Bill to treat homebuyers as creditors passed; resolution on SC, ST rejected
THE AMENDMENTS MAKE IT EASIER FOR BANKS TO SALVAGE A FAILED FIRM BY LOWERING THE VOTES NEEDED FOR TAKING CRITICAL DECISIONS
The Rajya Sabha on Friday passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018 that paves the way for homebuyers to seek relief from defaulting builders as financial creditors.
However, a resolution seeking Constitutional amendments to ensure that people belonging to Scheduled Castes and Scheduled Tribes in one state should be regarded the same across the country to avail reservation benefits was shot down.
The Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018 allows homebuyers to decide the future of defaulting builders along with their lenders. The amendments also make it easier for banks to agree on salvaging a failed firm from going kaput by lowering the votes needed for taking critical decisions to 66% from 75%.
The bill, passed by the Lok Sabha earlier, seeks to replace the June 6 ordinance that sought to put these provisions into force. Speaking during the discussion on the bill, finance minister Piyush Goyal said wilful defaulters will be dealt with iron hands. “The haircut is only for genuine cases. The banks are given free hand,” he said.
Bharatiya Janata Party’s Mahesh Poddar called the bill revolutionary and suggested that in order to protect homebuyers and small investors, banks must take a lesser haircut. However, Communist Party of India’s D Raja argued that the Bill would help the big corporate houses and defaulters but not the banks.
Samajwadi Party’s Kahkashan Parween said farmers continued to be harassed for not paying loan whereas big corporate that defaulted on their loans were let off by the banks.
Earlier in the day, a private member’s resolution seeking amendments to Articles 341 and 342 of the Constitution to ensure that members of SC and ST communities are not denied reservation in any state was negated in the Rajya Sabha. The resolution, moved by SP’s Vishambhar Prasad Nishad, said that when people of SC/ST communities migrate from one state to another in search of employment and settle there permanently, they are rendered ineligible for availing reservation benefits as the SC/ST list varies from state to state.
During the discussions on the resolution, Union social justice and empowerment minister Thaawar Chand Gehlot said the government was committed to the welfare of the Dalits, SCs and STs but it could not immediately bring the changes the MP had asked for in the resolution.
Usually, private members’ resolutions are withdrawn by the MPs moving them after a discussion and the government’s assurance on the matter. However, on Friday the Opposition insisted that a voting must take place on Nishad’s resolution. The government voted against the resolution in an attempt to defeat it in the House, prompting the Opposition to call the Centre “anti-Dalit and Manuwadi”. Thirty two parliamentarians voted in favour of the resolution while 66 opposed it. If the resolution was passed then the government would have been bound to bring a Bill in the next session to make it a law.