The report of the Joint Committee on the Insolvency and Bankruptcy Code, 2015 is presented to the Lok Sabha on 28th April, 2016 which is to be discussed during the current budget session. The code was first introduced on 21st December, 2015 in the Parliament and thereafter, the motion for reference of the Bill to a Joint Committee of both the Houses of Parliament was moved in Lok Sabha on 23rd December, 2015 by the Finance Minister.
Thereafter the Committee invited view/ suggestions from experts/representatives of Statutory/Regulatory/Government Bodies and Research Bodies/Trade Unions as well as organisations representing Industry and Professional Bodies. The observations/recommendations of the Committee with regard to principal changes made in the Bill, as decided by the Committee are mentioned in the report along with the modifications with the purpose of drafting improvement.
The reason behind the Code is to consolidate and amend the existing laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner since there is no single law in India which deals with the insolvency and bankruptcy. The existing provisions of Sick Industrial Companies (Special Provisions) Act, 1985, the Recovery of Debt Due to Banks and Financial Institutions Act, 1993, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 have failed to achieve the objectives. The Code provides easy exit opportunity to the failed businesses/ start-ups which in turn improve ease of doing business and facilitate more investments. The Code has also introduced the fast track insolvency process which needs to be completed within a period of Ninety (90) days.