Presented by: CS NESAR AHMAD Tel: +91-11-2953 6312
Description: Presented by: CS NESAR AHMAD Tel: 91-11-2953 6312 csnesar367gmail.com Mob: 91-9810044367 Sankalp C-227, Paryavaran Complex New Delhi-110 030 THE INSOLVENCY AND BACKRUPCTY CODE, 2016 An overview... CONTENTS I. PART A OVERVIEW
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slide1. Presented by: CS NESAR AHMAD Tel: +91-11-2953 6312
csnesar367@gmail.com Mob: +91-9810044367
‘Sankalp’ C-227, Paryavaran Complex
New Delhi-110 030 THE INSOLVENCY AND BACKRUPCTY CODE, 2016 An overview...<br>
slide2. CONTENTS I. PART –A
OVERVIEW & ANALYSIS OF PART-I
ANALYSIS OF PART-II
ANALYSIS OF PART-III.
BRIEF ANALYSIS OF PART-IV & V<br>
slide3. CONTENTS PART –B
LATEST DEVELOPMENTS AT A GLANCE
DECEPHERING THE RULES.
DECEPHERING THE SECTIONS.
CONCLUSION.<br>
slide5. BACKGROUND Manifold laws & forums BIFR SICA 1985 INDUSTRIAL SICKNESS SARFAESI Act, 2002 RECONSTRUCTION OF FINANCIAL ASSETS REGULATE SECURITISATION DRT S.3(1) Recovery of Debts Due to Banks and Financial Institutions Act, 1993 To attain objectives Of SARFAESI Act.<br>
slide6. BACKGROUND Other erstwhile legislative framework<br>
slide7. BACKGROUND Around 70,000 insolvency & bankruptcy cases are pending in various forums with a lock-in of huge national wealth of Rs. 500,000 Crores.
Increasing statistics of NPA has also put a question on the country’s dispute resolution mechanism even though India’s GDP is growing year after year.
India ranks 136 out of 189 countries in the World Bank index on ‘Ease of Doing Business- resolving insolvencies. Need for Code<br>
slide8. BACKGROUND There was a dire need for a government to pass an uniform, comprehensive insolvency legislation to foster ease of doing business in Asia’s second largest economy.
Since, previous framework failed to aid lenders in effective and timely recovery or restructuring of defaulted assets .
Code enacted w.e.f. May 28th, 2016 to consolidate all existing laws and remove undue strain on the Indian credit system.
The Code is a historical development for economic reforms in India. Need for Code<br>
slide9. Consolidated Framework Multiple overlapping laws & adjudicating forums done away with since objectives set out in preamble of previous law(s) were not adequately met.
The effect of new code is seen as the Institutional infrastructure and implementing rules as envisaged under the code have been notified.<br>
slide10. MERITS OF THE CODE Better regulatory developments in conformity with global legislations .
Code would work as ‘Think Tank’ in achieving the objectives of ‘Ease of doing business’.
An uniform, comprehensive and time bound insolvency legislation for companies, LLP’s, partnerships and individuals .
The Code significantly changes the priority waterfall for distribution of liquidation proceeds.<br>
slide11. The Code is oriented towards ‘Creditor Control Approach’.
It recognises the difference between Operational Creditor & Financial Creditor.
It enables symmetry of information between creditors & debtors via Information utilities. MERITS OF THE CODE<br>
slide12. DECIPHERING THE CODE<br>
slide13. DECIPHERING THE CODE It envisages 255 Sections. The Code is divided into FIVE PARTS namely-6,<br>
slide14. DECIPHERING THE NEW CODE PART-I : Preliminary
28th May, 2016, APPLICABILITY OF CODE:<br>
slide15. DECIPHERING THE NEW CODE ☼ Few important definitions
“Board" means the Insolvency and Bankruptcy Board of India (IBBI) established under sub-section (1) of section 188;
“Corporate debtor" means a corporate person who owes a debt to any person;
“Insolvency professional" means a person enrolled under section 206 with an insolvency professional agency as its member and registered with the Board as an insolvency professional under section 207; PART-I : Preliminary
28th May, 2016,<br>
slide16. ANALYSIS OF PART -II AT A GLANCE<br>
slide17. ANALYSIS OF PART -II Applicability: Insolvency & liquidation of Corporate Debtors (CD) (Defined in Part-I).
Monetary default limit : Minimum INR 1,00,000.
Adj. Authority: NCLT constituted w.e.f. June 01, 2016.
Modes: The Code covers 2 independent stages:
Insolvency Resolution Process (‘IRP’), during which financial creditors assess whether the debtor's business is feasible to continue and the options for its rescue via RESOLUTION PLAN.<br>
slide18. ANALYSIS OF PART -II Liquidation, if the IRP fails or majority financial creditors decide to wind down and distribute the assets of the debtor.
IRP period: Period of 180 days beginning from the insolvency commencement date and ending on one hundred and eightieth day subject to extension of max. 90 days.
Salient features of IRP:
Who may apply for IRP to NCLT: Financial creditor/ operational creditor OR THE CD ITSELF may initiate corporate IRP in respect of such corporate debtor.
Moratorium: S.14 of Part-II provides for such Cooling-off period
Period of moratorium is the same as period of IRP.<br>
slide19. ANALYSIS OF PART -II What is the effect of Moratorium Period: Judicial proceedings for recovery, enforcement of security interest, sale or transfer of assets, or termination of essential contracts CAN’T take place against the CD during such period.
Resolution Professional(‘RP’):
S.16-20 deal with appointment, functions, duties of such professional.
NCLT appoints an RP to administer the IRP. Where the resolution professional, is proposed by F.C he/she shall be appointed as the interim resolution professional, if no disciplinary proceedings are pending against him.
The RP’s primary function is to take over the management of the corporate borrower and operate its business as a going concern.<br>
slide20. ANALYSIS OF PART -II Creditors Committee and Resolution Plan
RP identifies the financial creditors and constitutes a creditors committee. Each decision of the creditors committee requires a 75% majority vote.
The creditors committee considers proposals for the revival of the debtor and must decide whether to proceed with a revival plan or liquidation within a period of 180 days (subject to a one-time extension by 90 days)<br>
slide21. ANALYSIS OF PART -II ☼ “Liquidation Process” : ( Chapter III) : Corp. Debtors.
A corp. debtor may be subject to liquidation process if –
75% majority of the creditor's committee resolves to liquidate the corporate debtor at any time during the IRP;
The creditor's committee does not approve a resolution plan within 180 days (or within the extended 90 days);
The NCLT rejects the resolution plan submitted to it on technical grounds; or
The debtor contravenes the agreed resolution plan and an affected person makes an application to the NCLT to liquidate the corporate debtor.
∞ IRP for CP Reg. notified on 1.12.16 to be discussed later.<br>
slide22. ANALYSIS OF PART -III AT A GLANCE<br>
slide23. ANALYSIS OF PART -III Applicability: Part –III applies to matters relating to fresh start process, IRP & bankruptcy order for Individuals & Debtors.
Monetary default limit :To initiate an fresh start, insolvency & bankruptcy process under Part-III for the default should be at least INR 1000.
Adjudicating Authority: DRT
Modes: The Part covers 3 independent stages:
Fresh Start process
Insolvency Resolution Process
Bankruptcy Order<br>
slide24. ANALYSIS OF PART –IV & V Part-IV covers “Regulation of Insolvency Professionals, Agencies & Information Utilities”
The Insolvency Regulator
The Code provides for the constitution of a new insolvency regulator i.e., the Insolvency and Bankruptcy Board of India (Board). Its role includes: (i) overseeing the functioning of insolvency intermediaries i.e., insolvency professionals, insolvency professional agencies and information utilities; and (ii) regulating the insolvency process.<br>
slide25. ANALYSIS OF PART –IV & V Insolvency Resolution Professionals
Role in Bankruptcy Process: They act as intermediaries who would play a key role in the efficient working of the bankruptcy process.
Role in resolution process: It verifies the claims of the creditors, constitutes a creditors committee, runs the debtor's business during the moratorium period and helps the creditors in reaching a consensus for a resolution plan.
In liquidation: They act as a liquidator and bankruptcy trustee
Information Utilities
Such utilities to collect, authenticate and disseminate financial information of debtors in centralised electronic databases as the code requires info. to be disseminated
ongoing basis.<br>
slide26. ANALYSIS OF PART –IV & V Part –V envisages “ Miscellaneous Provisions” of the Code.
Some important provisions under Miscellaneous Section are:
Insolvency & Bankruptcy Fund
Power of Central Government to issue directions.
Preparation of Annual Report by Board
Exclusion of jurisdiction of Civil Court
Provisions of this Code to override other laws.
The Central Government may, by notification, make rules for carrying out the provisions of this Code.<br>
slide27. DECODING THE LATEST DEVELOPMENTS PART-B<br>
slide28. http://ibbi.gov.in :-IBBI ONLINE PORTAL<br>
slide29. IBBI ONLINE PORTAL About Us Legal Framework Service Provider Examination Media<br>
slide30. IBBI ONLINE PORTAL About Us Legal Framework Service Provider Examination Media<br>
slide31. RULES & REGULATIONS VARIOUS RULES & REGULATIONS NOTIFIED
Insolvency and Bankruptcy Board of India (IBBI) (Insolvency Professionals agencies) Regulations, 2016 W.E.F 21.11.2016.
IBBI(Insolvency Professionals) Regulations, 2016 W.E.F 29.11.2016
IBBI (Insolvency Resolution Process For Corporate Persons) Regulations, 2016 W.E.F 1.12.2016 AT A GLANCE<br>
slide32. VARIOUS RULES & REGULATIONS NOTIFIED
IBBI (Application to Adjudicating Authority ) Rules, 2016 W.E.F 1.12.2016.
IBBI (Salary, Allowances & other Terms and Conditions of Service of Chairperson and members) Rules, 2016. W.E.F 29.08.2016. AT A GLANCE RULES & REGULATIONS<br>
slide33. VARIOUS SECTIONS VARIOUS SECTIONS NOTIFIED
Section 188 to 194 were notified W.E.F 5.08.2016.
Various Sections like, 221, 222, 225, 226, 230 , few sub clauses of Section 3 etc. were notified W.E.F 19.08.2016.
Various Sections like 196, 197 ,223, 244, 246-248, 252 etc. , few sub clauses of Section 3 etc. were notified W.E.F 01.11.2016. AT A GLANCE<br>
slide34. VARIOUS SECTIONS NOTIFIED
S. 199-207, 217-220 etc. were notified W.E.F 15.11.2016.
S.4-32, 60-77, 198, 231, 236-238 etc. were notified W.E.F 30.11.2016.
S. 33 to 54 notified W.E.F 15.12.2016. AT A GLANCE VARIOUS SECTIONS<br>
slide35. INSOLVENCY PROFESSIONALS AGENCIES REGULATIONS W.E.F 21.11.2016 These regulations lay out a framework for regulation of IPA . Some of the imp. regulations are –
Reg. 3: -Eligibility for registration:. Some of the requisites of IPA are-
∞ ICSI has been registered under the CODE to act as IPA.<br>
slide36. INSOLVENCY PROFESSIONALS REGULATIONS W.E.F 29.11.2016 Reg. 4:-Eligibility for registration: It lays out the criteria for registration as IP. For e.g. no individual shall be eligible to be regis. as an IP if minor, person resident outside India etc. .
Reg. 5:- Qualification & experience:<br>
slide37. IRP FOR CORPORATE PERSONS REGULATIONS IRPCP REGULATIONS, 2016 W.E.F 1.12.2016
Regulations notified are fairly comprehensive divided into X chapters & envisages 40 regulations These rules lay out a framework for Corporate Insolvency Resolution Process. Some of the imp. regulations are-<br>
slide38. R.3: Eligibility for Resolution professional(RP) : It specifies eligibility for RP. For e.g. RP shall not be a related party of the CD etc.
R.7:Claims by operational creditors (OC): OC shall submit proof of claim to the RP in FORM-B. Existence of debt due to the FC validated on the basis of the rec. available with an IU & other relevant Docs.
R. 8:Claims by financial creditors(FC): FC shall submit proof of claim to the RP in FORM-C.
R. 9: Claims by workmen & employees: To submit proof of claim to the RP in Form-D. Where there are dues to several workmen of the CD , AR to submit Form E. IRP FOR CORPORATE PERSONS REGULATIONS<br>
slide39. R.35:Liquidation Value:- It specifies mode & manner of reaching the liquidation value of the CD.
R.36: Info. Memorandum- RP shall submit Info. Memorandum . with req. details of CD to each member of committee.
R. 37 & 38: Resolution plan & it’s mandatory contents- It includes measures required for implementing resolution plan & its mandatory contents. IRP FOR CORPORATE PERSONS REGULATIONS<br>
slide40. APPLICATION TO ADJUDICATING AUTHORITY RULES, 2016 W.E.F 1.12.2016 These rules lay out a framework for app. to adjudicating authority for corp. persons w.r.t corp. insolvency resolution process. Some of the imp. rules are- Rule 4: Application by FC: FC to make an app. for initiating the CIRP against CD under S.7 of the Code in FORM-1.<br>
slide41. Rule 5:Demand notice by op. creditor: It specifies that OC shall deliver to CD a demand notice in Form No. 3 along with copy of invoice in Form no. 4.
Rule 6: Application by OC: OC, shall make an app. for initiating the CIRP against CD under S.9 of the Code in Form-5.
Rule 7: Application by Corp. Applicant : Corp. applicant shall make an app. for initiating the CIRP against CD under S.10 of the Code in Form-6.
Rule 9: Interim resolution professional : Applicant shall make an app. for appointing Interim resolution Professional in Form-2. APPLICATION TO ADJUDICATING AUTHORITY RULES, 2016.<br>
slide42. NOTIFIED SECTIONS REPEAL OF SICA W.E.F 01.12.16
SICA was a special legislation to revive sick companies. Further, to ensure expeditious enforcement proceedings BIFR was established.
Ministry of Finance, enforced SICA Repeal Act W.E.F 01.12.2016. Consequently, BIFR & AAIFR stand dissolved.
SICA Repeal Act amended vide by S.252 of the Code w.e.f. 01.11.16.
All proceedings b4 BIFR & AAIFR shall abate. Co. to initiate fresh proceedings before NCLT within 180 days of the commencement of the Insolvency Code in accordance with the rules/ regulations. & THE IMPACT<br>
slide43. NOTIFIED SECTIONS CONSTITUTION OF BOARD & INSTITUTIONAL INFRASTRUCTURE
IBBI constituted w.e.f 05.08.2016.Various provisions of it’s institutional infrastructure notified like-
Powers & functions of board,
Powers of chairperson,
Constitution of advisory committee, executive committee or othe committee, transitional provisions,
Functions & obligations of insolvency professionals,
Appointment of disciplinary committee.
Time-limit for completion of insolvency resolution process.
Moratorium
Trial of offences by special court & THE IMPACT<br>
slide44. NOTIFIED SECTIONS LIQUIDATION PROCESS (S.33-44)
Various provisions of Liquidation process under Part II related to CD have been notified w.e.f 15.12.16 like-
S. 33. Initiation of liquidation , S.34 .Appointment of liquidator and fee to be paid , S.35 Powers & duties of liquidator , S.36 Liquidation estate, S.37 Powers of liquidator to access information.
S. 38 Consolidation of claims, S. 39 Verification of claims, S.40 Admission or rejection of claims, S.41 Determination of valuation of claims. & THE IMPACT<br>
slide45. CONCLUSION The Code was enacted to consolidate & amend various laws relating to insolvency, bankruptcy, liquidation & further delete some infructuous provisions due to change in the business complexities, opening of economies & further participation of Foreign Investors in domestic arena.
With the government focus on ‘Ease of doing business’. It was imperative to adopt a new & uniform institutional framework to facilitate a formal and time bound insolvency resolution process & liquidation.<br>
slide46. A new chapter has been added in the history of insolvency, bankruptcy, liquidation litigation where a single window is given to the corporate litigants, individuals, LLP to adjudicate upon the matters complained off in a fast track mode.
This will not only change the landscape of Corporate litigation avenues but will also pave path of robust defaulted assets recovery. CONCLUSION<br>
csnesar367@gmail.com Mob: +91-9810044367
‘Sankalp’ C-227, Paryavaran Complex
New Delhi-110 030 THE INSOLVENCY AND BACKRUPCTY CODE, 2016 An overview...<br>
slide2. CONTENTS I. PART –A
OVERVIEW & ANALYSIS OF PART-I
ANALYSIS OF PART-II
ANALYSIS OF PART-III.
BRIEF ANALYSIS OF PART-IV & V<br>
slide3. CONTENTS PART –B
LATEST DEVELOPMENTS AT A GLANCE
DECEPHERING THE RULES.
DECEPHERING THE SECTIONS.
CONCLUSION.<br>
slide5. BACKGROUND Manifold laws & forums BIFR SICA 1985 INDUSTRIAL SICKNESS SARFAESI Act, 2002 RECONSTRUCTION OF FINANCIAL ASSETS REGULATE SECURITISATION DRT S.3(1) Recovery of Debts Due to Banks and Financial Institutions Act, 1993 To attain objectives Of SARFAESI Act.<br>
slide6. BACKGROUND Other erstwhile legislative framework<br>
slide7. BACKGROUND Around 70,000 insolvency & bankruptcy cases are pending in various forums with a lock-in of huge national wealth of Rs. 500,000 Crores.
Increasing statistics of NPA has also put a question on the country’s dispute resolution mechanism even though India’s GDP is growing year after year.
India ranks 136 out of 189 countries in the World Bank index on ‘Ease of Doing Business- resolving insolvencies. Need for Code<br>
slide8. BACKGROUND There was a dire need for a government to pass an uniform, comprehensive insolvency legislation to foster ease of doing business in Asia’s second largest economy.
Since, previous framework failed to aid lenders in effective and timely recovery or restructuring of defaulted assets .
Code enacted w.e.f. May 28th, 2016 to consolidate all existing laws and remove undue strain on the Indian credit system.
The Code is a historical development for economic reforms in India. Need for Code<br>
slide9. Consolidated Framework Multiple overlapping laws & adjudicating forums done away with since objectives set out in preamble of previous law(s) were not adequately met.
The effect of new code is seen as the Institutional infrastructure and implementing rules as envisaged under the code have been notified.<br>
slide10. MERITS OF THE CODE Better regulatory developments in conformity with global legislations .
Code would work as ‘Think Tank’ in achieving the objectives of ‘Ease of doing business’.
An uniform, comprehensive and time bound insolvency legislation for companies, LLP’s, partnerships and individuals .
The Code significantly changes the priority waterfall for distribution of liquidation proceeds.<br>
slide11. The Code is oriented towards ‘Creditor Control Approach’.
It recognises the difference between Operational Creditor & Financial Creditor.
It enables symmetry of information between creditors & debtors via Information utilities. MERITS OF THE CODE<br>
slide12. DECIPHERING THE CODE<br>
slide13. DECIPHERING THE CODE It envisages 255 Sections. The Code is divided into FIVE PARTS namely-6,<br>
slide14. DECIPHERING THE NEW CODE PART-I : Preliminary
28th May, 2016, APPLICABILITY OF CODE:<br>
slide15. DECIPHERING THE NEW CODE ☼ Few important definitions
“Board" means the Insolvency and Bankruptcy Board of India (IBBI) established under sub-section (1) of section 188;
“Corporate debtor" means a corporate person who owes a debt to any person;
“Insolvency professional" means a person enrolled under section 206 with an insolvency professional agency as its member and registered with the Board as an insolvency professional under section 207; PART-I : Preliminary
28th May, 2016,<br>
slide16. ANALYSIS OF PART -II AT A GLANCE<br>
slide17. ANALYSIS OF PART -II Applicability: Insolvency & liquidation of Corporate Debtors (CD) (Defined in Part-I).
Monetary default limit : Minimum INR 1,00,000.
Adj. Authority: NCLT constituted w.e.f. June 01, 2016.
Modes: The Code covers 2 independent stages:
Insolvency Resolution Process (‘IRP’), during which financial creditors assess whether the debtor's business is feasible to continue and the options for its rescue via RESOLUTION PLAN.<br>
slide18. ANALYSIS OF PART -II Liquidation, if the IRP fails or majority financial creditors decide to wind down and distribute the assets of the debtor.
IRP period: Period of 180 days beginning from the insolvency commencement date and ending on one hundred and eightieth day subject to extension of max. 90 days.
Salient features of IRP:
Who may apply for IRP to NCLT: Financial creditor/ operational creditor OR THE CD ITSELF may initiate corporate IRP in respect of such corporate debtor.
Moratorium: S.14 of Part-II provides for such Cooling-off period
Period of moratorium is the same as period of IRP.<br>
slide19. ANALYSIS OF PART -II What is the effect of Moratorium Period: Judicial proceedings for recovery, enforcement of security interest, sale or transfer of assets, or termination of essential contracts CAN’T take place against the CD during such period.
Resolution Professional(‘RP’):
S.16-20 deal with appointment, functions, duties of such professional.
NCLT appoints an RP to administer the IRP. Where the resolution professional, is proposed by F.C he/she shall be appointed as the interim resolution professional, if no disciplinary proceedings are pending against him.
The RP’s primary function is to take over the management of the corporate borrower and operate its business as a going concern.<br>
slide20. ANALYSIS OF PART -II Creditors Committee and Resolution Plan
RP identifies the financial creditors and constitutes a creditors committee. Each decision of the creditors committee requires a 75% majority vote.
The creditors committee considers proposals for the revival of the debtor and must decide whether to proceed with a revival plan or liquidation within a period of 180 days (subject to a one-time extension by 90 days)<br>
slide21. ANALYSIS OF PART -II ☼ “Liquidation Process” : ( Chapter III) : Corp. Debtors.
A corp. debtor may be subject to liquidation process if –
75% majority of the creditor's committee resolves to liquidate the corporate debtor at any time during the IRP;
The creditor's committee does not approve a resolution plan within 180 days (or within the extended 90 days);
The NCLT rejects the resolution plan submitted to it on technical grounds; or
The debtor contravenes the agreed resolution plan and an affected person makes an application to the NCLT to liquidate the corporate debtor.
∞ IRP for CP Reg. notified on 1.12.16 to be discussed later.<br>
slide22. ANALYSIS OF PART -III AT A GLANCE<br>
slide23. ANALYSIS OF PART -III Applicability: Part –III applies to matters relating to fresh start process, IRP & bankruptcy order for Individuals & Debtors.
Monetary default limit :To initiate an fresh start, insolvency & bankruptcy process under Part-III for the default should be at least INR 1000.
Adjudicating Authority: DRT
Modes: The Part covers 3 independent stages:
Fresh Start process
Insolvency Resolution Process
Bankruptcy Order<br>
slide24. ANALYSIS OF PART –IV & V Part-IV covers “Regulation of Insolvency Professionals, Agencies & Information Utilities”
The Insolvency Regulator
The Code provides for the constitution of a new insolvency regulator i.e., the Insolvency and Bankruptcy Board of India (Board). Its role includes: (i) overseeing the functioning of insolvency intermediaries i.e., insolvency professionals, insolvency professional agencies and information utilities; and (ii) regulating the insolvency process.<br>
slide25. ANALYSIS OF PART –IV & V Insolvency Resolution Professionals
Role in Bankruptcy Process: They act as intermediaries who would play a key role in the efficient working of the bankruptcy process.
Role in resolution process: It verifies the claims of the creditors, constitutes a creditors committee, runs the debtor's business during the moratorium period and helps the creditors in reaching a consensus for a resolution plan.
In liquidation: They act as a liquidator and bankruptcy trustee
Information Utilities
Such utilities to collect, authenticate and disseminate financial information of debtors in centralised electronic databases as the code requires info. to be disseminated
ongoing basis.<br>
slide26. ANALYSIS OF PART –IV & V Part –V envisages “ Miscellaneous Provisions” of the Code.
Some important provisions under Miscellaneous Section are:
Insolvency & Bankruptcy Fund
Power of Central Government to issue directions.
Preparation of Annual Report by Board
Exclusion of jurisdiction of Civil Court
Provisions of this Code to override other laws.
The Central Government may, by notification, make rules for carrying out the provisions of this Code.<br>
slide27. DECODING THE LATEST DEVELOPMENTS PART-B<br>
slide28. http://ibbi.gov.in :-IBBI ONLINE PORTAL<br>
slide29. IBBI ONLINE PORTAL About Us Legal Framework Service Provider Examination Media<br>
slide30. IBBI ONLINE PORTAL About Us Legal Framework Service Provider Examination Media<br>
slide31. RULES & REGULATIONS VARIOUS RULES & REGULATIONS NOTIFIED
Insolvency and Bankruptcy Board of India (IBBI) (Insolvency Professionals agencies) Regulations, 2016 W.E.F 21.11.2016.
IBBI(Insolvency Professionals) Regulations, 2016 W.E.F 29.11.2016
IBBI (Insolvency Resolution Process For Corporate Persons) Regulations, 2016 W.E.F 1.12.2016 AT A GLANCE<br>
slide32. VARIOUS RULES & REGULATIONS NOTIFIED
IBBI (Application to Adjudicating Authority ) Rules, 2016 W.E.F 1.12.2016.
IBBI (Salary, Allowances & other Terms and Conditions of Service of Chairperson and members) Rules, 2016. W.E.F 29.08.2016. AT A GLANCE RULES & REGULATIONS<br>
slide33. VARIOUS SECTIONS VARIOUS SECTIONS NOTIFIED
Section 188 to 194 were notified W.E.F 5.08.2016.
Various Sections like, 221, 222, 225, 226, 230 , few sub clauses of Section 3 etc. were notified W.E.F 19.08.2016.
Various Sections like 196, 197 ,223, 244, 246-248, 252 etc. , few sub clauses of Section 3 etc. were notified W.E.F 01.11.2016. AT A GLANCE<br>
slide34. VARIOUS SECTIONS NOTIFIED
S. 199-207, 217-220 etc. were notified W.E.F 15.11.2016.
S.4-32, 60-77, 198, 231, 236-238 etc. were notified W.E.F 30.11.2016.
S. 33 to 54 notified W.E.F 15.12.2016. AT A GLANCE VARIOUS SECTIONS<br>
slide35. INSOLVENCY PROFESSIONALS AGENCIES REGULATIONS W.E.F 21.11.2016 These regulations lay out a framework for regulation of IPA . Some of the imp. regulations are –
Reg. 3: -Eligibility for registration:. Some of the requisites of IPA are-
∞ ICSI has been registered under the CODE to act as IPA.<br>
slide36. INSOLVENCY PROFESSIONALS REGULATIONS W.E.F 29.11.2016 Reg. 4:-Eligibility for registration: It lays out the criteria for registration as IP. For e.g. no individual shall be eligible to be regis. as an IP if minor, person resident outside India etc. .
Reg. 5:- Qualification & experience:<br>
slide37. IRP FOR CORPORATE PERSONS REGULATIONS IRPCP REGULATIONS, 2016 W.E.F 1.12.2016
Regulations notified are fairly comprehensive divided into X chapters & envisages 40 regulations These rules lay out a framework for Corporate Insolvency Resolution Process. Some of the imp. regulations are-<br>
slide38. R.3: Eligibility for Resolution professional(RP) : It specifies eligibility for RP. For e.g. RP shall not be a related party of the CD etc.
R.7:Claims by operational creditors (OC): OC shall submit proof of claim to the RP in FORM-B. Existence of debt due to the FC validated on the basis of the rec. available with an IU & other relevant Docs.
R. 8:Claims by financial creditors(FC): FC shall submit proof of claim to the RP in FORM-C.
R. 9: Claims by workmen & employees: To submit proof of claim to the RP in Form-D. Where there are dues to several workmen of the CD , AR to submit Form E. IRP FOR CORPORATE PERSONS REGULATIONS<br>
slide39. R.35:Liquidation Value:- It specifies mode & manner of reaching the liquidation value of the CD.
R.36: Info. Memorandum- RP shall submit Info. Memorandum . with req. details of CD to each member of committee.
R. 37 & 38: Resolution plan & it’s mandatory contents- It includes measures required for implementing resolution plan & its mandatory contents. IRP FOR CORPORATE PERSONS REGULATIONS<br>
slide40. APPLICATION TO ADJUDICATING AUTHORITY RULES, 2016 W.E.F 1.12.2016 These rules lay out a framework for app. to adjudicating authority for corp. persons w.r.t corp. insolvency resolution process. Some of the imp. rules are- Rule 4: Application by FC: FC to make an app. for initiating the CIRP against CD under S.7 of the Code in FORM-1.<br>
slide41. Rule 5:Demand notice by op. creditor: It specifies that OC shall deliver to CD a demand notice in Form No. 3 along with copy of invoice in Form no. 4.
Rule 6: Application by OC: OC, shall make an app. for initiating the CIRP against CD under S.9 of the Code in Form-5.
Rule 7: Application by Corp. Applicant : Corp. applicant shall make an app. for initiating the CIRP against CD under S.10 of the Code in Form-6.
Rule 9: Interim resolution professional : Applicant shall make an app. for appointing Interim resolution Professional in Form-2. APPLICATION TO ADJUDICATING AUTHORITY RULES, 2016.<br>
slide42. NOTIFIED SECTIONS REPEAL OF SICA W.E.F 01.12.16
SICA was a special legislation to revive sick companies. Further, to ensure expeditious enforcement proceedings BIFR was established.
Ministry of Finance, enforced SICA Repeal Act W.E.F 01.12.2016. Consequently, BIFR & AAIFR stand dissolved.
SICA Repeal Act amended vide by S.252 of the Code w.e.f. 01.11.16.
All proceedings b4 BIFR & AAIFR shall abate. Co. to initiate fresh proceedings before NCLT within 180 days of the commencement of the Insolvency Code in accordance with the rules/ regulations. & THE IMPACT<br>
slide43. NOTIFIED SECTIONS CONSTITUTION OF BOARD & INSTITUTIONAL INFRASTRUCTURE
IBBI constituted w.e.f 05.08.2016.Various provisions of it’s institutional infrastructure notified like-
Powers & functions of board,
Powers of chairperson,
Constitution of advisory committee, executive committee or othe committee, transitional provisions,
Functions & obligations of insolvency professionals,
Appointment of disciplinary committee.
Time-limit for completion of insolvency resolution process.
Moratorium
Trial of offences by special court & THE IMPACT<br>
slide44. NOTIFIED SECTIONS LIQUIDATION PROCESS (S.33-44)
Various provisions of Liquidation process under Part II related to CD have been notified w.e.f 15.12.16 like-
S. 33. Initiation of liquidation , S.34 .Appointment of liquidator and fee to be paid , S.35 Powers & duties of liquidator , S.36 Liquidation estate, S.37 Powers of liquidator to access information.
S. 38 Consolidation of claims, S. 39 Verification of claims, S.40 Admission or rejection of claims, S.41 Determination of valuation of claims. & THE IMPACT<br>
slide45. CONCLUSION The Code was enacted to consolidate & amend various laws relating to insolvency, bankruptcy, liquidation & further delete some infructuous provisions due to change in the business complexities, opening of economies & further participation of Foreign Investors in domestic arena.
With the government focus on ‘Ease of doing business’. It was imperative to adopt a new & uniform institutional framework to facilitate a formal and time bound insolvency resolution process & liquidation.<br>
slide46. A new chapter has been added in the history of insolvency, bankruptcy, liquidation litigation where a single window is given to the corporate litigants, individuals, LLP to adjudicate upon the matters complained off in a fast track mode.
This will not only change the landscape of Corporate litigation avenues but will also pave path of robust defaulted assets recovery. CONCLUSION<br>