The
Ministry of Corporate Affairs (‘MCA’), vide its Public Notice dated October 6,
2016[1] and
October 10, 2016[2]
issued the draft rules and regulations on recommendations of the working group[3] for public
comments. The last day for submitting the comments was October 28, 2016 and
October 31, 2016, respectively. On the next day itself, MCA, vide its
notification dated November 1, 2016[4] notified the third tranche of sections.
Sub-section (3) of section 1 empowers the Central Government for piecemeal
enforcement of the provisions of the Code. Prior to notifying the third tranche
of sections, MCA, has already notified two notifications dated August 5, 2016[5] and August 19,
2016[6].
Though
the draft rules and regulations seems to be at very early stage, it becomes
necessary for the Ministry to notify such sections pursuant to which the
Central Government or the Board has been empowered to make rules and
regulations, respectively.
The
notification dated August 19, 2016 notified 6 definitions under section 3. The
left over definitions have been notified by virtue of the notification dated
November 1, 2016.
Section
196 deals with powers and functions of the Board; however, the same shall be
performed by the Central Government until the Board has been duly constituted
by virtue of section 244 of the Code. In order to discharge its function
efficiently, the Board has been empowered to constitute such committee as it
may deem fit under section 197.
Chapter
VII of part IV deals with finance, accounts and audit. Section 223 deals with
accounts and audit wherein the Board is required to maintain proper accounts
and other relevant records as may be prescribed by Central Government in
consultation with the CAG. The accounts of the Board shall be audited by CAG at
such interval as may be specified.
Sections
239 and 240 empower the Central Government and the Board to make rules and regulations
for carrying out the provisions of the Code. Consequently, the relevant clauses
have been notified.
Section
244 deals with transitional provision. By virtue of this section the exercise
the powers including power to make regulations and functions of the Board or
such designated financial sector regulator shall be exercised by the Central
Government.
Sections
245 to 255 provides for amendment in the existing Acts. In the third tranche of
notification, MCA has notified 5 such sections.
Section 246 provides for amendment in the Central Excise
Act, 1944, section
248 provides for amendment in the Customs Act, 1962 and section 250
provides for amendment in the Finance Act, 1994 – Prior to the Code, any
amount due under the Central excise Act and Customs Act had first charge;
however, exception was provided to section 529A of the Act, 1956, RDDBFI Act
and SARFAESI Act. Now even the Code enters the queue. The position under the
Code is completely different. Both sections 53 and 178 do not provide priority
to amount due to the Central Government and the State Government.
Section 247 provides for amendment in the Income-tax Act,
1961 – Section 178 of the Income-tax
Act, 1961 deals with company in liquidation. The liquidator appointed shall
give notice to assessing officer who is entitled to assess the income of the
company. The Assessing Officer shall within the prescribed time limit notify
the liquidator an amount which in his opinion shall be sufficient to provide
for any tax. The provision of the Income-tax Act reads as follows:
“(6)
The provisions of this section shall have effect notwithstanding anything to
the contrary contained in any other law for the time being in force.”
Post
amendment the same shall be read as:
“(6)
The provisions of this section shall have effect notwithstanding anything to
the contrary contained in any other law for the time being in force except
the provisions of the Insolvency and Bankruptcy Code, 2016.”
With
the insertion of the expression “except the provisions” the Code gets the
overriding effect.
Section 252 provides for amendment in the Sick Industrial
Companies (Special Provisions) Repeal Act, 2003 – The SICA Repeals Act was enacted
to repeal the erstwhile SICA, 1985 and provide for transition from SICA, 1985
to the Act, 1956. Accordingly, the Companies (Second Amendment) Act, 2002 was
introduced to amend the corresponding provisions of the Companies Act, 1956.
However, both the Acts, i.e., SICA Repeals Act and the Companies (Second
Amendment) Act, 2002 were never enforced. As per the amendment provided any
appeal, reference or inquiry pending to or before the Appellate Authority shall
stand abated and a reference shall be made to the NCLT under the Code within
180 days from the commencement of the Code. Also, no fees shall be payable for
making such reference under the Code.
List
of sections notified under the Bankruptcy Code are as follows:
|
Section
No.
|
Particulars
|
Effective
Date
|
|
Section 3 (1)
|
Definition of “Board”
|
19th August, 2016
|
|
Section 3 (2)
|
Definition of “Bench”
|
1st November, 2016
|
|
Section 3 (3)
|
Definition of “Bye-laws”
|
1st November, 2016
|
|
Section 3 (4)
|
Definition of “Charge”
|
1st November, 2016
|
|
Section 3 (5)
|
Definition of “Chairperson”
|
19th August, 2016
|
|
Section 3 (6)
|
Definition of “Claim”
|
1st November, 2016
|
|
Section 3 (7)
|
Definition of “Corporate person”
|
1st November, 2016
|
|
Section 3 (8)
|
Definition of “Corporate debtor”
|
1st November, 2016
|
|
Section 3 (9)
|
Definition of “Core services”
|
1st November, 2016
|
|
Section 3 (10)
|
Definition of “creditor”
|
1st November, 2016
|
|
Section 3 (11)
|
Definition of “debt”
|
1st November, 2016
|
|
Section 3 (12)
|
Definition of “default”
|
1st November, 2016
|
|
Section 3 (13)
|
Definition of “financial
information”
|
1st November, 2016
|
|
Section 3 (14)
|
Definition of “financial
institution”
|
1st November, 2016
|
|
Section 3 (15)
|
Definition of “financial product”
|
1st November, 2016
|
|
Section 3 (16)
|
Definition of “financial service”
|
1st November, 2016
|
|
Section 3 (17)
|
Definition of “financial service
provider”
|
1st November, 2016
|
|
Section 3 (18)
|
Definition of “financial sector
regulator”
|
1st November, 2016
|
|
Section 3 (19)
|
Definition of “insolvency
professional”
|
1st November, 2016
|
|
Section 3 (20)
|
Definition of “insolvency
professional agency”
|
1st November, 2016
|
|
Section 3 (21)
|
Definition of “information
utility”
|
1st November, 2016
|
|
Section 3 (22)
|
Definition of “notification”
|
19th August, 2016
|
|
Section 3 (23)
|
Definition of “person”
|
1st November, 2016
|
|
Section 3 (24)
|
Definition of “person resident in
India”
|
1st November, 2016
|
|
Section 3 (25)
|
Definition of “person resident
outside India”
|
1st November, 2016
|
|
Section 3 (26)
|
Definition of “prescribed”
|
19th August, 2016
|
|
Section 3 (27)
|
Definition of “property”
|
1st November, 2016
|
|
Section 3 (28)
|
Definition of “regulations”
|
19th August, 2016
|
|
Section 3 (29)
|
Definition of “schedule”
|
1st November, 2016
|
|
Section 3 (30)
|
Definition of “secured creditor”
|
1st November, 2016
|
|
Section 3 (31)
|
Definition of “security interest”
|
1st November, 2016
|
|
Section 3 (32)
|
Definition of “specified”
|
1st November, 2016
|
|
Section 3 (33)
|
Definition of “transaction”
|
1st November, 2016
|
|
Section 3 (34)
|
Definition of “transfer”
|
1st November, 2016
|
|
Section 3 (35)
|
Definition of “transfer of
property”
|
1st November, 2016
|
|
Section 3 (36)
|
Definition of “workman”
|
1st November, 2016
|
|
Section 3 (37)
|
words and expressions used but not
defined in this Code but defined in the Indian Contract Act, 1872, the Indian
Partnership Act, 1932, the Securities Contact (Regulation) Act, 1956, the
Securities Exchange Board of India Act, 1992, the Recovery of Debts Due to
Banks and Financial Institutions Act, 1993, the Limited Liability Partnership
Act, 2008 and the Companies Act, 2013, shall have the meanings respectively
assigned to them in those Acts.
|
19th August, 2016
|
|
Section 188
|
Establishment and incorporation of
Board.
|
5th August, 2016
|
|
Section 189
|
Constitution of Board.
|
5th August, 2016
|
|
Section 190
|
Removal of member from office.
|
5th August, 2016
|
|
Section 191
|
Powers of Chairperson.
|
5th August, 2016
|
|
Section 192
|
Meetings of Board.
|
5th August, 2016
|
|
Section 193
|
Member not to participate in
meetings in certain cases
|
5th August, 2016
|
|
Section 194
|
Vacancies, etc., not to invalidate
proceedings of Board,
Officers
and employees of Board.
|
5th August, 2016
|
|
Section 196
|
Powers and functions of Board
|
1st November, 2016
|
|
Section 197
|
Constitution of advisory
committee, execution committee or other committee
|
1st November, 2016
|
|
Section 221
|
Grants by Central Government.
|
19th August, 2016
|
|
Section 222
|
Board’s Fund.
|
19th August, 2016
|
|
Section 223
|
Accounts and audit
|
|
|
Section 225
|
Power of Central Government to
issue directions.
|
19th August, 2016
|
|
Section 226
|
Power of Central Government to
supersede Board.
|
19th August, 2016
|
|
Section 230
|
Delegation.
|
19th August, 2016
|
|
Section 232
|
Members, officers and employees of
Board to the public servants.
|
19th August, 2016
|
|
Section 233
|
Protection of action taken in good
faith.
|
19th August, 2016
|
|
Section 239
|
Power to make rules –
(1) The
Central Government may, by notification, make rules for carrying out the
provisions of this Code.
|
19th August, 2016
|
|
Section 239
|
Power to make rules –
(2) XX
(zd) the
salaries and allowances payable to, and other terms and conditions of service
of, the Chairperson and members of the Board under sub-section (5) of
section 189.
|
19th August, 2016
|
|
Section 239
|
Power to make rules –
(2) XX
(ze) the
other functions of the Board under clause (u) of sub-section (1) of
section
196;
(zf) the
other funds under clause (c) of sub-section (1) of section 222;
(zg) the
other purposes for which the fund shall be applied under clause (d) of
sub-section
(2) of section 222;
(zh) the
form in which annual statement of accounts shall be prepared under
sub-section
(1) of section 223;
|
1st November, 2016
|
|
Section 239
|
Power to make rules –
(2) XX
(zl) the
form and the time for preparing budget by the Board under section 228;
(zm) the
form and the time for preparing annual report under sub-section (1) of
section 229;
|
1st November, 2016
|
|
Section 240
|
Power to make regulations –
(1) The
Board may, by notification, make regulations consistent with this Code and
the rules made thereunder, to carry out the provisions of this Code.
|
19th August, 2016
|
|
Section 240
|
Power to make regulations –
(2) XX
(zt) the
appointment of other officers and employees under sub-section (2), and the
salaries and allowances payable to, and other terms and conditions of service
of, such officers and employees of the Board under sub-section (3), of
section 194.
|
19th August, 2016
|
|
Section 240
|
Power to make regulations –
(2) XX
clauses
(a) to (zm) and (zu) to (zzzc);
|
1st November, 2016
|
|
Section 241
|
Rules and regulations to be laid
before Parliament.
|
19th August, 2016
|
|
Section 242
|
Power to remove difficulties.
|
19th August, 2016
|
|
Section 244
|
Transitional provisions
|
1st November, 2016
|
|
Section 246
|
Amendments of Act 1 of 1944
|
1st November, 2016
|
|
Section 247
|
Amendments of Act 43 of 1961
|
1st November, 2016
|
|
Section 248
|
Amendments of Act 52 of 1962
|
1st November, 2016
|
|
Section 250
|
Amendments of Act 32 of 1994
|
1st November, 2016
|
|
Section 252
|
Amendments of Act 1 of 2004
|
1st November, 2016
|
See more at http://taxguru.in/corporate-law/sections-notified-bankruptcy-code.html
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