Key Changes Introduced by the Insolvency and Bankruptcy Code (Amendment) Act, 2023

The Insolvency and Bankruptcy Code (Amendment) Act, 2023 received the President’s assent on 11th August 2023 and was published in the Gazette of India the same day. This amendment brings significant changes that directly impact corporate insolvency resolution, especially for MSMEs and real estate projects.

Major highlights:

• Pre‑packaged insolvency for MSMEs: The amendment formalises a debtor‑initiated pre‑pack process, allowing small businesses to restructure with minimal court intervention while keeping management in control.
• Treatment of homebuyers: Allottees of real estate projects are now explicitly treated as financial creditors under Section 5(8)(f), resolving earlier ambiguity.
• Streamlined CIRP timelines: New deadlines for certain procedural steps and a relaxation of the 330‑day outer limit in specific circumstances.
• Enhanced powers of the Committee of Creditors (CoC): The CoC can now approve certain resolution plan modifications without requiring a fresh vote.

These changes aim to reduce the burden on the NCLT and speed up resolutions, particularly for smaller firms. Practitioners dealing with IBC matters should carefully review the amended sections, especially the newly inserted Chapter IV‑A (Pre‑packaged Insolvency Resolution Process).

For a deeper, practical commentary on the IBC, refer to our book “Law on Insolvency & Bankruptcy” – written by a former NCLT Registrar with extensive hands‑on experience.

(Note: This summary is based on official gazette notification No. 47 of 2023. Always refer to the original act for legal interpretation.)