MISCELLANEOUSCentral

Section 252 of The Insolvency and Bankruptcy Code, 2016.

The Sick Industrial Companies (Special Provisions) Repeal Act, 2003 shall be amended in the manner specified in the Eighth Schedule.

Summary

This section amends the Sick Industrial Companies (Special Provisions) Repeal Act, 2003.
It directs that these amendments must be made in the manner detailed in the Eighth Schedule of the Code.
It facilitates the transition of old, pending cases of sick industrial companies into the new insolvency framework.
It provides a pathway for companies with abated or stopped cases to file before the National Company Law Tribunal.

Practical examples

1Ramesh is a director of a manufacturing company whose revival reference under the old sick companies law stood abated, meaning cancelled, due to the new law coming into force. Under Section 252 of the Insolvency and Bankruptcy Code, 2016, his company can make a new reference to the National Company Law Tribunal within one hundred and eighty days of the commencement of the Code without paying any fees.

2Priya is a creditor of a textile unit that has a rehabilitation scheme already approved under the old sick companies law. Thanks to Section 252 of the Insolvency and Bankruptcy Code, 2016, this old scheme is treated as an approved resolution plan under the new Code, ensuring that the company's restructuring continues smoothly.

FAQ

1. What does Section 252 of the Insolvency and Bankruptcy Code, 2016 do to the Sick Industrial Companies (Special Provisions) Repeal Act, 2003?

Section 252 of the Insolvency and Bankruptcy Code, 2016 provides that the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 is amended in the manner laid down in the Eighth Schedule of the Code.

2. How does Section 252 of the Insolvency and Bankruptcy Code, 2016 help a company whose old case stood abated?

Under Section 252 of the Insolvency and Bankruptcy Code, 2016 and its corresponding Eighth Schedule, a company whose old case abated can make a reference to the National Company Law Tribunal within one hundred and eighty days of the commencement of the Code, and no fees will be charged for this reference.

Test yourself

Q1.Under Section 252 of the Insolvency and Bankruptcy Code, 2016, which Act is amended?

Q2.In what manner is the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 amended under Section 252 of the Insolvency and Bankruptcy Code, 2016?

Q3.How does Section 252 of the Insolvency and Bankruptcy Code, 2016 affect old rehabilitation schemes that were already sanctioned under the old sick companies framework?

Q4.Under the provisions of Section 252 of the Insolvency and Bankruptcy Code, 2016, what is the timeline within which a company can file a reference before the National Company Law Tribunal after its old case abated?

251PreviousSection 251 Amendments of Act 54 of 2002.253NextSection 253 Amendments of Act 51 of 2007.

←Section 251 Section 253→