tinzd ro Jto Vo7o 77)04/0007/2003-_18

58 · %T # fT7Tr3 TO & & & fRTA f 4 3TaT raal7 % 7y 4 7u M1 74 | Separate paging is given to this Part in order that it may be filed as a separate compilation:

1 · (1) This Act may be called the Insolvency and Bankruptcy Code (Second Short title and Amendment) Act, 2018. commencement:

31 · of 2016_

3 · In section 5 of the principal Act, after clause (5), the following clause shall be inserted, namely: '(SA) corporate guarantor' means corporate person who is the surety in a contract of guarantee to corporate debtor;" (ii) in clause (8), in sub-clause (f), the following Explanation shall be inserted, namely: 'Explanation.--For the purposes of this sub-clause, any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expressions, allottee' and "real estate project shall have the meanings respectively assigned to them in clauses d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act; 2016;' 16 of 2016_ (iii) in clause (12), the following proviso shall be inserted, namely: Provided that where the interim resolution professional is not appointed in the order admitting application under section 7 , 9 or section 10, the insolvency commencement date shall be the date on which such interim resolution professional is appointed by the Adjudicating Authority;' (iv) in clause (21), for the word repayment" the word payment' shall be substituted;

5 · In section 8 of the principal Act; in sub-section (2),

10 · In section 14 of the principal Act; for sub-section (3), the following Amendment sub-section shall be substituted, namely: of section 14. (3) The provisions of sub-section shall not apply to such transaction as may be notified by the Central Government in consultation with any financial regulator; (b) a surety in a contract of guarantee to corporate debtor: 11. In section 15 of the principal Act; in sub-section (1), in clause (c), for the Amendment word "claims the words "claims, as may be specified" shall be substituted. of section 15_ 12. In section 16 of the principal Act; in sub-section (5) , for the words shall not Amendment exceed thirty days from date ofhis appointment' the words and figures "shall continue of section 16. till the date of appointment of the resolution professional under section 22" shall be substituted.

13 · In section 17 of the principal Act, in sub-section (2), Amendment of section 17. (i) in clause (d), for the words may be specified: the words may be specified; and" shall be substituted; (ii) after clause (d), the following clause shall be inserted, namely= '(e) be responsible for complying with the requirements under any law for the time being in force on behalf of the corporate debtor: 14. In section 18 of the principal Act, in the Explanation, for the word Amendment sub-section" the word "section shall be substituted. of section 18

15 · In section 21 of the principal Act; Amendment of section 21. in sub-section (2), in the proviso, for the words "related party to whom corporate debtor owes financial debt" the words, brackets, figures and letter "financial creditor Or the authorised representative of the financial creditor referred to in sub-section (6) or sub-section (6A) or sub-section (5) of section 24, if it is related party of the corporate debtor; shall be substituted; (b) after the proviso, the following proviso shall be inserted, namely: Provided further that the first proviso shall not apply to financial creditor; regulated by a financial sector regulator; if it is related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares Or instruments convertible into equity shares, prior to the insolvency commencement date_ (ii) in sub-section (3), for the word "Where the words, brackets, figures and letter Subject to sub-sections (6) and (64), where shall be substituted; (iii) in sub-section (6), in the opening portion, the words or issued as securities shall be omitted; (iv) after sub-section (6), the following sub-sections shall be inserted_ namely

18 · In section 24 of the principal Act; Amendment of section 24_ in sub-section (3), in clause (a), for the words Committee of creditors' the words, brackets, figures and letter "committee of creditors, including the authorised representatives referred to in sub-sections (6) and (6A) of section 21 and sub-section (5)' shall be substituted; (ii) in sub-section (5), for the words Any creditor the words, brackets, figures and letters "Subject to sub-sections (6), (6A) and (6B) of section 21,any creditor shall be substituted. 19. After section 25 of the principal Act, the following section shall be inserted, Insertion of namely:- new section 25A '25A_ (1) The authorised representative under sub-section (6) or Rights and sub-section (6A) of section 21 or sub-section (5) of section 24 shall have the duties of right to participate and vote in meetings of the committee of creditors on behalf authorised representative of the financial creditor he represents in accordance with the prior voting of financial instructions of such creditors obtained through physical or electronic means_ creditors_ (2) It shall be the duty of the authorised representative to circulate the agenda and minutes of the meeting of the committee of creditors to the financial creditor he represents_ (3) The authorised representative shall not act against the interest of the financial creditor he represents and shall always act in accordance with their prior instructions: Provided that if the authorised representative represents several financial creditors, then he shall cast his vote in respect of each financial creditor in accordance with instructions received from each financial creditor; to the extent of his voting share: Provided further that if any financial creditor does not give prior instructions through physical or electronic means, the authorised representative shall abstain from voting on behalf of such creditor: The authorised representative shall file with the committee of creditors any instructions received by way of physical or electronic means, from the financial creditor he represents, for voting in accordance therewith, to ensure that the appropriate voting instructions of the financial creditor he represents is correctly recorded by the interim resolution professional or resolution professional, as the case may be. Explanation. ~For the purposes of this section, the "electronic means shall be such as may be specified: '. 20. In section 27 of the principal Act; for sub-section (2), the following Amendment sub-section shall be substituted, namely: of section 27. (2) The committee of creditors may; at meeting, by vote of sixty-six per cent: of voting shares, resolve to replace the resolution professional appointed under section 22 with another resolution professional, subject to written consent from the proposed resolution professional in the specified form.

21 · In section 28 of the principal Act, in sub-section (3), for the word, Amendment 'seventy-five' the word 'sixty-six shall be substituted: of section 28_

22 · In section 29A of the principal Act; (i) in clause (c); (A) for the words has an account the words at the time of submission of the resolution plan has an account, shall be substituted; (B) after the words and figures "the Banking Regulation Act; 1949", the words "or the guidelines of a financial sector regulator issued under any other law for the time being in force, shall be inserted; (C) after the proviso, the following shall be inserted, namely: 'Provided further that nothing in this clause shall apply to resolution applicant where such applicant is a financial entity and is not related party to the corporate debtor: Explanation I._For the purposes of this proviso, the expression "related party' shall not include financial entity, regulated by financial sector regulator; if it is a financial creditor of the corporate debtor and is related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible into equity shares, prior to the insolvency commencement date. Explanation II. -For the purposes of this clause, where resolution applicant has an account, or an account of corporate debtor under the management or control of such person or of whom such person is promoter; classified as non-performing asset and such account was acquired pursuant to prior resolution plan approved under this Code, then; the provisions of this clause shall not apply to such resolution applicant for period of three years from the date of approval of such resolution plan by the Adjudicating Authority under this Code;' (ii) for clause (d), the following clause shall be substituted, namely: (d) has been convicted for any offence punishable with imprisonment for two years or more under any Act specified under the Twelfth Schedule; o (ii) for seven years or more under any other law for the time being in force: Provided that this clause shall not apply to a person after the expiry of period of two years from the date of his release from imprisonment: Provided further that this clause shall not apply in relation to a connected person referred t0 in clause (iii) of Explanation I;" (iii) in clause (e), the following proviso shall be inserted_ namely: Provided that this clause shall not apply in relation to connected person referred to in clause (iii) of Explanation I;' (iv) in clause (g), the following proviso shall be inserted, namely: Provided that this clause shall not apply if preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place prior to the acquisition of the corporate debtor by the resolution applicant pursuant to resolution plan approved under this Code Or pursuant to a scheme Or

10 · of 1949_

42 · of 1999_

54 · of 2002.

23 · In section 30 of the principal Act; (i) in sub-section (1) , after the words 'resolution plan' the words, figures and letter "along with an affidavit stating that he is eligible under section 29A shall be inserted;

26 · In section 34 of the principal Act; Amendment of section 34. in sub-section (1), for the words and figures "Chapter IL shall' the words and figures "Chapter II shall, subject to submission of a written consent by the resolution professional to the Adjudicatory Authority in specified form_ shall be substituted;

29 · In section 60 of the principal Act; Amendment of section 60. in sub-section (2), for the words 'bankruptcy of a personal guarantor of such corporate debtor' the words "liquidation or bankruptcy of a corporate guarantor Or personal guarantor; as the case may be, of such corporate debtor" shall be substituted;

32 · In section 196 of the principal Act, in sub-section (1), Amendment of section after clause (a) , the following clause shall be inserted namely: 196_ '(aa) promote the development of, and regulate, the working and practices of, insolvency professionals, insolvency professional agencies and information utilities and other institutions, in furtherance of the purposes of this Code;' (ii) in clause (c), for the words for the registration' the words 'for carrying out the purposes of this Code, including fee for registration and renewal" shall be substituted:

33 · In section 231 of the principal Act, for the words Adjudicating Authority" at both the places where they occur; the words Adjudicating Authority O the Board" shall be substituted_ 34. After section 238 of the principal Act; the following section shall be inserted, namely: "238A. The provisions of the Limitation Act, 1963 shall, as far as may be_ 36 of 1963. apply to the proceedings or appeals before the Adjudicating Authority, the National Company Law Appellate Tribunal the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal, as the case may be_ 35. In section 239 of the principal Act; in sub-section (2) , after clause (e), the following clause shall be inserted, namely: "(ea) other proof confirming that there is no payment of an unpaid operational debt by the corporate debtor or such other information under clause (e) of sub-section (3) of section 9; 36. In section 240 of the principal Act, in sub-section (2) , clause (g) shall be omitted; (ii) after clause (j), the following clause shall be inserted, namely: "(ja) the last date for submission of claims under clause (c) of sub-section (1) of section 15;' (iii) after clause (n), the following clauses shall be inserted, namely: (na) the number of creditors within class of creditors under clause (b) of sub-section (6A) of section 21; (nb) the remuneration payable to authorised representative under clause (ii) of the proviso to sub-section (6B) of section 21; (nc) the manner of voting and determining the voting share in respect of financial debts under sub-section (7) of section 21;' 37.A fter section 240 of the principal Act; the following section shall be inserted, namely: "240A. (1) Notwithstanding anything to the contrary contained in this Code, the provisions of clauses (c) and (h) of section 29A shall not apply to the resolution applicant in respect of corporate insolvency resolution process of any micro, small and medium enterprises_ (2) Subject to sub-section (1), the Central Government may, in the public interest; by notification, direct that any of the provisions of this Code shall _ not apply to micro, small and medium enterprises; O b apply to micro, small and medium enterprises, with such modifications as may be specified in the notification_ (3) A draft of every notification proposed to be issued under sub-section (2), shall be laid before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session Or in two or more successive sessions_

27 · of 2006_