Bloomsbury’s The Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

CONTENTS AT A GLANCE THE INSOLVENCYAND BANKRUPTCY CODE -- The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 . . . . . . . . . . 1 -- The Insolvency and Bankruptcy Code (Amendment) Act, 2018. . . . . . . . . . . . . . . 19 -- The Insolvency and Bankruptcy Code, 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

RULES AND REGULATIONS -- Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 -- IBBI (Salary, Allowances and other Terms and Conditions of Service of Chairperson and members) Rules, 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 -- Companies (Transfer of Pending Proceedings) Rules, 2016. . . . . . . . . . . . . . . . . 233 -- Insolvency and Bankruptcy Board of India (Annual Report) Rules, 2018 . . . . . . 237 -- Insolvency and Bankruptcy Board of India (Form of Annual Statement of Accounts) Rules, 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239 -- IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 -- IBBI (Insolvency Professional Agencies) Regulations, 2016 . . . . . . . . . . . . . . . . 279 -- IBBI (Insolvency Professionals) Regulations, 2016 . . . . . . . . . . . . . . . . . . . . . . . 291 -- IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313 -- IBBI (Liquidation Process) Regulations, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . 359 -- IBBI (Engagement of Research Associates and Consultants) Regulations, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 -- IBBI (Procedure for Governing Board Meetings) Regulations, 2017. . . . . . . . . . 415 -- IBBI (Advisory Committee) Regulations, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . 425 -- IBBI (Information Utilities) Regulations, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . 429 -- IBBI (Voluntary Liquidation Process) Regulations, 2017. . . . . . . . . . . . . . . . . . . 457 -- IBBI (Inspection and Investigation) Regulations, 2017. . . . . . . . . . . . . . . . . . . . . 495 -- IBBI (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507 -- IBBI (Grievance and Complaint Handling Procedure) Regulations, 2017 . . . . . . 549 -- IBBI (Employees’ Service) Regulations, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . 557

v

Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

NOTIFICATIONS, CIRCULARS, ORDERS, GUIDELINES AND LIST OF PRESS RELEASES

Notifications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 593 Circulars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615 Orders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 659 Guidelines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669 List of Press releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 705

INFORMATION UTILITIES EXPLAINED. . . . . . . . . . . . . . . . . . . . . . 707

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The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Amendment of section 3.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Amendment of section 5.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Amendment of section 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Amendment of section 8.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Amendment of section 9.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Amendment of section 10.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Amendment of section 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Insertion of new section 12A.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Amendment of section 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Amendment of section 15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Amendment of section 16.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Amendment of section 17.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Amendment of section 18.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Amendment of section 21.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Amendment of section 22.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Amendment of section 23.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Amendment of section 24.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Insertion of new section 25A.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Amendment of section 27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Amendment of section 28.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Amendment of section 29A.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Amendment of section 30.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Amendment of section 31.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Amendment of section 33.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Amendment of section 34.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Amendment of section 42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Amendment of section 45.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Amendment of section 60.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Amendment of section 69.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Amendment of section 76.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Amendment of section 196.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Amendment of section 231.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Insertion of new section 238A.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Amendment of section 239.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Amendment of section 240.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Insertion of new section 240A.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Insertion of new Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Amendment of section 434 of Act 18 of 2013.. . . . . . . . . . . . . . . . . . . . . . . . . 17 vii

Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

The Insolvency and Bankruptcy Code (Amendment) Act, 2018 . . . 19

1.

2.

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4.

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Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Amendment of section 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Amendment of section 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Amendment of section 25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Insertion of new section 29A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Amendment of section 30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Amendment of section 35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Insertion of new section 235A.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Amendment of section 240. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Repeal and savings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

The Insolvency and Bankruptcy Code, 2016 Part I Preliminary 1.

Short title, extent and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 2. Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Part II Insolvency Resolution and Liquidation for Corporate Persons Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 4.

Application of this Part. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 5.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Chapter II Corporate Insolvency Resolution Process. . . . . . . . . . . . . . . . . . . . . 37 6.

Persons who may initiate corporate insolvency resolution process . . . . . . . . . 37 Initiation of corporate insolvency resolution process by financial creditor . . . 38 7.

8.

Insolvency resolution by operational creditor. . . . . . . . . . . . . . . . . . . . . . . . . . 39 9.

Application for initiation of corporate insolvency resolution process by operational creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 10. Initiation of corporate insolvency resolution process by corporate applicant. . 42 11. Persons not entitled to make application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 12. Time-limit for completion of insolvency resolution process. . . . . . . . . . . . . . . 43 12A Withdrawal of application under section 7, 9 or 10.. . . . . . . . . . . . . . . . . . . . . 44 13. Declaration of moratorium and public announcement . . . . . . . . . . . . . . . . . . . 44 14. Moratorium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 15. Public announcement of corporate insolvency resolution process. . . . . . . . . . 45 16. Appointment and tenure of interim resolution professional. . . . . . . . . . . . . . . 46 17. Management of affairs of corporate debtor by interim resolution professional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 18. Duties of interim resolution professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 19. Personnel to extend co-operation to interim resolution professional . . . . . . . . 49 viii

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20. Management of operations of corporate debtor as going concern. . . . . . . . . . . 49 21. Committee of creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 22. Appointment of resolution professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 23. Resolution professional to conduct corporate insolvency resolution process. . 54 24. Meeting of committee of creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 25. Duties of resolution professional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 25A Rights and duties of authorized representative of ďŹ nancial creditors.. . . . . . . . 56 26. Application for avoidance of transactions not to affect proceedings . . . . . . . . 57 27. Replacement of resolution professional by committee of creditors . . . . . . . . . 57 28. Approval of committee of creditors for certain actions. . . . . . . . . . . . . . . . . . . 58 29. Preparation of information memorandum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 29A. Persons not eligible to be resolution applicant.. . . . . . . . . . . . . . . . . . . . . . . . . 60 30. Submission of resolution plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 31. Approval of resolution plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 32. Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Chapter III Liquidation Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 33. Initiation of liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 34. Appointment of liquidator and fee to be paid. . . . . . . . . . . . . . . . . . . . . . . . . . 69 35. Powers and duties of liquidator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 36. Liquidation estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 37. Powers of liquidator to access information. . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 38. Consolidation of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 39. Verification of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 40. Admission or rejection of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 41. Determination of valuation of claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 42. Appeal against the decision of liquidator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 43. Preferential transactions and relevant time. . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 44. Orders in case of preferential transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 45. Avoidance of undervalued transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 46. Relevant period for avoidable transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 47. Application by creditor in cases of undervalued transactions. . . . . . . . . . . . . . 79 48. Order in cases of undervalued transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 49. Transactions defrauding creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 50. Extortionate credit transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 51. Orders of Adjudicating Authority in respect of extortionate credit transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 52. Secured creditor in liquidation proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 53. Distribution of assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 54. Dissolution of corporate debtor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Chapter IV Fast Track Corporate Insolvency Resolution Process . . . . . . . . . . . 84 55. Fast track corporation insolvency resolution process. . . . . . . . . . . . . . . . . . . . 84 56. Time period for completion of fast track corporate insolvency resolution process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 57. Manner of initiating fast track corporate insolvency resolution process . . . . . 85 ix

Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

58.

Applicability of Chapter II to this Chapter. . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Chapter V Voluntary Liquidation of Corporate Persons . . . . . . . . . . . . . . . . . . 86 59. Voluntary liquidation of corporate persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Chapter VI Adjudicating Authority for Corporate Persons. . . . . . . . . . . . . . . . . 87 60. Adjudicating Authority for corporate persons. . . . . . . . . . . . . . . . . . . . . . . . . . 87 61. Appeals and Appellate Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 62. Appeal to Supreme Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 63. Civil court not to have jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 64. Expeditious disposal of applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 65. Fraudulent or malicious initiation of proceedings. . . . . . . . . . . . . . . . . . . . . . . 90 66. Fraudulent trading or wrongful trading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 67. Proceedings under section 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Chapter VII Offences and Penalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 68. Punishment for concealment of property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 69. Punishment for transactions defrauding creditors. . . . . . . . . . . . . . . . . . . . . . . 93 70. Punishment for misconduct in course of corporate insolvency resolution process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 71. Punishment for falsification of books of corporate debtor . . . . . . . . . . . . . . . . 95 72. Punishment for wilful and material omissions from statements relating to affairs of corporate debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 73. Punishment for false representations to creditors. . . . . . . . . . . . . . . . . . . . . . . 95 74. Punishment for contravention of moratorium or the resolution plan . . . . . . . . 95 75. Punishment for false information furnished in application. . . . . . . . . . . . . . . . 96 76. Punishment for non- disclosure of dispute or [payment] of debt by operational creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 77. Punishment for providing false information in application made by corporate debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 Part III Insolvency Resolution and Bankruptcy for Individuals and Partnership Firms Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 78. Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 79. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Chapter II Fresh Start Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 80. Eligibility for making an application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 81. Application for fresh start order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 82. Appointment of resolution professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 83. Examination of application by resolution professional. . . . . . . . . . . . . . . . . . 103 84. Admission or rejection of application by Adjudicating Authority . . . . . . . . . 104 85. Effect of admission of application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 86. Objections by creditor and their examination by resolution professional. . . . 105 x

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92.

93.

Application against decision of resolution professional. . . . . . . . . . . . . . . . . 106 General duties of debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Replacement of resolution professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Directions for compliances of restrictions, etc . . . . . . . . . . . . . . . . . . . . . . . . 107 Revocation of order admitting application . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Discharge order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 Standard of conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

Chapter III Insolvency Resolution Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 94. Application by debtor to initiate insolvency resolution process. . . . . . . . . . . 108 95. Application by creditor to initiate insolvency resolution process. . . . . . . . . . 109 96. Interim-moratorium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 97. Appointment of resolution professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 98. Replacement of resolution professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 99. Submission of report by resolution professional. . . . . . . . . . . . . . . . . . . . . . . 112 100. Admission or rejection of application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 101. Moratorium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 102. Public notice and claims from creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 103. Registering of claims by creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 104. Preparation of list of creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 105. Repayment plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 106. Report of resolution professional on repayment plan. . . . . . . . . . . . . . . . . . . 115 107. Summoning of meeting of creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 108. Conduct of meeting of creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 109. Voting rights in meeting of creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 110. Rights of secured creditors in relation to repayment plan. . . . . . . . . . . . . . . . 117 111. Approval of repayment plan by creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 112. Report of meeting of creditors on repayment plan . . . . . . . . . . . . . . . . . . . . . 117 113. Notice of decisions taken at meeting of creditors. . . . . . . . . . . . . . . . . . . . . . 118 114. Order of Adjudicating Authority on repayment plan. . . . . . . . . . . . . . . . . . . . 118 115. Effect of order of Adjudicating Authority on repayment plan. . . . . . . . . . . . . 118 116. Implementation and supervision of repayment plan. . . . . . . . . . . . . . . . . . . . 119 117. Completion of repayment plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 118. Repayment plan coming to end prematurely. . . . . . . . . . . . . . . . . . . . . . . . . . 119 119. Discharge order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 120. Standard of conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 Chapter IV Bankruptcy Order for Individuals and Partnership Firms. . . . . . 120 121. Application for bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 122. Application by debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 123. Application by creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 124. Effect of application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 125. Appointment of insolvency professional as bankruptcy trustee. . . . . . . . . . . 122 126. Bankruptcy order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 127. Validity of bankruptcy order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 xi

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129.

130.

131.

132.

133.

134.

135.

136.

137.

138.

139.

140.

141.

142.

143.

144.

145.

146.

147.

148.

Effect of bankruptcy order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Statement of financial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Public notice inviting claims from creditors. . . . . . . . . . . . . . . . . . . . . . . . . . 124 Registration of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Preparation of list of creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Summoning of meeting of creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Conduct of meeting of creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 Voting rights of creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 Administration and distribution of estate of bankrupt. . . . . . . . . . . . . . . . . . . 127 Completion of administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Discharge order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Effect of discharge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Disqualification of bankrupt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Restrictions on bankrupt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Modification or recall of bankruptcy order. . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Standard of conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Fees of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Replacement of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Resignation by bankruptcy trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Vacancy in office of bankruptcy trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 Release of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

Chapter V Administration and Distribution of the Estate of the Bankrupt. . 132 149. Functions of bankruptcy trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 150. Duties of bankrupt towards bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . 133 151. Rights of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 152. General powers of bankruptcy trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 153. Approval of creditors for certain acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 154. Vesting of estate of bankrupt in bankruptcy trustee . . . . . . . . . . . . . . . . . . . . 135 155. Estate of bankrupt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 156. Delivery of property and documents to bankruptcy trustee . . . . . . . . . . . . . . 135 157. Acquisition of control by bankruptcy trustee . . . . . . . . . . . . . . . . . . . . . . . . . 136 158. Restrictions on disposition of property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 159. After-acquired property of bankrupt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 160. Onerous property of bankrupt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 161. Notice to disclaim onerous property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 162. Disclaimer of leaseholds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 163. Challenge against disclaimed property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 164. Undervalued transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 165. Preference transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 166. Effect of order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 167. Extortionate credit transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 168. Obligations under contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 169. Continuance of proceedings on death of bankrupt . . . . . . . . . . . . . . . . . . . . . 142 170. Administration of estate of deceased bankrupt. . . . . . . . . . . . . . . . . . . . . . . . 143 xii

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172.

173.

174.

175.

176.

177.

178.

Proof of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Proof of debt by secured creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Mutual credit and set-off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Distribution of interim dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Distribution of property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Final dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Claims of creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 Priority of payment of debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

Chapter VI Adjudicating Authority for Individuals and Partnership Firms. . 148 179. Adjudicating Authority for individuals and partnership firms. . . . . . . . . . . . . 148 180. Civil court not to have jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 181. Appeal to Debt Recovery Appellate Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . 149 182. Appeal to Supreme Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 183. Expeditious disposal of applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Chapter VII Offences and Penalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 184. Punishment for false information, etc., by creditor in insolvency resolution process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 185. Punishment for contravention of provisions. . . . . . . . . . . . . . . . . . . . . . . . . . 150 186. Punishment for false information, concealment, etc., by bankrupt. . . . . . . . . 150 187. Punishment for certain actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 Part IV Regulation of Insolvency Professionals, Agencies and Information Utilities Chapter I The Insolvency and Bankruptcy Board of India. . . . . . . . . . . . . . . 152 188. Establishment and incorporation of Board . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 189. Constitution of Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 190. Removal of member from office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 191. Powers of Chairperson. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 192. Meetings of Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 193. Member not to participate in meetings in certain cases. . . . . . . . . . . . . . . . . . 154 194. Vacancies, etc., not to invalidate proceedings of Board, Officers and employees of Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 195. Power to designate financial sector regulator . . . . . . . . . . . . . . . . . . . . . . . . . 155 Chapter II Powers and Functions of the Board. . . . . . . . . . . . . . . . . . . . . . . . . 155 196. Powers and functions of Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 197. Constitution of advisory committee, executive committee or other committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 198. Condonation of delay. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Chapter III Insolvency Professional Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 199. No person to function as insolvency professional agency without valid certificate of registration.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 xiii

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200.

201.

202.

203.

204.

205.

Principles governing registration of insolvency professional agency. . . . . . . 159 Registration of insolvency professional agency . . . . . . . . . . . . . . . . . . . . . . . 159 Appeal to National Company Law Appellate Tribunal. . . . . . . . . . . . . . . . . . 160 Governing Board of insolvency professional agency. . . . . . . . . . . . . . . . . . . 160 Functions of insolvency professional agencies. . . . . . . . . . . . . . . . . . . . . . . . 161 Insolvency professional agencies to make bye-laws. . . . . . . . . . . . . . . . . . . . 161

Chapter IV Insolvency Professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 206. Enrolled and registered persons to act as insolvency professionals . . . . . . . . 161 207. Registration of insolvency professionals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 208. Functions and obligations of insolvency professionals. . . . . . . . . . . . . . . . . . 162 Chapter V Information Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 209. No person to function as information utility without certificate of registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 210. Registration of information utility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 211. Appeal to National Company Law Appellate Tribunal. . . . . . . . . . . . . . . . . . 164 212. Governing Board of information utility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 213. Core services, etc., of information utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . 164 214. Obligations of information utility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 215. Procedure for submission, etc., of financial information. . . . . . . . . . . . . . . . . 165 216. Rights and obligations of persons submitting financial information. . . . . . . . 165 Chapter VI Inspection and Investigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 217. Complaints against insolvency professional agency or its member or information utility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 218. Investigation of insolvency professional agency or its member or information utility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 219. Show cause notice to insolvency professional agency or its member or information utility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 220. Appointment of disciplinary committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 Chapter VII Finance, Accounts and Audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 221. Grants by Central Government. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 222. Board’s Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 223. Accounts and audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Part V Miscelleneous 224. Insolvency and Bankruptcy Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 225. Power of Central Government to issue directions. . . . . . . . . . . . . . . . . . . . . . 170 226. Power of Central Government to supersede Board. . . . . . . . . . . . . . . . . . . . . 170 227. Power of Central Government to notify financial service providers, etc.. . . . 172 228. Budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 229. Annual report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 230. Delegation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 xiv

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231. Bar of jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 232. Members, officers and employees of Board to the public servants. . . . . . . . . 173 233. Protection of action taken in good faith. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 234. Agreements with foreign countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 235. Letter of request to a country outside India in certain cases. . . . . . . . . . . . . . 173 235A. Punishment where no specific penalty or punishment is provided. . . . . . . . . 174 236. Trial of offences by Special Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 237. Appeal and revision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 238. Provisions of this Code to override other laws. . . . . . . . . . . . . . . . . . . . . . . . 175 238A. Limitation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 239. Power to make rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 240. Power to make regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 240A Application of this Code to micro, small and medium enterprises. . . . . . . . . 183 241. Rules and regulations to be laid before Parliament. . . . . . . . . . . . . . . . . . . . . 184 242. Power to remove difficulties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 243. Repeal of certain enactments and savings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 244. Transitional provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 245. Amendments of Act 9 of 1932. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 246. Amendments of Act 1 of 1944. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 247. Amendments of Act 43 of 1961. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 248. Amendments of Act 52 of 1962. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 249. Amendments of Act 51 of 1993. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 250. Amendments of Act 32 of 1994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 251. Amendments of Act 54 of 2002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 252. Amendments of Act 1 of 2004. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 253. Amendments of Act 51 of 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 254. Amendments of Act 6 of 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 255. Amendment of Act 18 of 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 The First Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 The Second Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 The Third Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 The Fourth Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 The Fifth Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 The Sixth Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 The Seventh Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 The Eighth Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 The Ninth Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 The Tenth Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 The Eleventh Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 The Twelfth Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203

xv

Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

RULES AND REGULATIONS

Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016

1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 2. Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 3.

4.

Application by financial creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 5.

Demand notice by operational creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 6.

Application by operational creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 7.

Application by corporate applicant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 8.

Withdrawal of application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 9.

Interim resolution professional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 10. Filing of application and application fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Form 1 Application by Financial Creditor(s) to Initiate Corporate Insolvency Resolution Process under the Code. . . . . . . . . . . . . . . . . . . . . 209 Form 2 Written Communication by Proposed Interim Resolution Professional . . 212 Form 3 Form of Demand Notice/Invoice Demanding Payment under the Insolvency and Bankruptcy Code, 2016 . . . . . . . . . . . . . . . . . . 214 Form 4 Form of Notice with which Invoice Demanding Payment is to be Attached. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216 Form 5 Application by Operational Creditor to Initiate Corporate Insolvency Resolution Process under the Code. . . . . . . . . . . . . . . . . . . . . 217 Form 6 Application by Corporate Applicant to Initiate Corporate Insolvency Resolution Process under the Code. . . . . . . . . . . . . . . . . . . . . 221 Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225

IBBI (Salary, Allowances and other Terms and Conditions of Service of Chairperson and members) Rules, 2016

1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 3.

Terms and conditions of service of Chairperson and members. . . . . . . . . . . . 227 4. Pay. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228 5.

Dearness Allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228 6.

Entertainment Allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228 7. Leave. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228 8.

Leave Sanctioning Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 9.

Provident Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 10. Travelling Allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 11. Leave Travel Concession. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 12. Accommodation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 13. Conveyance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 xvi

Table of contents

14. Bonus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 15. Sitting Fees and Board’s Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 16. Encashment of Leave. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 17. Facilities for medical treatment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 18. Residuary Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 19. Terms and Conditions of Services of Part-time Members. . . . . . . . . . . . . . . . 231 20. Fee and Allowances of Part-time Members. . . . . . . . . . . . . . . . . . . . . . . . . . . 231 21. Power to Relax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232

1.

2.

3.

4.

5.

6.

7.

8.

Companies (Transfer of Pending Proceedings) Rules, 2016

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 Transfer of pending proceedings relating to cases other than Winding up. . . 233 Pending proceeding relating to voluntary winding up. . . . . . . . . . . . . . . . . . . 234 Transfer of pending proceedings of Winding up on the ground of inability to pay debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234 Transfer of pending proceedings of Winding up matters on the grounds other than inability to pay debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 Transfer of Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 Fees not to be paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235

Insolvency and Bankruptcy Board of India (Annual Report) Rules, 2018

1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237 3.

Form of Annual Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237 4.

Time of furnishing of the Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237 Form of the Annual Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238

Insolvency and Bankruptcy Board of India (Form of Annual Statement of Accounts) Rules, 2018

1.

Short title and commencement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239 2.

Definitions: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239 3.

Maintenance of accounts and records:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239 4.

Preparation and submission of annual statement of accounts of the Board:. . 240 Form of Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241 Form ‘C’ Receipt and Payment Accounts for the Period/Year Ended ______ . . . . . 242 Form ‘B’ Income and Expenditure Account for the Period/Year Ended ______ . . . 244 Schedule - I Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 Schedule – II Reserves and Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 Schedule – III Earmarked/Endowment Funds. . . . . . . . . . . . . . . . . . . . . . . . . . 247 Schedule – IV Secured Loans and Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . 248 Schedule – V Unsecured Loans and Borrowings . . . . . . . . . . . . . . . . . . . . . . . 249 xvii

Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

Schedule – VI Schedule – VII Schedule – VIII Schedule – IX Schedule – X Schedule – XI Schedule – XII Schedule – XIII Schedule – XIV Schedule – XV Schedule – XVI Schedule – XVII Schedule – XVIII Schedule – XIX Schedule – XX Schedule – XXI Schedule – XXII Schedule – XXIII

Deferred Credit Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 Current Liabilities and Provisions . . . . . . . . . . . . . . . . . . . . . . . 250 Fixed Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 Investments from Earmarked/Endowment Funds. . . . . . . . . . . . 252 Investments – Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 Current Assets, Loans, Advances etc.. . . . . . . . . . . . . . . . . . . . . 253 Grants/Subsidies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 Fees/Subscriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255 Income from Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255 Income from Royalty, Publication etc. . . . . . . . . . . . . . . . . . . . . 256 Interest Earned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256 Other Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257 Establishment Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258 Other Adnimistrative Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 258 Expenditure on Grants, Subsidies etc.. . . . . . . . . . . . . . . . . . . . . 259 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260 Significant Accounting Policies (illustrative). . . . . . . . . . . . . . . 260 Contingent Liabilities and Notes on Accounts (illustrative). . . . 262

IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 Chapter II Bye Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266 Insolvency professional agencies to have Bye-Laws . . . . . . . . . . . . . . . . . . . 266 3.

4.

Amendment of Bye-Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266 Chapter III Governing Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266 5.

Composition of the Governing Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266 Schedule Model Bye-Laws of an Insolvency Professional Agency. . . . . . . . . . . . . . 268 Annexure Form A Certificate of Professional Membership. . . . . . . . . . . . . . . 278

IBBI (Insolvency Professional Agencies) Regulations, 2016 Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 1.

2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 Chapter II Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280 3.

Eligibility for registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280 4.

Application for registration or renewal thereof. . . . . . . . . . . . . . . . . . . . . . . . 280 xviii

Table of contents

5.

6.

Grant of certificate of registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281 Procedure for rejecting application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282

Chapter III Surrender or Cancellation of Registration. . . . . . . . . . . . . . . . . . . . 282 Surrender of registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282 7.

8.

Disciplinary proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283 9. Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285 Chapter IV In-Principle Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285 10. Grant of in-principle approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285 Form A Application for Certificate of Registration . . . . . . . . . . . . . . . . . . . . . . . . 286 Form B The Insolvency and Bankruptcy Board of India. . . . . . . . . . . . . . . . . . . . . 290

IBBI (Insolvency Professionals) Regulations, 2016 Chapter I General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291 1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291 Chapter II Insolvency Examinations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292 3. [No regulation heading provided]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292 Chapter III Registration of Insolvency Professionals. . . . . . . . . . . . . . . . . . . . . 292 4. Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292 5.

Qualifications and experience. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293 6.

Application for certificate of registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294 7.

Certificate of registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294 8.

Refusal to grant certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295 9.

Registration for a limited period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 Chapter IV Temporary Surrender and Disciplinary Proceedings. . . . . . . . . . . 297 10. Temporary surrender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 11. Disciplinary proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 Chapter V Recognition of Insolvency Professional Entities. . . . . . . . . . . . . . . 299 12. Recognition of Insolvency Professional Entities. . . . . . . . . . . . . . . . . . . . . . . 299 13. [No regulation heading provided]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 14. [No regulation heading provided]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 First Schedule Code of Conduct for Insolvency Professionals. . . . . . . . . . . . . . 301 Second Schedule Code of Conduct for Insolvency Professionals. . . . . . . . . . . . . . 305 Form A Application for Registration as an Insolvency Professional. . . . . . . . . . . 305 Form B Insolvency and Bankruptcy Board of India Certificate of Registration. . . 310 Form C [No heading provided]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311 Form D Insolvency and Bankruptcy Board of India Certificate of Recognition. . . 312

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IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313 1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313 Chapter II General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 3.

Eligibility for resolution professional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 4.

Access to books. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 5.

Extortionate credit transaction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 Chapter III Public Announcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 6.

Public announcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 Chapter IV Proof of Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 7.

Claims by operational creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 8.

Claims by financial creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 9.

Claims by workmen and employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 9A. Claims by other creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 10. Substantiation of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 11. Cost of proof. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 12. Submission of proof of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 13. Verification of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320 14. Determination of amount of claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320 15. Debt in foreign currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320 Chapter V Committee of Creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 16. Committee with only operational creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . 321 17. First meeting of the committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 18. Meetings of the committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 Chapter VI Meetings of the Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 19. Notice for meetings of the committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 20. Service of notice by electronic means. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 21. Contents of the notice for meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323 22. Quorum at the meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324 23. Participation through video conferencing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 324 24. Conduct of meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325 Chapter VII Voting by the Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 25. Voting by the committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 26. Voting through electronic means. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326 Chapter VIII Conduct of Corporate Insolvency Resolution Process. . . . . . . . . . 327 27. Appointment of registered valuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327 28. Transfer of debt due to creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328 29. Sale of assets outside the ordinary course of business . . . . . . . . . . . . . . . . . . 328 30. Assistance of local district administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 328 xx

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Chapter IX Insolvency Resolution Process Costs . . . . . . . . . . . . . . . . . . . . . . . . 328 31. Insolvency resolution process costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328 32. Essential supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 33. Costs of the interim resolution professional . . . . . . . . . . . . . . . . . . . . . . . . . . 329 34. Resolution professional costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 34A. Disclosure of Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 Chapter X Resolution Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 35. Fair Value and Liquidation value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 35A. Identification of Resolution Applicant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 36. Information memorandum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 36A. Invitation of Resolution Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334 37. Resolution plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334 38. Mandatory contents of the resolution plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 335 39. Approval of resolution plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337 40. Extension of the corporate insolvency resolution process period. . . . . . . . . . 339 Form A Public Announcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340 Form B Proof of Claim by Operational Creditors Except Workmen and Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341 Form C Proof of Claim by Financial Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 Form D Proof of Claim by a Workman or an Employee. . . . . . . . . . . . . . . . . . . . . 348 Form E Proof of Claim Submitted by Authorised Representative of Workmen and Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351

IBBI (Liquidation Process) Regulations, 2016 Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359 1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359 Chapter II Appointment and Remuneration of Liquidator . . . . . . . . . . . . . . . 361 3.

Eligibility for appointment as liquidator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361 4.

Liquidator’s fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361 Chapter III Powers and Functions of Liquidator . . . . . . . . . . . . . . . . . . . . . . . . 362 5. Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362 6.

Registers and books of account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363 7.

Appointment of professionals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364 8.

Consultation with stakeholders.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364 9.

Personnel to extend cooperation to liquidator. . . . . . . . . . . . . . . . . . . . . . . . . 365 10. Disclaimer of onerous property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365 11. Extortionate credit transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366 Chapter IV General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366 12. Public announcement by liquidator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366 13. Preliminary report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367 xxi

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14.

15.

Early dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367 Progress reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368

Chapter V Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 16. Proof of claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 17. Claims by operational creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 18. Claims by financial creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 19. Claims by workmen and employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371 20. Claims by other stakeholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371 21. Proving security interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372 22. Production of bills of exchange and promissory notes. . . . . . . . . . . . . . . . . . 372 23. Substantiation of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372 24. Cost of proof. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372 25. Determination of quantum of claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 26. Debt in foreign currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 27. Periodical payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 28. Debt payable at future time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 29. Mutual credits and set-off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 30. Verification of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374 31. List of stakeholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374 Chapter VI Realisation of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 32. Manner of sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 33. Mode of sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 34. Asset memorandum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376 35. Valuation of assets intended to be sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377 36. Asset sale report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377 37. Realization of security interest by secured creditor. . . . . . . . . . . . . . . . . . . . . 377 38. Distribution of unsold assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378 39. Recovery of monies due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378 40. Liquidator to realize uncalled capital or unpaid capital contribution. . . . . . . 378 Chapter VII Proceeds of Liquidation and Distribution of Proceeds. . . . . . . . . . 379 41. All money to be paid in to bank account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379 42. Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379 43. Return of money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 44. Completion of liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 45. Final report prior to dissolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 46. Unclaimed proceeds of liquidation or undistributed assets. . . . . . . . . . . . . . . 380 Schedule I Mode of Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 Form A Proforma for Reporting Consultations with Stakeholders. . . . . . . . . . 384 Form B Public Announcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384 Form C Proof of Claim by Operational Creditors Except Workmen and Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 Form D Proof of Claim by Financial Creditors . . . . . . . . . . . . . . . . . . . . . . . . 389 xxii

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Form E Proof of Claim by a Workman or Employee. . . . . . . . . . . . . . . . . . . . .

Form F Proof of Claim by Authorised Representative of Workmen or Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Form G Proof of Claim by any other Stakeholder. . . . . . . . . . . . . . . . . . . . . . .

Schedule III Formats of registers and books to be maintained under regulation 6(2)... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

392 394 397 400

IBBI (Engagement of Research Associates and Consultants) Regulations, 2017

1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 3.

Research Associates and Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 4.

Functions of Research Associates and Consultants. . . . . . . . . . . . . . . . . . . . . 410 5.

Qualifications, experience and remuneration . . . . . . . . . . . . . . . . . . . . . . . . . 410 6.

Evaluation of performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410 7.

Selection of Research Associates and Consultants. . . . . . . . . . . . . . . . . . . . . 410 8.

Terms and condition of engagement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 9.

Power to relax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412 Schedule I Eligibility for Research Associates and Consultants for different disciplines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413 Schedule II Levels for Research Associates and Consultant. . . . . . . . . . . . . . . . . 414

IBBI (Procedure for Governing Board Meetings) Regulations, 2017 Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415 1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415 Chapter II Businesses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416 3.

Governing Board Businesses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416 Chapter III Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417 4.

Convening of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417 5. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417 6. Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417 7.

Leave of absence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418 8.

Minutes of the meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418 9. Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418 Chapter IV Charter of Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418 10. Member not to participate in meetings in certain cases. . . . . . . . . . . . . . . . . . 418 11. Obligation of a Member to give information of disqualification. . . . . . . . . . . 419 12. Declaration of fidelity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419

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Chapter V Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419 13. Manner and form in which contracts may be executed. . . . . . . . . . . . . . . . . . 419 14. Affixation of Common Seal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419 Chapter VI Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420 15. Power to regulate procedure in certain circumstances . . . . . . . . . . . . . . . . . . 420 16. Effect of any irregularity of procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420 17. Meetings of Committees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420 18. Relaxation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420 Schedule I Oath of Office and Secrecy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421 Schedule II Charter of Conduct for Members of Board. . . . . . . . . . . . . . . . . . . . 421 1. Definitions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421 3. Charter in addition to other provisions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 4. General principles.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 5. Outside or private activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 6. Conflict in respect of agenda.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 7. Members not to hear or decide in certain cases.. . . . . . . . . . . . . . . . . . . . . 422 8. Availing services of regulated entities.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 9. Acceptance of gifts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 10. Other disclosures.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423 11. Procedure for managing the conflict.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423 12. Procedure for public to raise conflict of interests.. . . . . . . . . . . . . . . . . . . . 423 13. Maintenance of disclosures.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424

IBBI (Advisory Committee) Regulations, 2017 Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425 1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425 Chapter II Constitution of Advisory Committee . . . . . . . . . . . . . . . . . . . . . . . . 426 3.

Constitution of Advisory Committee.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426 4.

Composition of Advisory Committee.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426 Chapter III Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427 5. Meetings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427 6. Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427 7. Conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427

IBBI (Information Utilities) Regulations, 2017 Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429 1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429 xxiv

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Chapter II Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430 3.

Eligibility for registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430 4.

Application for registration or renewal thereof. . . . . . . . . . . . . . . . . . . . . . . . 431 5.

Disposal of application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432 6.

Conditions of registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 7.

In-principle approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434 Chapter III Shareholding and Governance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434 8. Shareholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434 9.

Composition of the Governing Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435 10. Regulatory Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436 11. Compliance officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436 12. Grievance Redressal Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436 Chapter IV Technical Standards and Bye-Laws. . . . . . . . . . . . . . . . . . . . . . . . . 437 13. Technical Standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437 14. Technical Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438 15. Bye-laws of information utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438 16. Amendment to bye-laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438 Chapter V Core Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 439 17. Provision of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 439 18. Registration of users . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 439 19. Use of different information utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440 20. Acceptance and receipt of information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440 21. Information of default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440 22. Storage of information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441 23. Access to information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441 24. Accessing information stored with other information utilities. . . . . . . . . . . . 441 25. Annual statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 26. Porting information from registries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 27. Duties of the user. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 Chapter VI Duties of Information Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 28. General duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 29. Non-discrimination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 30. Other duties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 31. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443 32. Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443 33. Risk management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443 34. Audit of information technology framework. . . . . . . . . . . . . . . . . . . . . . . . . . 444 35. Preservation Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 36. Provision of information to the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 37. Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445

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Chapter VII Services to Insolvency Professionals. . . . . . . . . . . . . . . . . . . . . . . . . 445 38. Storing information submitted by insolvency professionals. . . . . . . . . . . . . . 445 Chapter VIII Surrender or Cancellation of Registration. . . . . . . . . . . . . . . . . . . . 445 39. Exit management plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445 40. Surrender of registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445 41. Disciplinary proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 446 42. Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447 Form A Application for Certificate of Registration . . . . . . . . . . . . . . . . . . . . . . . . 448 Form B The Insolvency and Bankruptcy Board of India certificate of Registration No._. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 Form C Format of information under regulation 20. . . . . . . . . . . . . . . . . . . . . . . . 453

IBBI (Voluntary Liquidation Process) Regulations, 2017 Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 457 1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 457 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 457 Chapter II Commencement of Liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458 3.

Initiation of Liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458 4.

Effect of liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459 Chapter III Appointment and Remuneration of Liquidator . . . . . . . . . . . . . . . 459 5.

Appointment of Liquidator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459 6.

Eligibility for appointment as liquidator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460 7.

Liquidator’s remuneration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460 Chapter IV Powers and Functions of the Liquidator. . . . . . . . . . . . . . . . . . . . . 460 8. Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460 9.

Preliminary Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461 10. Registers and books of account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461 11. Engagement of professionals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462 12. Consultation with stakeholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462 13. Extortionate credit transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463 14. Public announcement by the liquidator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463 15. Proof of claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463 Chapter V Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463 16. Claims by operational creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463 17. Claims by financial creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464 18. Claims by workmen and employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464 19. Claims by other stakeholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465 20. Proving security interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465 21. Production of bills of exchange and promissory notes. . . . . . . . . . . . . . . . . . 466 22. Substantiation of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 xxvi

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23.

24.

25.

26.

27.

28.

29.

30.

Cost of proof. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 Determination of quantum of claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 Debt in foreign currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 Periodical payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 Debt payable at future time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 Mutual credits and set-off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467 Verification of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467 List of stakeholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467

Chapter VI Realisation of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468 31. Manner of sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468 32. Recovery of monies due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468 33. Liquidator to realize uncalled capital or unpaid capital contribution. . . . . . . 468 Chapter VII Proceeds of Liquidation and Distribution of Proceeds. . . . . . . . . . 469 34. All money to be paid in to bank account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 35. Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 36. Return of money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 37. Completion of liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 38. Final Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 470 39. Unclaimed proceeds of liquidation or undistributed assets. . . . . . . . . . . . . . . 471 40. Detection of Fraud or Insolvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 41. Preservation of records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472 Form A Public Announcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 473 Form B Proof of Claim by Operational Creditors except Workmen and Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 474 Form C Proof of Claim by Financial Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . 476 Form D Proof of Claim by a Workman or Employee . . . . . . . . . . . . . . . . . . . . . . . 479 Form E Proof of Claim by Authorised Representative of Workmen or Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481 Form F Proof of Claim by any other Stakeholder. . . . . . . . . . . . . . . . . . . . . . . . . . 483 Schedule II Register of Book Debts and Outstandings. . . . . . . . . . . . . . . . . . . . . 488

IBBI (Inspection and Investigation) Regulations, 2017 Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495 1.

Short title, commencement and application . . . . . . . . . . . . . . . . . . . . . . . . . . 495 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495 Chapter II Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496 Inspection by the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496 3.

4.

Conduct of Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497 5.

Interim Inspection Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498 6.

Inspection Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498

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Chapter III Investigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 499 7.

Investigation by the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 499 8.

Conduct of Investigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 499 9.

Interim Investigation Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501 10. Investigation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501 Chapter IV Consideration of Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502 11. Consideration of Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502 12. Show-cause notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502 13. Disposal of Show-cause notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503 Chapter V Restitution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504 14. Restitution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504 Form A Format of submission of claims under regulation 14(3). . . . . . . . . . . . . . 505

IBBI (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507 1.

Short title and commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507 Chapter II General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509 3.

Eligibility for resolution professional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509 4.

Access to books. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 510 5.

Extortionate credit transaction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 510 Chapter III Public Announcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511 Public announcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511 6.

Chapter IV Proof of Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511 Claims by operational creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511 7.

Claims by financial creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512 8.

9.

Claims by workmen and employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512 9A. Claims by other creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 10. Substantiation of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 11. Cost of proof proving the debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514 12. Submission of proof of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514 13. Verification of claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514 14. Determination of amount of claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514 15. Debt in foreign currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515 Chapter V Committee of Creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515 16. Committee with only operational creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . 515 17. Filings by the interim resolution professional. . . . . . . . . . . . . . . . . . . . . . . . . 516

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Chapter VI Meetings of the Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516 18. Meetings of the committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516 19. Notice for meetings of the committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516 20. Service of notice by electronic means. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516 21. Contents of the notice for meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517 22. Quorum at the meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 518 23. Participation through video conferencing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 518 24. Conduct of meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 519 Chapter VII Voting by the Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520 25. Voting by the committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520 Chapter VIII Conduct of the Fast Track Process. . . . . . . . . . . . . . . . . . . . . . . . . . 521 26. Appointment of registered valuers.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521 27. Transfer of debt due to creditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522 28. Sale of assets outside the ordinary course of business . . . . . . . . . . . . . . . . . . 522 29. Assistance of local district administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 522 Chapter IX Fast Track Process Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523 30. Fast track process costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523 31. Essential supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523 32. Costs of the interim resolution professional . . . . . . . . . . . . . . . . . . . . . . . . . . 523 33. Resolution professional costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 524 Chapter X Resolution Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 524 34. Fair value and Liquidation value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 524 35. Information memorandum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 525 35A Invitation of Resolution Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527 36. Resolution plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 528 37. Mandatory contents of the resolution plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 529 38. Approval of resolution plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530 39. Extension of the fast track process period. . . . . . . . . . . . . . . . . . . . . . . . . . . . 532 Form A Public Announcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533 Form B Proof of Claim by Operational Creditors except Workmen and Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534 Form C Proof of Claim by Financial Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . 537 Form D Proof of Claim by a Workman or an Employee. . . . . . . . . . . . . . . . . . . . . 540 Form E Proof of Claim Submitted by Authorised Representative of Workmen and Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543

IBBI (Grievance and Complaint Handling Procedure) Regulations, 2017 Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 549 1.

Short title, commencement and application.. . . . . . . . . . . . . . . . . . . . . . . . . . 549 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 549 xxix

Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

Chapter II Filing of Grievance and Complaint . . . . . . . . . . . . . . . . . . . . . . . . . 550 3.

Filing of grievance and complaint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550 4.

Identity of the stakeholder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 551 5.

Registration number.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 551 Chapter III Disposal of Grievance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552 6.

Disposal of grievance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552 Chapter IV Disposal of Complaint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552 7.

Disposal of complaint.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552 Chapter V Statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553 8.

The Board shall periodically disclose summary statistics about receipt and disposal of grievances and complaints on its web site.. . . . 553 Form A Format of filing complaint under regulation 3(3). . . . . . . . . . . . . . . . . . . 553

IBBI (Employees’ Service) Regulations, 2017 Chapter I Preliminary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 557 1.

Short title and commencement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 557 2.

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 557 Chapter II Appointment, Probation and Termination of Service. . . . . . . . . . . 558 3.

Classification and appointment of employees. . . . . . . . . . . . . . . . . . . . . . . . . 558 4. Recruitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559 5.

Initial Appointments to be made on minimum pay.. . . . . . . . . . . . . . . . . . . . . 559 6. Probation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559 7.

Commencement of service.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559 8.

Resignation from service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559 9.

Superannuation and retirement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560 10. Liquidated damages.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 561 Chapter III Record of Service, Seniority and Promotion. . . . . . . . . . . . . . . . . . 561 11. Record of service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 561 12. Seniority.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 561 13. Promotion.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 561 Chapter IV Pay, Allowances and other Beneffits. . . . . . . . . . . . . . . . . . . . . . . . . 562 14. [No regulation heading provided]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 562 15. Pay, allowances and other benefits.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 562 16. Gratuity.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 562 17. Pension.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 562 18. Cessation of pay and allowances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563 19. Increments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563 20. Fixation of pay on promotion.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563 21. Hometown. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563

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Chapter V Leave and Joining Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563 22. Leave not a matter of right.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563 23. Kinds of leave.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564 24. Lapse of leave on cessation of service.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564 25. Obligation to furnish Leave address.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564 26. Leave not admissible to an employee under suspension. . . . . . . . . . . . . . . . . 564 27. Casual leave.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564 28. Special casual leave. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565 29. Ordinary leave. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566 30. Sick leave.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566 31. Maternity leave and paternity leave.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 567 32. Accident leave. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 567 33. Extraordinary leave.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 568 34. Joining time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 568 Chapter VI Conduct, Discipline and Appeals . . . . . . . . . . . . . . . . . . . . . . . . . . . 568 35. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 568 36. Scope of an employee’s service.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 569 37. Liability to abide by regulations and directions.. . . . . . . . . . . . . . . . . . . . . . . 569 38. Obligation to maintain secrecy.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 569 39. Employees to promote Board’s interest.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 569 40. Prohibition against participation in politics and standing for election.. . . . . . 571 41. Prohibition against joining certain associations and strikes.. . . . . . . . . . . . . . 571 42. Contributions to the press.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 571 43. Employee not to seek outside employment. . . . . . . . . . . . . . . . . . . . . . . . . . . 571 44. Employment after retirement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 571 45. Employment with a service provider. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 572 46. Giving evidence.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 572 47. Acceptance of gifts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 572 48. Movable, immovable and valuable property. . . . . . . . . . . . . . . . . . . . . . . . . . 573 49. Conviction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573 50. Prohibition of sexual harassment of women employee at work place.. . . . . . 574 51. Penalties.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574 52. Procedure for imposing major penalties.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 576 53. Action on the inquiry report.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 580 54. Procedure for imposing minor penalties.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 580 55. Communication of orders.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 581 56. Common proceedings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 581 57. Special procedure in certain cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 581 58. Suspension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 581 59. Subsistence allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 583 60. Vigilance cases.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 583 61. Appeal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 584

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Chapter VII Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 585 62. Deputation of employees to other services.. . . . . . . . . . . . . . . . . . . . . . . . . . . 585 63. Redressal of grievances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 585 Schedule I Method of recruitment to and eligibility for various Grades and Positions under regulation 4.. . . . . . . . . . . . . . . . . . . . . 586 Schedule II Process to be followed to decide retirement of an employee under regulation 9(2)... . . . . . . . . . . . . . . . . . . . . . . . . . . . 590

NOTIFICATIONS, CIRCULARS, ORDERS, GUIDELINES AND LIST OF PRESS RELEASES

Notifications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 593 Circulars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615 Orders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 659 Guidelines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669 List of Press releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 705

INFORMATION UTILITIES EXPLAINED. . . . . . . . . . . . . . . . . . . . . . 707

xxxii

THE INSOLVENCY AND BANKRUPTCY CODE (AMENDMENT) ORDINANCE, 20181 No. 6 of 2018

[6th June, 2018.]

New Delhi, the 6th June, 2018/Jyaislha 16, 1940 (Saka) Promulgated by the President 1n the Sixty-ninth Year of the Republic of India.

An Ordinance further to amend the Insolvency and Bankruptcy Code, 2016.

WHEREAS the Insolvency and Bankruptcy Code, 2016 (the Code), inter alia, provides for insolvency resolution of corporate persons in a time bound manner for maximisation of value of assets of such persons; AND WHEREAS a need has been felt, inter alia, to balance the interests of various stakeholders in the Code, especially interests of home buyers and micro, small and medium enterprises, promoting resolution over liquidation of corporate debtor by lowering the voting threshold of committee of creditors and streamlining provisions relating to eligibility of resolution applicants; AND WHEREAS Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action; NOW, THEREFORE, in exercise of the powers conferred by clause (1) of article 123 of the Constitution, the President is pleased to promulgate the following Ordinance:— 1. Short title and commencement (1) This Ordinance may be called the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018.

(2)

It shall come into force at once.

2. Amendment of section 3.

In the Insolvency and Bankruptcy Code, 2016 (31 of 2016) (hereinafter referred to as the principal Act), in section 3, in clause (12), for the word “repaid”, the word “paid” shall be substituted.

1

w.e.f. 23-11-2017, vide Gazette of India, Extraordinary, Part II—Section 1, No. 8, dtd. 19-01- 2018, by the Ministry of Law and Justice (Legislative Department).

1

Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

3. Amendment of section 5.

In section 5 of the principal Act,— (i)

after clause (5), the following clause sha11 be inserted, namely:— ‘(5A) “corporate guarantor” means a corporate person who is the surety in a contract of guarantee to a corporate debtor;’;

(ii)

in clause (8), in sub-clause (f), the following Explanation shall be inserted, name1y: — ‘Explanation.— For the purposes of this sub-clause,— (i)

any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and

(ii)

the expressions, “allottee” and “real estate project” shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);’;

(iii) in clause (21), for the word “repayment”, the word “payment” shall be substituted; (iv) after clause (24), the following clause shall be inserted, namely:— ‘(24A)

“related party”, in relation to an individual, means— (a)

a person who is a relative of the individual or a relative of the spouse of the individual;

(b)

a partner of a limited liability partnership, or a limited liability partnership or a partnership firm, in which the individual is a partner;

(c)

a person who is a trustee of a trust in which the beneficiary of the trust includes the individual, or the terms of the trust confers a power on the trustee which may be exercised for the benefit of the individual;

(d)

a private company in which the individual is a director and holds along with his relatives, more than two per cent. of its share capital;

(e)

a public company in which the individual is a director and holds along with relatives, more than two per cent. of its paid-up share capital;

(f)

a body corporate whose board of directors, managing director or manager, in the ordinary course of business, acts on the advice, directions or instructions of the individual; 2

The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018

(g)

a limited liability partnership or a partnership firm whose partners or employees in the ordinary course of business, act on the advice, directions or instructions of the individual;

(h)

a person on whose advice, directions or instructions, the individual is accustomed to act;

(i)

a company, where the individual or the individual along with its related party, own more than fifty per cent. of the share capital of the company or controls the appointment of the board of directors of the company.

Explanation.—For the purposes of this clause,— (a)

“relative”, with reference to any person, means anyone who is related to another, in the following manner, namely:— (i)

members of a Hindu Undivided Family,

(ii)

husband,

(iii) wife, (iv) father, (v)

mother,

(vi) son, (vii) daughter, (viii) son’s daughter and son, (ix) daughter” 5 daughter and son, (x)

grandson’s daughter and son,

(xi) granddaughter‘s daughter and son, (xii) brother, (xiii) sister, (xiv) brother’s son and daughter, (xv) sister’s son and daughter, (xvi) father‘s father and mother, (xvii) mother’s father and mother, (xviii)

father’s brother and sister,

(xix) mother’ s brother and sister; and (b)

wherever the relation is that of a son, daughter, sister or brother, their spouses shall also be included;’.

3

Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

4. Amendment of section 7 In section 7 of the principal Act, in sub-section (1), for the words “other financial creditors”, the words “other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the Central Government,” shall be substituted.

5. Amendment of section 8.

In section 8 of the principal Act,— (a)

(b)

in sub-section (2),— (i)

in clause (a), for the words “if any, and”, the words “if any, or” shall be substituted;

(ii)

in clause (b), for the word “repayment”, the word “payment” shall be substituted;

in the Explanation, for the word “repayment”, the word “payment” shall be substituted.

6. Amendment of section 9.

In section 9 of the principal Act,— (a)

in sub-section (3),— (i)

in clause (c), for the words “by the corporate debtor; and”, the words “by the corporate debtor, if available;” shall be substituted;

(ii)

for clause (d), the following clauses shall be substituted, namely:— “(d) a copy of any record with information utility confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available; and (e)

(b)

any other proof confirming that there is no payment of an unpaid operational debt by the corporate debtor or such other information, as may be prescribed”;

in sub-section (5),— (A)

in clause (i), in sub-clause (b), for the word “repayment”, the word “payment” shall be substituted;

(B)

in clause (ii), in sub-clause (b), for the word “repayment”, the word “payment” shall be substituted.

7. Amendment of section 10.

In section 10 of the principal Act, — (a)

for sub-section (3), the following sub-section shall be substituted, namely:— “(3) The corporate applicant shall, along with the application, furnish—

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The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018

(b)

(a)

the information relating to its books of account and such other documents for such period as may be specified;

(b)

the information relating to the resolution professional proposed to be appointed as an interim resolution professional; and

(c)

the special resolution passed by shareholders of the corporate debtor or the resolution passed by at least three-fourth of the total number of partners of the corporate debtor, as the case may be, approving filing of the application”;

in sub-section (4),— (i)

in clause (a), after the words “if it is complete”, the words “and no disciplinary proceeding is pending against the proposed resolution professional” shall be inserted;

(ii)

in clause (b), after the words “if it is incomplete”, the words “or any disciplinary proceeding is pending against the proposed resolution professional” shall be inserted.

8. Amendment of section 12 In section 12 of the principal Act, in sub-section (2), for the word “seventy-five”, the word “sixty-six” shall be substituted.

9. Insertion of new section 12A. After section 12 of the principal Act, the following section shall be inserted, namely:— “12A. Withdrawal of application under section 7, 9 or 10.

The Adjudicating Authority may allow the withdrawal of application admitted under section 7 or section 9 or section 10, on an application made by the applicant with the approval of ninety per cent. voting share of the committee of creditors, in such manner as may be prescribed”.

10. Amendment of section 14 In section 14 of the principal Act, for sub-section (3), the following sub-section shall be substituted, namely:— “(3)

The provisions of sub-section (1) shall not apply to— (a)

such transaction as may be notified by the Central Government in consultation with any financial regulator;

(b)

a surety in a contract of guarantee to a corporate debtor.”.

11. Amendment of section 15 In section 15 0f the principal Act, in sub-section (1), in clause (c), for the word “claims”, the words “claims, as may be specified” shall be substituted.

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Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

12. Amendment of section 16.

In section 16 of the principal Act, in sub-section (5), for the words “shall not exceed thirty days from date of his appointment“, the words and figures “shall continue till the date of appointment of the resolution professional under section 22” shall be substituted.

13. Amendment of section 17.

In section 17 of the principal Act, in sub-section (2), — (i)

in clause (d), for the words “may be specified”, the words “may be specified; and” shall be substituted;

(ii)

after clause (d), the following clause shall be inserted, namely:— “(e) be responsible for complying with the requirements under any law for the time being in force on behalf of the corporate debtor.”.

14. Amendment of section 18.

In section 18 of the principal Act, in the Explanation, for the word “sub-section”, the word “section” shall be substituted.

15. Amendment of section 21.

In section 21 of the principal Act,— (i)

in sub-section (2),— (a)

in the proviso, for the words “related party to whom a corporate debtor owes a financial debt”, the words “financial creditor or the authorised representative of the financial creditor referred to in subsection (6) or sub-section (6A) or sub-section (5) of section 24, if it is a related party of the corporate debtor,” shall be substituted;

(b)

after the proviso, the following proviso shall be inserted, namely:— “Provided further that the first proviso shall not apply to a financial creditor, regulated by a financial sector regulator, if it is a related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible into equity shares, prior to the insolvency commencement date”;

(ii)

in sub-section (3), for the word “Where”, the words, brackets and figures and letter “Subject to sub-sections (6) and (6A), where” shall be substituted;

(iii) in sub-section (6), in the opening portion, the words “or issued as securities” shall be omitted; (iv) after sub-section (6), the following sub-sections shall be inserted, namely:— “(6A) Where a financial debt—

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(a)

is in the form of securities or deposits and the terms of the financial debt provide for appointment of a trustee or agent to act as authorised representative for all the financial creditors, such trustee or agent shall act on behalf of such financial creditors; (b) is owed to a class of creditors exceeding the number as may be specified, other than the creditors covered under clause (a) or sub-section (6), the interim resolution professional shall make an application to the Adjudicating Authority along with the list of all financial creditors, containing the name of an insolvency professional, other than the interim resolution professional, to act as their authorised representative who shall be appointed by the Adjudicating Authority prior to the first meeting of the committee of creditors; (c) is represented by a guardian, executor or administrator, such person shall act as authorised representative on behalf of such financial creditors, and such authorised representative under clause (a) or clause (b) or clause (c) shall attend the meetings of the committee of creditors, and vote on behalf of each financial creditor to the extent of his voting share.

(6B) The remuneration payable to the authorized representative—

(v)

(i)

under clauses (a) and (c) of sub-section (6A), ifany, shall be as per the terms of the financial debt or the relevant documentation; and

(ii)

under clause (b) of sub-section (6A) shall be as specified which shall be jointly borne by the financial creditors”;

for sub-sections (7) and (8), the following sub-sections shall be substituted, namely:— “(7) The Board may specify the manner of voting and the determining of the voting share in respect of financial debts covered under subsections (6) and (6A).

(8)

Save as otherwise provided in this Code, all decisions of the committee of creditors shall be taken by a vote of not less than fifty— one per cent. of voting share of the financial creditors: Provided that where a corporate debtor does not have any financial creditors, the committee of creditors shall be constituted and shall comprise of such persons to exercise such functions in such manner as may be specified”.

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Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

16. Amendment of section 22.

In section 22 of the principal Act,— (a)

in sub-section (2), for the word, “seventy-five”, the word “sixty-six” shall be substituted;

(b)

in sub-section (3), — (i)

in clause (a), after the words “resolution professional”, the words “subject to a written consent from the interim resolution professional in the specified form” shall be inserted;

(ii)

in clause (b), after the words “appointment of the proposed resolution professional”, the words “along with a written consent from the proposed resolution professional in the specified form” shall be inserted.

17. Amendment of section 23.

In section 23 of the principal Act, in sub-section (1), the following proviso shall be inserted, namely:— “Provided that the resolution professional shall, if the resolution plan under subsection (6) of section 30 has been submitted, continue to manage the operations of the corporate debtor after the expiry of the corporate insolvency resolution process period until an order is passed by the Adjudicating Authority under section 31.”.

18. Amendment of section 24.

In section 24 of the principal Act, — (i)

in sub-section (3), in clause (a), for the words “Committee of creditors", the words, brackets, figures and letter “committee of creditors, including the authorised representatives referred to in sub-sections (6) and (6A) of section 21 and sub-section (5)” shall be substituted;

(ii)

in sub-section (5), for the words “Any creditor”, the words, brackets, figures and letters “Subject to sub-sections (6), (6A) and (6B) of section 21, any creditor” shall be substituted.

19. Insertion of new section 25A. After section 25 of the principal Act, the following section shall be inserted, namely: — ‘25A. Rights and duties of authorized representative of financial creditors.

(1) The authorised representative under sub-section (6) or sub-section (6A) of section 21 or sub-section (5) of section 24 shall have the right to participate and vote in meetings of the committee of creditors on behalf of the financial creditor he represents in accordance with the prior voting instructions of such creditors obtained through physical or electronic means.

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(2)

It shall be the duty of the authorised representative to circulate the agenda and minutes of the meeting of the committee of creditors to the financial creditor he represents.

(3)

The authorised representative shall not act against the interest of the financial creditor he represents and shall always act in accordance with their prior instructions: Provided that if the authorised representative represents several financial creditors, then he shall cast his vote in respect of each financial creditor in accordance with instructions received from each financial creditor, to the extent of his voting share: Provided further that if any financial creditor does not give prior instructions through physical or electronic means, the authorized representative shall abstain from voting on behalf of such creditor.

(4)

The authorised representative shall file with the committee of creditors any instructions received by way of physical or electronic means, from the financial creditor he represents, for voting in accordance therewith, to ensure that the appropriate voting instructions of the financial creditor he represents is correctly recorded by the interim resolution professional or resolution professional, as the case may be.

Explanation.—For the purposes of this section, the “electronic means” shall be such as may be specified”.

20. Amendment of section 27 In section 27 of the principal Act, for sub-section (2), the following sub-section shall be substituted, namely:— “(2) The committee of creditors may, at a meeting, by a vote of sixty-six per cent. of voting shares, resolve to replace the resolution professional appointed under section 22 with another resolution professional, subject to a written consent from the proposed resolution professional in the specified form.”.

21. Amendment of section 28.

In section 28 of the principal Act, in sub-section (3), for the word, “seventy-five”, the word “sixty-six” shall be substituted.

22. Amendment of section 29A. In section 29A of the principal Act,— (i)

in clause (c).— (A)

for the words “has an account,”, the words “at the time of submission of the resolution plan has an account,” shall be substituted;

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Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

(B)

after the words and figures “the Banking Regulation Act, 1949”, the words “or the guidelines of a financial sector regulator issued under any other law for the time being in force,” shall be inserted;

(C ) after the proviso, the following shall be inserted, namely:— “Provided further that nothing in this clause shall apply to a resolution applicant where such applicant is a financial entity and is not a related party to the corporate debtor.

Explanation I.—For the purposes of this proviso, the expression “related party” shall not include a financial entity, regulated by a financial sector regulator, if it is a financial creditor of the corporate debtor and is a related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible into equity shares, prior to the insolvency commencement date.

Explanation II— For the purposes of this clause, where a resolution applicant has an account, or an account of a corporate debtor under the management or control of such person or of whom such person is a promoter, classified as non-performing asset and such account was acquired pursuant to a prior resolution plan approved under this Code, then, the provisions of this clause shall not apply to such resolution applicant for a period of three years from the date of approval of such resolution plan by the Adjudicating Authority under this Code;”; (ii)

for clause (d), the following clause shall be substituted, namely:— “(d) has been convicted for any offence punishable with imprisonment— (i)

for two years or more under any Act specified under the Twelfth Schedule; or

(ii)

for seven years or more under any other law for the time being in force:

Provided that this clause shall not apply to a person after the expiry of a period of two years from the date of his release from imprisonment: Provided further that this clause shall not apply in relation to a connected person referred to in clause (iii) of Explanation I;”; (iii) in clause (e), the following proviso shall be inserted, namely:— “Provided that this clause shall not apply in relation to a connected person referred to in clause (iii) of Explanation I;”; (iv) in clause (g), the following proviso shall be inserted, namely:“Provided that this clause shall not apply if a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent

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transaction has taken place prior to the acquisition of the corporate debtor by the resolution applicant pursuant to a resolution plan approved under this Code or pursuant to a scheme or plan approved by a financial sector regulator or a court, and such resolution applicant has not otherwise contributed to the preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction;”; (v)

in clause (h),— (A)

for the words “an enforceable guarantee”, the words “a guarantee” shall be substituted;

(B)

after the words “under this Code”, the words “and such guarantee has been invoked by the creditor and remains unpaid in full or part” shall be inserted;

(vi) in clause (i), for the words “has been”, the word “is” shall be substituted; (vii) the Explanation occurring after clause (j) shall be numbered as Explanation I, and in Explanation I as so numbered, for the proviso, the following provisos shall be substituted, namely:— ‘Provided that nothing in clause (iii) of Explanation I shall apply to a resolution applicant where such applicant is a financial entity and is not a related party of the corporate debtor: Provided further that the expression “related party” shall not include a financial entity, regulated by a financial sector regulator, if it is a financial creditor of the corporate debtor and is a related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible into equity shares, prior to the insolvency commencement date;"; (viii) after Explanation I as so numbered, the following Explanation shall be inserted, namely:— ‘Explanation II.—For the purposes of this section, “financial entity” shall mean the following entities which meet such criteria or conditions as the Central Government may, in consultation with the financial sector regulator, notify in this behalf, namely:— (a)

a scheduled bank;

(b)

any entity regulated by a foreign central bank or a securities market regulator or other financial sector regulator of a jurisdiction outside India which jurisdiction is compliant with the Financial Action Task Force Standards and is a signatory to the International Organisation of Securities Commissions Multilateral Memorandum of Understanding;

(c)

any investment vehicle, registered foreign institutional investor, registered foreign portfolio investor or a foreign venture capital investor, where the terms shall have the meaning assigned to them in 11

Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

regulation 2 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 made under the Foreign Exchange Management Act, 1999 (42 of 1999); (d)

an asset reconstruction company registered with the Reserve Bank of India under section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);

(e)

an Alternate Investment Fund registered with the Securities and Exchange Board of India;

(f)

such categories of persons as may be notified by the Central Government”.

23. Amendment of section 30.

In section 30 of the principal Act,— (i)

in sub-section (1), after the words “resolution plan”, the words, figures and letter “along with an affidavit stating that he is eligible under section 29A” shall be inserted;

(ii)

in sub-section (2),— (A)

in clauses (a) and (b), for the word “repayment” at both the places where it occurs, the word “payment” shall be substituted;

(B)

after clause (f), the following Explanation shall be inserted, namely:—

“Explanation.— For the purposes of clause (e), if any approval of shareholders is required under the Companies Act, 2013 (18 of 2013) or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law”; (iii) in sub-section (4),— (a)

for the word “seventy-five”, the word “sixty-six” shall be substituted;

(b)

after the third proviso, the following proviso shall be inserted, namely:~

“Provided also that the eligibility criteria in section 29A as amended by the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 shall apply to the resolution applicant who has not submitted resolution plan as on the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018.“.

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24. Amendment of section 31.

In section 31 of the principal Act,— (a)

in sub-section (1), the following proviso shall be inserted, namely:“Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation”;

(b)

after sub-section (3), the following sub-section shall be inserted, namely:— “(4) The resolution applicant shall, pursuant to the resolution plan approved under sub-section (I), obtain the necessary approval required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under sub-section (1) or within such period as provided for in such law, whichever is later.”.

25. Amendment of section 33.

In section 33 of the principal Act, in sub-section (2), after the words “decision of the committee of creditors”, the words “approved by not less than sixty-six per cent. of the voting share” shall be inserted.

26. Amendment of section 34.

In section 34 of the principal Act, — (a)

in sub-section (1), for the words and letter “Chapter II shall”, the words and letter “Chapter II shall, subject to submission of a written consent by the resolution professional to the Adjudicatory Authority in specified form,” shall be substituted;

(b)

in sub-section (4),— (i)

in clause (b), for the words “in writing", the words “in writing; or” shall be substituted;

(ii)

after clause (b), the following clause shall be inserted, namely:— “(c) the resolution professional fails to submit written consent under sub-section (1).”;

(c)

in sub-section (5), for the word, brackets and letter “clause (a)”, the words, brackets and letters “clauses (a) and (c)” shall be substituted;

(d)

in sub-section (6), after the words “another insolvency professional”, the words “along with written consent from the insolvency professional in the specified form,” shall be inserted.

27. Amendment of section 42 In section 42 of the principal Act, after the words “of the liquidator”, the words “accepting or” shall be inserted.

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Insolvency and Bankruptcy Code, 2016 with Rules and Regulations

28. Amendment of section 45.

In section 45 of the principal Act, in sub-section (1), the words and figures “of section 43” shall be omitted.

29. Amendment of section 60.

In section 60 of the principal Act, — (a)

in sub-section (2), for the words “bankruptcy of a personal guarantor of such corporate debtor”, the words “liquidation or bankruptcy of a corporate guarantor or personal guarantor, as the case may be, of such corporate debtor” shall be substituted;

(b)

in sub-section (3), for the words “bankruptcy proceeding of a personal guarantor of the corporate debtor", the words “liquidation or bankruptcy proceeding of a corporate guarantor or personal guarantor, as the case may be, of the corporate debtor” shall be substituted.

30. Amendment of section 69.

In section 69 of the principal Act, for the words “On or after the insolvency commencement date, if’, the word “If” shall be substituted.

31. Amendment of section 76.

In section 76 of the principal Act,— (a)

in the marginal heading, for the word “repayment”, the word “payment” shall be substituted;

(b)

in clause (a), for the word “repayment”. the word “payment” shall be substituted.

32. Amendment of section 196.

In section 196 of the principal Act, in sub-section (1),— (i)

after clause (a), the following clause shall be inserted namely — “(aa) promote the development of, and regulate, the working and practices of, insolvency professionals, insolvency professional agencies and information utilities and other institutions, in furtherance of the purposes of this Code;”;

(ii)

in clause (c), for the words “for the registration”, the words “for carrying out the purposes of this Code, including fee for registration and renewal” shall be substituted.

33. Amendment of section 231.

In section 231 of the principal Act, for the words “Adjudicating Authority” at both the places where they occur, the words “Adjudicating Authority or the Board” shall be substituted.

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34. Insertion of new section 238A. After section 238 of the principal Act, the following section shall be inserted, namely:— “238A. Limitation.

The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to the proceedings or appeals before the Adjudicating Authority, the National Company Law Appellate Tribunal, the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal, as the case may be”.

35. Amendment of section 239.

In section 239 of the principal Act, in sub-section (2),— (i)

after clause (e), the following clause shall be inserted, namely:— “(ea) other proof confirming that there is no payment of an unpaid operational debt by the corporate debtor or such other information under clause (6) of sub-section (3) of section 9;”;

(ii)

after clause (f), the following clause shall be inserted, namely:— “(fa) the manner of withdrawal of application under section 12A;”.

36. Amendment of section 240.

In section 240 of the principal Act, in sub-section (2),—

(i)

clause (g) shall be omitted;

(ii)

after clause (j), the following clause shall be inserted, namely:— “(ja) the last date for submission of claims under clause (c) of sub-section (1) of section 15;";

(iii) after clause (n), the following clauses shall be inserted, namely:— “(na) the number of creditors within a class of creditors under clause (b) of sub-section (6A) of section 21; (nb) the remuneration payable to authorised representative under clause (ii) of the proviso to sub-section (6B) of section 21; (nc) the manner of voting and determining the voting share in respect of financial debts under sub-section (7) of section 21;”.

37. Insertion of new section 240A. After section 240 of the principal Act, the following section shall be inserted, namely: — “240A Application of this Code to micro, small and medium enterprises.

(1) Notwithstanding anything to the contrary contained in this Code, the provisions of clauses (c) and (h) of section 29A shall not apply to the

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resolution applicant in respect of corporate insolvency resolution process of any micro, small and medium enterprises.

(2)

Subject to sub-section (1), the Central Government may, in the public interest, by notification, direct that any of the provisions of this Code shall— (a)

not apply to micro, small and medium enterprises; or

(b)

apply to micro, small and medium enterprises, with such modifications as may be specified in the notification.

(3)

A draft of every notification proposed to be issued under sub—section (2), shall be laid before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions.

(4)

If both Houses agree in disapproving the issue of notification or both Houses agree in making any modification in the notification, the notification shall not be issued or shall be issued only in such modified form as may be agreed upon by both the Houses, as the case may be.

(5)

The period of thirty days referred to in sub-section (3) shall not include any period during Which the House referred to in sub-section (4) is prorogued or adjourned for more than four consecutive days.

(6)

Every notification issued under this section shall be laid, as soon as may be after it is issued, before each House of Parliament.

Explanation.- For the purposes of this section, the expression “micro, small and medium enterprises” means any class or classes of enterprises classified as such under sub-section (1) of section 7 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006)” 38. Insertion of new Schedule After the Eleventh Schedule to the principal Act, the following Schedule shall be inserted, namely:— “THE TWELFTH SCHEDULE (See clause (d) of section 29A) ACTS FOR THE PURPOSES 0F CLAUSE (d) OF SECTION 29A (1)

The Foreign Trade (Development and Regulation) Act, 1922 (22 of 1922);

(2)

The Reserve Bank of India Act, 1934 (2 of 1934);

(3)

The Central Excise Act, 1944 (1 of 1944);

(4)

The Prevention of Food Adulteration Act, 1954 (37 of 1954);

(5)

The Essential Commodities Act, 1955 (10 of 1955);

(6)

The Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(7)

The Income—tax Act, 1961 (43 of 1961); 16

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(8)

The Customs Act, 1962 (52 of 1962);

(9)

The Water (Prevention and Control of Pollution) Act, 1974 (6 of 1974);

(10)

The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (52 of 1974);

(11)

The Air (Prevention and Control of Pollution) Act, 1981 (14 of 1981);

(12)

The Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986);

(13)

The Environment (Protection) Act, 1986 (29 of 1986);

(14)

The Prohibition of Benami Property Transactions Act, 1988 (45 of 1988);

(15)

The Prevention of Corruption Act, 1988 (49 of 1988);

(16)

The Securities and Exchange Board of India Act7 1992 (15 of 1992)

(17)

The Foreign Exchange Management Act, 1999 (42 of 1999);

(18)

The Competition Act, 2002 (12 of 2003);

(19)

The Prevention of Money—laundering Act, 2002 (15 of 2003);

(20)

The Limited Liability Partnership Act, 2008 (6 of 2009);

(21)

The Foreign Contribution (Regulation) Act, 2010 (42 of 2010);

(22)

The Companies Act, 2013 (18 of 2013) or any previous company law;

(23)

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 201 5);

(24)

The Insolvency and Bankruptcy Code, 2016 (31 of 2016);

(25)

The Central Goods and Services Tax Act, 2017 (12 of 2017) and respective State Acts imposing State goods and services tax;

(26)

such other Acts as may be notified by the Central Government”.

39. Amendment of section 434 of Act 18 of 2013.

In section 434 of the Companies Act, 2013, [as substituted by paragraph 34 of the Eleventh Schedule to the Insolvency and Bankruptcy Code, 2016], in sub-section (1), in clause (c), after the proviso, the following proviso shall be inserted, namely:“Provided further that any party or parties to any proceedings relating to the winding up of companies pending before any Court immediately before the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018, may file an application for transfer of such proceedings and the Court may by order transfer such proceedings to the Tribunal and the proceedings so transferred shall be dealt with by the Tribunal as an application for initiation of corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).”

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