Amendments to Corporate Insolvency Resolution Process

On 18 September 2023, the Insolvency and Bankruptcy Board of India (IBBI) introduced the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023 (CIRP Amendment Regulations). Here is a summary of the key changes made through these regulations:

1. In applications seeking initiation of corporate Insolvency resolution process of the corporate debtor (CD), the creditor is now required to give various details and evidence pertaining to the chronology of debt, defaults and limitation.

2. The CIRP Amendment Regulations provide the procedure for the resolution professional (RP) to take custody and control of the assets and records of the CD as well as ensuring cooperation from CD personnel.

3.  Timelines for filing claims have been extended up to the issuance of a request for resolution plans or ninety days from the insolvency commencement date, whichever is later. According to the press release by IBBI dated 19 September 2023, this amendment has been brought to ease the burden on the National Company Law Tribunals (NCLT).

4. The role and responsibilities of authorized representatives (AR), particularly for homebuyers, have been enhanced. AR’s duties include reviewing RP-prepared minutes, assisting creditors in evaluating resolution plans, providing regular updates, and facilitating modifications of the plan. AR’s fees have also been increased, and a procedure for AR’s replacement has been introduced.

5.  Any member of the Committee can now propose for an audit of the CD and if approved by the Committee, the cost of such an audit will form a part of the CIRP expenses.

6. Timelines for procedural aspects like issuing information memoranda and requesting resolution plans have been aligned.

7. Changes in the invitation for expression of interest for a CD to now provide prospective resolution applicants with more information with less effort.

8. Compliance certificates now include CoC minutes where the resolution plan is approved, aiding the NCLT in understanding CoC decisions.

9. Creditors must provide details of debt assignment to the RP within seven days, streamlining CoC meetings.

The CIRP Amended Regulations are effective from 18 September 2023.

Please click here to view the CIRP Amendment Regulations. Please click here to read the press release by IBBI on 19 September 2023. Please click here to read our FAQ on CIRP Regulations and the related procedure involved.

Authors: Altamash Qureshi 

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