Section 53 of the insolvency and bankruptcy code (IBC) gives priority to secured financial creditors over all others, said Shardul Shroff, executive chairman of Shardul Amarchand Mangaldas.
The Cabinet has approved seven amendments to the IBC. One of the amendments makes it mandatory for the resolution process to be completed within 330 days.
“Section 53 of the IBC... it is clearly mentioned as to who gets what in priority. The secured financial creditors are the ones who get priority over every other unsecured creditor," he said in an interview with CNBC-TV18.
“This will be with retrospective effect where the proceedings have not received finality or are pending before any authority or before the authority of Supreme Court (SC) or High Court (HC). It is retrospective only to the extent that the resolution is not closed,” he added.