Insolvency and Bankruptcy Board of India amends the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (MCA updates 15th June 2022)

The Insolvency and Bankruptcy Board of India (IBBI/Board) notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2016 (CIRP Regulations) on 14th June, 2022.

The amendment provides the operational creditors to furnish extracts of Form GSTR-1, Form GSTR-3B and e-way bills, wherever applicable along with the application filed under section 9 of the Insolvency and bankruptcy Code, 2016. These additional set of documents, can  be used as evidence of transaction with the corporate debtor, debt and default easing the process of admission. These documents will also to be submitted as part of the claims submitted to the resolution professional to help collation of claims. Further, creditors filing applications under section 7 or 9 of the Code are required to furnish details of their PAN and Email ID to ensure smooth correspondence.

In order to improve information availability, the amendment places a duty on corporate debtor, its promoters or any other person associated with the management of the corporate debtor to provide the information in such format and time as sought by the resolution professional.

The amendment places a duty on the creditors to share information regarding the assets and liabilities of the corporate debtor, the financial statements and other relevant financial information from their records and available reports to help the resolution professional in preparation of the information memorandum and relevant extracts from the transaction or forensic audit reports to aid the resolution professional in preparation of the avoidance application.

The Amendment also addresses the issue of treatment of avoidance applications filed with the Adjudicating Authority after closure of the corporate insolvency resolution process (CIRP). It provides that the resolution plan shall provide for manner in which such applications will be pursued after the approval of the resolution plan and the manner in which the proceeds, if any, from such proceedings shall be distributed.

The amendment includes a definition of significant difference in valuations during CIRP and enables the committee of creditors to make a request to the resolution professional regarding the appointment of a third valuer.

The amended regulations are effective from today. These are available at www.ibbi.gov.in.

MCA Press release dated 15th June 2022

IBBI amends Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) Regulations, 2017 and the Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017 (MCA updates 15 June 2022)

With a view to put in place, a streamlined and swift complaint handling procedure, the Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) (Amendment) Regulations, 2022 and the Insolvency and Bankruptcy Board of India (Inspection and Investigation) (Amendment) Regulations, 2022 to amend the Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) Regulations, 2017 and the Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017.

The Insolvency and Bankruptcy Code, 2016 (Code) read with Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) Regulations, 2017 provide mechanism for redressal of complaints and grievances filed against insolvency professionals, insolvency professional agencies and information utilities. Further the Code read with Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017 provide mechanism for carrying out inspections and investigations on insolvency professional agencies, insolvency professionals and information utilities and passing orders by Disciplinary Committee.

The mechanism of complaint/ grievance redressal and subsequent enforcement action has been amended to have expeditious redressal and also to avoid placing undue burden on the service providers. To curtail such delays and to ensure expeditious and result oriented enforcement mechanism, the Amendment Regulations provides for following:

  • Revisions in various timelines related to enforcement process provided in the (Grievance and Complaint Handling Procedure) Regulations, 2017 and (Inspection and Investigation) Regulations, 2017 for addressing the issue of delay in present mechanism.
  • Effective participation of IPAs in regulating the IPs through examination of grievances received against IPs.
  • Intimation to Committee of Creditor (CoC)/ Adjudicating Authority (AA) about the outcome of Disciplinary Committee (DC) order.

The Amendment Regulations are effective from 14th June, 2022. These are available at www.ibbi.gov.in.

MCA Press Release dated 15th June 2022

MCA : IBBI to hold Conference on “Entrepreneurship Liberty: Freedom of Entry, Competition and Exit” and IP Conclave under Azadi ka Amrit Mahotsav on 10th June 2022

Insolvency and Bankruptcy Board of India (IBBI) is organising a one-day iconic event on 10th June 2022 at the Habitat Centre, New Delhi, to mark the glorious conclusion of the on-going celebrations across 75 locations across the country, to trace the journey of reforms in the three stages of a business.

Markets need freedom, broadly, at three stages of a business – to start a business (free entry), to continue the business (free competition) and to discontinue the business (free exit). The Insolvency and Bankruptcy Code, 2016 offers a market directed, time bound mechanism for resolution of insolvency, wherever possible, or exit, wherever required, and thereby ensures the ultimate freedom, the freedom to exit, facilitating ease of doing business.

Hon’ble Justice Ashok Bhushan Chairperson, National Company Law Appellate Tribunal will grace the occasion as Chief Guest. Shri Rajesh Verma, Secretary, Ministry of Corporate Affairs; Shri Ashok Kumar Gupta, Chairperson, Competition Commission of India; and Shri Praveen Kumar, DG & CEO, Indian Institute of Corporate Affairs will be the Guests of Honourat the event. The Conference shall be followed by a half day Insolvency Professional Conclave.

Further Shri Dharmender Singh Hon’ble Member (Judicial), National Company Law Tribunal; Shri Avinash K. Srivastava Hon’ble Member (Technical), National Company Law Tribunal; Shri Anant Barua Whole Time Member, Securities and Exchange Board of India Shri Satish Kumar Gupta Insolvency Professional; Shri Debajyoti Ray Chaudhuri MD & CEO, National E-Governance Services Ltd.; Shri Kapil Mantri Head M&A, Jindal Steel and Power Ltd.; Shri Amarjit Singh Chandhiok Senior Advocate; President, INSOL India ; Shri Shardul Shroff Executive Chairman, Shardul Amarchand Mangaldas & Co. and CS Alka Kapoor, COO ICSI IIP will also address the participants at the event.

A publication titled, “Anusandhaan: Exploring New Perspectives on Insolvency” containing 26 research papers that emerged out of an international research conference organized by IBBI and IIM Ahmedabad recently is also scheduled to be released during the inaugural session of the Conference.

Large number of stakeholders of the IBC ecosystem, from across the country, including insolvency professionals, registered valuers, economists, financial creditors, service providers, researchers, students, professionals, regulators, academia and government officers are expected to join the Conference both in physical well as online mode.

Azadi Ka Amrit Mahotsav (AKAM) is an initiative of the Government of India to celebrate and commemorate 75 years of progressive India and the glorious history of its people, culture and achievements. Since the beginning of AKAM celebrations which was started on 12th March, 2021 by the Prime Minister, Shri Narendra Modi. IBBI has organized several activities and events as part of the Mahotsav

For more detailed programme, CLICK HERE.

Ministry of Corporate Affairs Press Release 09th June 2022

SC : Adjudicating authority (NCLT) or the appellate authority (NCLAT) cannot sit in appeal on commercial wisdom of Committee of Creditors

Case Reference: Vallal Rck Vs Siva Industries And Holdings Limited And Others (Supreme Court) dated 03/06/2022

SC held that when 90% or more of the creditors decide that it will be in the interest of all the stake-holders to permit Settlement Plan filed by promoter of the Corporate Debtor and withdraw Corporate Insolvency Resolution Process as per Section 12A of the IBC, 2016, the adjudicating authority (NCLT) or the appellate authority (NCLAT) cannot sit in appeal over such commercial wisdom of Committee of Creditors.

Insolvency and Bankruptcy Board of India (Engagement of Research Associates and Consultants) (Amendment) Regulations, 2022 (Notification dated 01st June 2022)

No. IBBI/2022-23/GN/REG083.- In exercise of the powers conferred by section 240 read with section 194 of the Insolvency and Bankruptcy Code, 2016 (No. 31 of 2016), the Insolvency and Bankruptcy Board of India hereby makes the following regulations to amend the Insolvency and Bankruptcy Board of India (Engagement of Research Associates and Consultants) Regulations, 2017, namely:-

1. (1) These regulations may be called the Insolvency and Bankruptcy Board of India (Engagement of Research Associates and Consultants) (Amendment) Regulations, 2022.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Insolvency and Bankruptcy Board of India (Engagement of Research Associates and Consultants) Regulations, 2017, (hereinafter referred to as „the principal regulations‟) in regulation 5, after subregulation (3), the following proviso shall be inserted, namely:-

“Provided that the Chairperson may amend the consolidated remuneration given in Schedule II for reasons to be recorded in writing.”

3. In the principal regulations, in regulation 8, for sub-regulation (1), the following sub-regulation shall be substituted, namely:- “(1) A selected candidate shall ordinarily be engaged as a Research Associate or Consultant, as the case may be, on contractual basis for a period not less than one year and up to three years: Provided that the Chairperson may extend the term of such engagement, one year at a time, up to a maximum of total five years.”

4. In the principal regulations, for Schedule II, the following Schedule shall be substituted, namely:

IBBI to launch 3rd National Online Quiz on Insolvency and Bankruptcy Code, 2016

As part of the ongoing ‘Azadi Ka Amrit Mahotsav’ celebrations, the Insolvency and Bankruptcy Board of India (IBBI) in collaboration with MyGov.in and BSE Investors’ Protection Fund is conducting the ‘3rd National Online Quiz on Insolvency and Bankruptcy Code, 2016’, to promote awareness and understanding of the Code among various stakeholders, across the country. The Quiz is open from 16th April, 2022 to 15th May, 2022. 

The 3rd edition Quiz has been launched in continuation to the two quiz organized earlier, in the years 2020 and 2021, which evinced an overwhelming response, with over 1.9 lakh participants, in total, representing all the States and Union Territories of the country. The Quiz received interest from a wide range of stakeholders, including students, professionals and employees. 

The Quiz shall be open on the MyGov portal https://quiz.mygov.in for all Indian citizens above 18 years of age, except for individuals working in IBBI, BSE Investors’ Protection Fund and service providers registered with IBBI, as also their immediate family members.

The best performer will be awarded a Gold Medal along with a cash prize of Rs. 1,00,000/- (One lakh rupees only). The second-best performer will be awarded a Silver Medal along with a cash prize of Rs. 50,000/- (Fifty thousand rupees only) and the third best performer will be receiving a Bronze Medal along with a cash prize of Rs. 25,000/- (Twenty five thousand rupees only). The next ten best performers will be awarded consolation prizes of Rs. 10,000/- (Ten thousand rupees only) each. Additionally, the top 10% performers shall be awarded ‘Certificates of Merit’ and all the participants will receive ‘Certificates of Participation’. The cash prizes and medals are sponsored by the BSE Investors’ Protection Fund, as part of its investor awareness initiatives.

The details of terms and conditions, schedule, awards and commendations being offered are available at https://www.ibbi.gov.in/events/upcoming-events and the Quiz can be played at https://quiz.mygov.in/quiz/3rd-national-online-quiz-on-the-insolvency-and-bankruptcy-code-2016/

The IBBI encourages everyone to participate in the Quiz and have a chance to win attractive prizes along with fostering a heightened awareness and knowledge about the Code.

IBBI amends the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 (MCA Press release dated 08th April 2022)

The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 2022 (Amendment Regulations) on 05th April, 2022.

The Insolvency and Bankruptcy Code, 2016 read with Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 provide mechanism for voluntary liquidation of solvent corporate person. It has been noticed that there has been substantial delay in completion of voluntary liquidation process, though the process, in general, involve nil or negligible claims of creditors, fewer assets, if any, to be realized and few litigations, if any, to be concluded. To curtail such delay and ensure faster exit for firms, the Amendment Regulations modify timelines for some stipulated activities undertaken during the process as under:

  • The liquidator shall prepare the list of stakeholders within fifteen days (against the previously stipulated forty-five days) from the last date for receipt of claims, where no claim from creditors has been received till the last date for receipt of claims. 
  • The liquidator shall distribute the proceeds from realization within thirty days (against the previously stipulated six months) from the receipt of the amount to the stakeholders.
  • It has been further provided that the liquidator shall endeavour to complete the liquidation process of the corporate person within two hundred and seventy days from the liquidation commencement date, where the creditors have approved the resolution under section 59(3)(c) or regulation 3(1)(c), and ninety days from the liquidation commencement date in all other cases (against the previously stipulated 12 months in all situations). 

To provide summary of actions taken by the liquidator during the voluntary liquidation process, the Amendment Regulations specify a compliance certificate which is required to be submitted along with application under section 59(7) to the Adjudicating Authority, by the liquidator. It shall facilitate the Adjudicating Authority to adjudicate dissolution applications expeditiously. 

The Amendment Regulations are effective from 05th April, 2022. These are available at www.mca.gov.in and www.ibbi.gov.in.