The Insolvency and Bankruptcy Code was enacted by the Parliament in 2016 as a welcome step to the existing framework dealing with insolvency of corporates, individuals, partnerships and other entities. The code is market-determined and provide for time-bound insolvency resolution process.
Following the same, the Insolvency and Bankruptcy Board of India (“IBBI”) has been looking ahead to implement the current framework for insolvency process in relation to two categories of people i.e. guarantors to corporate debtors and the individuals having business such as partnership, start up etc. In the lieu of the same, a working group is to be constituted by IBBI which would be submitting the separate report dealing with insolvency resolution process of firms and individuals. The cases related to the insolvency of individuals go to the Debt Recovery Tribunal.
Hence, the IBBI has sought public view on drafting norms for insolvency resolution process for individuals and firms. The comments can be submitted to the IBBI till October 31, 2017. The reason given by IBBI chairperson MS Sahoo is to bring into the operation the respect of guarantors to the corporates and the individuals running business.
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