1 Extent
The IBC now extends to the whole of India including Jammu and Kashmir (18.03.2020) wherein earlier Part III of the Code did not extend its scope in J&K.
2 Threshold
The Threshold for defaulting companies u/s 4. of the IBC (31 0f 2016) has been raised, with immediate effect, to ₹1 crore from ₹1 lakh. Earlier, creditors had the right to file a case under IBC if a company defaulted on payment of ₹1 lakh or above, now this limit has been raised to ₹1 crore (MCA Notification issued on 28.03.2020).
The government made another amendment under IBC introducing a minimum threshold of 100 or 10% of the homebuyers, whichever is lower, to take a defaulting developer to the National Company Law Tribunal (NCLT). This amendment will impact the rights of homebuyers, who are considered as financial creditors under IBC, who can approach NCLT only by way of a joint-application, in line with the Companies Act.
Also Read: Legal Remedies for Homebuyers
3 Ring Fencing Protection to New Bidders
The Insolvency and Bankruptcy Code (Amendment) Bill, 2020 was passed in both the houses in March 2020 which helped ring-fence successful bidders of insolvent companies from risk of criminal proceedings for offences committed by previous promoters. It aims to provide protection to new owners of a loan defaulter company against prosecution for misdeeds of previous owners.
4 Affordable Housing
Central Government hereby notifies a debt raised from the Special Window for Affordable and Middle-Income Housing Investment Fund I which shall mean the fund sponsored by the Central Government for providing priority debt financing for stalled housing projects, as an alternate investment fund to provide financing for the completion of stalled housing projects that are in the affordable and middle-income housing sector (Notification issued on 18.03.2020).
5 Assets possessed by Financial Services Companies
According to a Notification issued by the MCA on 30.01.2020, where the financial service provider has, as on the insolvency commencement date, in its custody or possession assets owned by its customers under a contract, the Administrator shall prepare a statement of such assets, should be identified contract-wise and to be returned or transferred to the person entitled to receive it in accordance with the terms and conditions of such contract.
Also Read: IBC Ordinance 2020 – Suspension of CIRP for 6 Months
