The Bill, which replaces an ordinance promulgated last November, was cleared by the Lok Sabha last week.

The Rajya Sabha on Tuesday passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2017, which bars unscrupulous persons from misusing the provisions of the Code. The Bill, which replaces an ordinance promulgated last November, was cleared by the Lok Sabha last week.

Concurring with Congress leader Jairam Ramesh, Finance Minister Arun Jaitley said it was only in recent years that the government had chartered into the bankruptcy and insolvency area. “Therefore, for all of us, it is a learning experience. We encounter situations that we had not anticipated earlier, and as we move further, we will certainly require evolution as far as our laws and procedures are concerned,” he said.

Addressing another issue flagged by Opposition members, including Mr. Ramesh, about the Code’s application vis-à-vis Micro, Small, and Medium Enterprises (MSME), Mr. Jaitley said Insolvency Legal Committee was examining if separate regulations were required for the sector.

Another major concern was the huge “haircut [loss on account of auction of assets of defaulting companies],” to the extent of 75%, being taken by public sector creditors. To this, Mr. Jaitley said it was for the creditors to decide how much haircut they wanted to settle for.

Initiating the debate, former Finance Minister P. Chidambaram said there were flaws in several clauses. “One should have kept exclusion to a very, very small number, which definitely must be excluded. By making clauses so broad, so over-inclusive, practically everybody in the financial world is likely to be excluded.”