Question

reason why 2018 amendment ordinance came into effect

Answer 1

The ILRC, in the context of definition of “operational debt” under section 5 (21) of the Code, recommended replacement of the word “repayment” by the word “payment”, as the latter carries wider import. The word ‘payment’ is a wider term which means “performance of an obligation by the delivery of money or some other valuable thing accepted in partial or full discharge of the obligation”. The term ‘repay’ means “to pay back” or “refund” and the term ‘repayment’ means “the act of repaying”. The change is mere clarificatory – if one fails to pay “interest”, it is default in “payment” of interest, and not “repayment” of interest. While principal is “repaid”, interest is “paid”.

Accordingly, the Ordinance replaces the word “repaid” by “paid” in various provisions of the Code such as section 3(12), section 8(2)(b), explanation to section 8, section 9(5)(i)(b), section 9(5)(ii)(b), etc.