Ordinance Current Affairs

Cabinet approves promulgation of ordinance to amend Insolvency & Bankruptcy Code

Union Cabinet has proposal to promulgate an ordinance under Article 123 of Constitution to make certain amendments in the Insolvency and Bankruptcy Code (IBC).

The ordinance is likely to be tabled during winter session of Parliament with view to getting its approval soon. The President’s nod for the ordinance is expected shortly.

Key Facts

The amendments seeks to strengthen IBC by explicitly preventing certain persons — including wilful defaulters, those who have indulged in fraudulent transactions, disqualified directors as well as promoters whose account is classified as non-performing assets (NPA) beyond prescribed duration from regaining control of defaulting company through  backdoor in the garb of a resolution applicant.

These amendments were proposed because in initial phase of Corporate Insolvency Resolution Process (CIRP) under IBC, a number of cases are likely to have long pending default requiring deep haircut for the creditors.  This decision also after Insolvency and Bankruptcy Board of India (IBBI) amended its CIRP Regulations to ensure that as part of due diligence, prior to approval of a ‘Resolution Plan’, the antecedents, credit worthiness and credibility of Resolution Applicant, including promoters, are taken into account by Committee of Creditors (CoC).

Insolvency and Bankruptcy Code (IBC)

The IBC provides for market-determined and time-bound insolvency resolution process. It provides for effective and robust legal framework for time-bound insolvency resolution to release assets locked up in NPA and promote maximisation of value of assets, failing which, under-utilised resources of unviable business are released through liquidation.

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Supreme Court refuses to ban Kambala

The Supreme Court has refused to pass an interim order to stay Ordinance allowing kambala, the traditional buffalo slush track race in Karnataka.

However, the apex court will examine the Constitutional validity of the Ordinance. People for Ethical Treatment of Animals (PETA), a non-governmental organisation, had challenged the Ordinance.

Background

Karnataka Assembly had passed an ordinance Prevention of Cruelty to Animals (Karnataka Amendment) Bill, 2017 in February 2017 to allow Kambal to circumvent ban imposed by Karnataka High Court. The ordinance had received Central Government (Ministry of Law and Justice) and Presidential assent. The Karnataka HC had stayed these traditional sports in view of Supreme Court’s ban on jallikattu, a traditional bull taming sport of Tamil Nadu.

Kambala

Kambala is traditional slush track buffalo race that is held annually in coastal districts of Karnataka to entertain rural people of the area. Slushy/marshy paddy field track is used for Kambala. The sports season generally starts in November and lasts till March. The contest generally takes place between two pairs of buffaloes, each pair race in two seprate wet rice fields tracks, controlled by a whip-lashing farmer.

In the traditional form of Kambala, buffalo racing was non-competitive and buffalo pairs ran one by one in paddy fields. Besides, there was also ritualistic approach as some agriculturists race their buffaloes as a means to thank god for protecting their animals from disease. But in recent times, Kambala has become an organised rural sport.

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