On June 14, 2022 the Insolvency and Bankruptcy Board of India (IBBI) has amended its following regulation for certain revision:
Insolvency Resolution Process for Corporate Persons Regulations, 2016:
IBBI has amended the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 with new IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2022 to revise the procedure of recording evidences, and applications made to ‘resolution professional’ by the creditors.
This amendment has been made by IBBI in exercise of its powers conferred by clause (t) of sub- section (1) of section 196 read with sections 7, 9 and 240 of the Insolvency and Bankruptcy Code (IBC), 2016 (31 of 2016).
Key Regulations inserted:
i.For the purpose of resolving the process of insolvency, creditors may furnish the relevant records of transaction/debt/default by operational creditor.
- For making such applications, copies of Form GSTR (Goods and Services Tax Return)-1 and GSTR-3B under GST and e-way bill will have to be provided.
- For the successful submission of these applications the Operational creditors will require their Permanent Account Number (PAN) and e-mail.
ii.Documents of debtors are part of major evaluation while assessing their insolvency, while doing so the resolution professional may go through his documents under Regulation 4(1).
iii.With newly added provision Regulation 4 (2) and (3), the debtors are required to provide relevant information for such evaluation.
- Creditors will also provide management personnel of debtors, records of assets and liabilities stock statements, valuation reports, etc., of the debtor.
iv.In the process of preparing information memorandum of the corporate debtor, the resolution professional will be required from the creditors, under Regulation 35-A.
v.To find out the fair value/liquidation value two valuers are allotted to evaluate the inventories and fixed assets of the debtor. Under the Resolution Plan of these Regulation, Regulation 35 (1)(b) has been modified.
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IBBI (Grievance and Complaint Handling Procedure) Regulations, 2017:
IBBI also amended the (Grievance and Complaint Handling Procedure) Regulations, 2017 with IBBI (Grievance and Complaint Handling Procedure) (Amendment) Regulations, 2022 to have expeditious redressal and also to avoid placing undue burden on the service providers.
- This amendment has been made by IBBI in exercise of its powers conferred under section 196, 217 read with section 240 of the IBC, 2016 (31 of 2016).
Key Revisions:
i.A grievance or a complaint is filed with the Board on its dedicated portal www.ibbi.gov.in.
ii.The amendment modifies the period for the aggrieved and the service provider to submit the information and records to 7 days from 15 days.
- An additional time not exceeding seven days may be granted by the Board under sub-regulation (2) on the request of the service provider.
iii.Time period in which the Board must close the grievance has been modified from 45 days to 30 days.
iv.Time period in which the Board must direct the service provider to redress the grievance has been modified from from 45 days to 30 days.
v.Regulations on Disposal of grievance by Insolvency Professional Agency (IPA) has also inserted.
- It seeks effective participation of IPAs in regulating the IPs through examination of grievances received against IPs.
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IBBI (Inspection and Investigation) Regulations, 2017:
IBBI also amended the (Inspection and Investigation) Regulations, 2017 with IBBI (Inspection and Investigation) (Amendment) Regulations, 2022 to provide mechanism for carrying out inspections and investigations on IPAs, insolvency professionals and information utilities and passing orders by Disciplinary Committee.
- This amendment has been made by IBBI in exercise of its powers conferred under sections 196, 217, 218, 219, 220 read with section 240 of IBC, 2016 (31 of 2016).
This amendment saw an insertion of Chapter III-A for Investigation during Disposal of Complaint or Grievance; and Chapter III-B for Interim Order on Material Available on Record.
CHAPTER III-A
i.Under this, the processing of a complaint or grievance or material available on record under the IBBI (Grievance and Complaint Handling Procedure) Regulations, 2017 will mean investigation under this regulation and in such case the processing papers will mean the investigation report under regulation 10.
ii.The Board can appoint an inspecting authority under Chapter-II or an investigating authority under Chapter-III.
CHAPTER III-B
i.If the Board is satisfied that there is a violation of the provisions of the Code or the rules or regulations made thereunder by the service provider, and an immediate action under sub-section (2) of section 220 is warranted, it can refer the matter to the Disciplinary Committee for an appropriate action.
ii.On consideration of the matter, the Disciplinary Committee may pass an interim order with appropriate directions.
iii.The interim order will lapse on expiry of 90 days from the date of the order.
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IBBI (Information Utilities) Regulations, 2017:
IBBI amended the (Information Utilities) Regulations, 2017 with the IBBI (Information Utilities) (Amendment) Regulations, 2022.
- Amendment has been made to regulation 20 mandating creditors to file information of default with information utility before filing an application to initiate CIRP under section 7 or 9.
- It has also introduced form D for record of default i.e. for the status of authentication of default.
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Recent Related News:
i.In order to streamline the voluntary liquidation process of stressed firms, IBBI has amended the IBBI (Voluntary Liquidation Process) Regulations, 2017 and will be called the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 2022.
ii.IBBI, an insolvency regulator signed a Memorandum of Understanding (MoU) with Indian Banks Association (IBA) to collaborate on capacity building for financial creditors on topics related to insolvency, bankruptcy and related subjects.
About Insolvency and Bankruptcy Board of India (IBBI):
Establishment– 2016
Chairperson– Ravi Mittal
Headquarters– New Delhi, Delhi
