This is a much-awaited amendment to the IBC. The intent of the government appears to be to provide for an alternative and efficient resolution mechanism especially for MSME’s by introduction of a new chapter in the statute. This is certainly a welcome step although it was hoped that such a framework available to non-MSME’s as well.
The framework of the chapter does not reduce the role and involvement of NCLT’s very significantly - it is hoped that given that this process can be initiated only by the companies with the consent of 66% of its unrelated financial creditors, the disputes are minimal allowing the process to run more efficiently than the normal CIRP.
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