NEW DELHI: Parliament passed the Insolvency and Bankruptcy Code (Second Amendment) Bill,2018 on Friday, allowing home buyers to be treated as financial creditors and seeking to set up a special dispensation for small sector enterprises. The bill, which was passed in the Lok Sabha earlier, was approved by Rajya Sabha on Friday by voice vote.

The legislation seeks to replace the June 6 ordinance that sought to put these amendments into force to aid quick resolution of several bankrupt firms.

Replying to the debate on the Insolvency and Bankruptcy Code (Second amendment) 2018 in the Upper House, finance minister Piyush Goyal said its objective was to provide resolution to small bankrupt firms and, at the same time, take stringent action against big bankrupt businesses.

He said the bill aims to ensure that all cases are led to resolution instead of liquidation.

"We want faster resolution of cases. ....We don't want liquidation. Insolvency will not help the country. Assets worth crores should put to use," he said.

The Minister said the Insolvency Law Committee, which was set up in November 2017, had submitted the report on May 26 this year and every recommendations of the panel has been accepted and incorporated in the amendments.

On the approval of a resolution plan, the minister said the report said it should be approved by a panel of creditors by a vote of not less than 66 per cent of the voting share of financial creditors. For routine decisions, it should be 51 per cent vote requirement.

Supporting the bill, Congress' Jairam Ramesh said in the last two years out of 700 cases admitted under the Insolvency and Bankruptcy code only 3 per cent have been resolved, 12 per cent have gone into liquidation and 10 per cent have been closed.

"In other words out of 700 cases over 500 cases are active. Now the court says within 270 days the process must be complete. So my first question to the minsiter is high propostion of cases which are ongoing," Ramesh said.

Goyal said the government is trying to increase the strength of National Company Law Appellate Tribunal (NCLAT) to address the pendency of cases. "The number of courts, judicial members and technical members are being increased," he said.

Besides, a group has been set up to see speedy resolution of about 40,000 cases in NCLAT that are simple in nature and can be resolved by imposing non-discretionary penalty, he added.

