Section 50
Extortionate credit transactions.
The Insolvency and Bankruptcy Code, 2016.
About this Act
An Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto.
(1) Where the corporate debtor has been a party to an
extortionate credit transaction involving the receipt of financial or operational debt during the period
within two years preceding the insolvency commencement date, the liquidator or the resolution
professional as the case may be, may make an application for avoidance of such transaction to the
Adjudicating Authority if the terms of such transaction required exorbitant payments to be made by the
corporate debtor.
(2) The Board may specify the circumstances in which a transactions which shall be covered under sub-section (1).
Explanation.—For the purpose of this section, it is clarified that any debt extended by any person providing financial services which is in compliance with any law for the time being in force in relation to such debt shall in no event be considered as an extortionate credit transaction.
(2) The Board may specify the circumstances in which a transactions which shall be covered under sub-section (1).
Explanation.—For the purpose of this section, it is clarified that any debt extended by any person providing financial services which is in compliance with any law for the time being in force in relation to such debt shall in no event be considered as an extortionate credit transaction.