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The corporate insolvency resolution process regulations provided under the Insolvency and Bankruptcy Code, 2016 have been amended on tuesday by the Insolvency and the Bankruptcy Board of India (IBBI). The amendment paved way for the more strict and stringent rules for process of approval of resolution plan under insolvency laws.
The government notification provided that the antecedents, credit worthiness and credibility of applicant including promoter is to be taken into account by the Committee of Creditors (CoC) prior to granting approval to the resolution plan. The amendments in the insolvency law is done to ensure that the process of approval is a credible and viable process and there is no biasness whatsoever.
The amendments has made it necessary for the applicants to see that the correct details are furnished in the plan submitted by them for approval to the CoC. Mandatory details which are to be provided are whether in the last two years the applicant has faced the disqualification, criminal proceedings, terms of convictions, debarment by SEBI or if has been declared willful defaulter by the RBI.
Other than the above mentioned information the applicant applying for approval of resolution has to also furnish the details whether the transaction for which the resolution is being submitted is covered any of the following provisions of bankruptcy law or not - Section 43 (Preferential Transactions); Section 45 (Undervalued Transactions); Section 50 (Extortionate Credit Transactions) or Section 66 (Fraudulent Transactions).