IBC amendments strengthen insolvency framework, says Nirmala Sitharaman

The Lok Sabha passed the IBC amendment Bill, incorporating suggestions for improved transparency and governance. Key changes include a new Creditors’ Initiated Insolvency Resolution Process and mandatory recording of reasons by the Committee of Creditors. The amendments aim to reduce delays and enhance accountability in insolvency proceedings. Soumitra Majumdar, Partner at JSA Advocates & Solicitors, felt that minimising litigation risks is also a coveted objective of the amendments — this shouldn’t open the door for an additional line of plan-related litigations. Selection of a plan is a matter of exercise of commercial wisdom of the CoC, with very limited scope for judicial scrutiny. “Commercial wisdom certainly needs to be exercised in a reasonable and reasoned manner, but the non-justiciability of commercial determinations by the COC should not be compromised,” he said. Read more