Frivolous insolvency proceedings attract a statutory penalty to deter abuse of the adjudicatory process.

Insertion of a new penalty provision for frivolous or vexatious proceedings under Part II of the Insolvency and Bankruptcy Code. Where a person initiates such proceedings before the Adjudicating Authority, the Authority is empowered to impose a monetary penalty within the prescribed statutory range, with a minimum of one lakh rupees and a maximum of two crore rupees.

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