing something good. Now, we are removing these criminalities to ensure our commitment that wealth creators of this country-Big, Small and large companies will be treated with respect instead of a suspect. They would be trusted. I am confident that the amendments in the Insolvency and Bankruptcy Code will pass from the Parliament after consideration."

While expressing confidence that Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019 will be passed from the parliament after consideration, Sitharaman elaborated about the amendments: "In spite of it being just three years old, we have made various amendments in this law to ensure a robust implementation of laws which meet the demands of the changing times and helping the industries to grow and succeed. Nobody even from the Opposition objected to amendments because they understood that it is a particular kind of legislation that needs to address the challenges of changing times."

"India made a very big difference in passing the Insolvency and Bankruptcy Code three years ago. We brought amendments as there was a call from industries to tightening the loose in the financial system. We will ensure that companies will get the full benefit of amendments made in Insolvency and Bankruptcy Code. This should be part of associated best practices," she added.

Speaking upon the importance of such decisions she said: "Jet Airways is a case where cross border resolutions are happening and we have to be conscious that time-bound decision making is important. I was very impressed when (NCLAT Chairman) Justice Mukhopadhaya told me that India today probably takes the least possible time in resolving such issues. I am so happy that we could reach this situation with a robust law."

In December last year, the Union Cabinet had approved a proposal to promulgate an ordinance to amend the Insolvency and Bankruptcy Code (IBC) 2016.

The amendments will remove certain ambiguities in the IBC 2016 and ensure smooth implementation of the code, an official statement said. Under the amendments, the liability of a corporate debtor for an offense committed before the corporate insolvency resolution process will cease.

The amendments are aimed at providing more protection to bidders participating in the recovery proceedings and in turn boosting investor confidence in the country's financial system.