IB Code Amended to Streamline Process with Time
Lines
·
New Definitions Introduced
o
“Registered valuer” and “service provider” added.
o
Clarification that security interest must arise from an agreement (not merely by
law).
o
Definitions added for avoidance transactions and fraudulent/wrongful trading.
·
Clarity on Insolvency Initiation
o
If multiple insolvency applications are filed, the first
filing date will be treated as the initiation date.
o
Record of default from an information utility is
sufficient proof for default.
·
Time-bound Decision Making
o
Adjudicating Authority must:
§ Admit/reject
applications within 14 days (Sections 7, 9, 10).
§ Record
reasons if delays occur.
·
Withdrawal of Insolvency Applications (Section 12A)
o
Allowed only:
§ After CoC
approval (90% voting share).
§ Before
invitation of resolution plans.
o
Decision must be made within 30 days.
·
Expanded Role of Committee of Creditors (CoC)
o
CoC will now also supervise liquidation process.
o
Can attend meetings during liquidation (non-voting
members may be specified).
·
Strengthening Resolution Process
o
Resolution plans must:
§ Ensure
fair payment to dissenting financial creditors.
§ Include
implementation & supervision mechanisms.
o
CoC must record reasons for approving plans.
·
Protection of Approved Resolution Plans
o
Licenses, permits, and approvals cannot be
terminated after plan approval if conditions are met.
o
Past claims against the corporate debtor are extinguished
post approval.
·
Avoidance Transactions
o
Proceedings related to fraudulent or avoidance
transactions:
§ Will continue
independently of CIRP/liquidation.
·
New Provision for Guarantor Assets (Section 28A)
o
Assets of guarantors can be transferred during
resolution with CoC approval.
o
Sale proceeds adjusted against guarantor’s debt.
·
Interim Resolution Professional (IRP) Changes
o
Appointment streamlined:
§ Financial
creditor’s proposed IRP accepted if no disciplinary issues.
§ For
Section 10 cases, Board recommends IRP.
·
Improved Accountability & Assistance
o
Broader category of persons (not just personnel)
must assist IRP/liquidator.
o
IRP empowered to verify and value claims.
·
Liquidation Process Reforms
o
CoC may restore CIRP instead of liquidation
(one-time, max 120 days).
o
Liquidation orders must be passed within 30 days.
o
Introduction of moratorium during liquidation
in certain cases.
·
Flexibility in Resolution Plan Approval
o
Two-stage approval allowed:
§ First for
implementation, later for distribution (within 30 days).
·
Strengthened Legal Clarity
o
Clear rules on:
§ Treatment
of joint liabilities.
§ Rights of
guarantors.
§ Continuation
of proceedings post-resolution.
The Following
Act of Parliament received the assent of the President on the 6th April, 2026
and is hereby published for general information:—
THE INSOLVENCY
AND BANKRUPTCY CODE (AMENDMENT) ACT, 2026
[No. 6 of 2026
dated 6 April, 2026]
An Act further
to amend the Insolvency and Bankruptcy Code, 2016.