Recent Key amendments in IBC

Key amendments IBC:

T= Commencement of the CIRP and appointment of the IRP

Regulation 6: The IRP has to do a PA within 3 days from the ICD date not from the date of receipt of the certified copy of the order i.e. (T+3)

Regulation 3(1A): When CoC decides to appoint the IRP as RP or replace the IRP with another RP, it shall obtain a written consent from the proposed RP in form AA

Regulation 6(3)- The expenses on Public Announcement shall not form part of the CIRP cost shall be omitted i.e. it will be considered as part of the CIRP cost under regulation 31 if it is unpaid but for this no clarification has been provided under regulation 31

Regulation 12(2): A creditor, who fails to submit claim with in the time specified in the Form A may submit a claim with proof of claim within 90 days from the Insolvency Commencement Date i.e. no creditor can submit the claim till the approval of the resolution plan by the Hon’ble NCLT

Regulation 17(1): The interim resolution professional shall a file a certifying constitution of the committee report to the AA within 2 days of the last of verification of claims received under regulation 12(1) [{(T+21)}+2]=23 i.e. now the IRP cannot file a report before the expiry of 30 days from the date of his appointment

The IRP shall call the first CoC meeting within 7 days from filing of the report under regulation 17(1) i.e. [{(T+21)}+2]+7=30

Regulation 19: A meeting of the committee of creditors shall be called by giving not less than 5 days’ notice in writing to every participant including suspended board of directors at the address it has provided to the RP

CoC may reduce the period from 5 days to such other period of not less than 24 hours provided that the CoC may reduce the period to such other period of not less than 48 hours if there is any authorized representative i.e. the RP cannot call the CoC meeting at a shorter notice and he has to give notice at least 48 hours before the calling any CoC meeting therefore the RP has to take the approval of the CoC for reducing such time limit from 5 days to such other period in the First CoC itself

Regulation 26(2): Once a vote on a resolution is cast by a member of the committee such member shall not be allowed to change it subsequently such requirement is omitted (This was happen in Jyoti Structure Limited where some of the CoC members have changed their votes after voting is done through e-voting system)

Regulation 27: The RP shall appoint 2 registered valuers with 7 days from date of his appointment as RP but not later than 47 day from the ICD i.e. the RP has to appoint 2 registered valuers within 47 days at any cost he/she cannot delay the process of appointment of registered valuers (T+47)

Regulation 29: The sale of assets of the CD requires an approval of the CoC with 66% of voting share of the members i.e. before this amendment the IRP/RP was taking an approval of the CoC with 51% of voting share of the members on account of absence of information under this regulation

Regulation 30A:

Submission of application for withdrawal of application admitted can be done before issue of EoI by the RP
CoC to dispose of the application-within 7 days of its receipt or within 7 days from the constitution of CoC under regulation 17(1) whichever is later
Filing of application to the AA with 90% majority voting by RP to AA-within 3 days from the approval of the CoC

Regulation 35A:

The RP shall form an opinion on preferential and other transactions within 75 days from the ICD (T+75)
The RP to make a determination on preferential and other transactions within 115 days from the ICD {(T+75)+40}=115 or T+115
The RP to make an application to the AA within 135 days from the ICD {(T+75)+40}+20=135 or T+135

Regulation 36:

The RP shall circulate the IM within 2 weeks from date of his appointment as RP but not later than 54 days after receiving the confidentiality undertaking under section 29(2) {(T+30)+14}+10 or T+54
Before this amendment the RP shall circulate the IM to each prospective RA latest by the date of invitation of resolution plan under section 25(2)(h). Now, such requirement is covered under regulation 36(B)-where the RP shall circulate the IM to the RA within 5 days of the date of issue of the provisional list of eligible prospective RA under regulation 36A(10)
Before this amendment the RP shall circulate the IM to prospective RA after receiving the confidentiality undertaking. Now, this requirement is deleted under regulation 36(4) and it is covered under regulation 36A(10)(g)

Regulation 36A:

For submitting a EoI by prospective RA to the RP- no need to pay any fees or non-refundable deposit
The RP shall issue the EoI in the newspaper within 75 days from the ICD (T+75)
The RP shall publish form G within 75 days from the ICD
The RP shall publish form G in one English and one regional language newspaper with wide circulation at the location of the registered office and principle office of the CD
The prospective RA shall submit the EoI within 15 days from issue of EoI (T+75)+15=90 or T+90
Provisional list of RAs by RP within 10 days from the last date of submission of the EoI {(T+75)+15}+10=100 or T+100
Submission of objections to provisional list by RA to RP within 5 days from the provisional list issued by RP [{(T+75)+15}+10]+5=105 or T+105
Final list of Ras by RP within 10 days of the receipt of objections ([{(T+75)+15}+10]+5)+10=115 or T+115
The prospective RA has to submit the following documents with the EoI:
An undertaking by the Prospective RA that it meets the criteria specified undersection 25(2)(h)
An undertaking by the Prospective RA that it does not suffer from any ineligibility under section 29A
An undertaking by the Prospective RA that every information and records provided in EoI is true and correct
An undertaking by the Prospective RA to the effect that it shall maintain confidentiality of the information required under section 29(2)

Regulation 36B:

The RP shall share the IM , evaluation matrix and a request for resolution plans within 5 days of the date of issue of the provisional list to every prospective RA in the provisional list and every prospective RA who has contested the decision of the RP against its non-inclusion in the provisional list [{(T+75)+15}+10]+5=105 or T+105
The request for resolution plan shall allow prospective Ras a minimum of 30 days to submit the Resolution Plan [{(T+75)+15}+10]+5+30=135 or T+135
The RP with the approval of CoC extend the timeline for submission of Resolution Plan
The request for resolution plan shall not require any refundable deposit for submission of the Resolution Plan to the RP

Regulation 37: The Resolution Plan shall provide for the measures for insolvency resolution of the CD for maximization of value of its assets including cancellation or delisting of any shares of the CD

Regulation 38: The Resolution Plan shall identify specific source of funds that will be used to pay the CIRP to the extend it is unpaid

Regulation 38(3): The Resolution Plan shall demonstrate that

It addresses the cause of default
It is feasible and viable
It has provisions for its effective implementation
It has provisions for approvals required and the timelines for the same
The RA has the capability to implement the Resolution Plan

Regulation 39(1):

The Resolution Applicant shall submit the RP in accordance with the code
+

An affidavit stating that it is eligible under section 29A
An undertaking that it will provide for additional funds to the extent required for the purpose under regulation 38(1)
An undertaking by the Prospective RA that every information and records provided in RP is true and correct

The RP shall endeavor (compulsory) to submit the RP approved by CoC to the AA at least 15 days before the maximum period for completion of the CIRP under section 12 along with a compliance certificate in form H.

SOURCE:
CA VIRAL DOSHI

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