LATEST AMENDMENTS IN INSOLVENCY AND BANKRUPTCY CODE PRESENTED BY: - - PDF document

LATEST AMENDMENTS IN INSOLVENCY AND BANKRUPTCY CODE PRESENTED BY: MUKESH KUMAR MITTAL B.COM., FCA, IP (IBBI) THROUGH WEBINAR ON 08-04-2020 AT 11:00AM HOSTED BY : PANIPAT BRANCH OF NIRC OF ICAI Disclaimer: Please note that this presentation is based on the limited information available with us. While every care has been taken to ensure accuracy of this presentation, CA Mukesh Kumar Mittal shall not assume any liability / responsibility for any errors that might creep in. The material herein does not constitute / substitute professional advice that may be required before acting on any matter. Without our prior written consent, this presentation shall not be quoted in whole or in part or otherwise referred to in any document or delivered to any other person or entity.

INSOLVENCY AND BANKRUPTCY CODE, 2016 AS THE NAME SUGGEST THE LAW IS APPLICABLE FOR INSOLVENCY AND BANKRUPTCY PROCESS. THE INSOLVENCY AND BANKRUPTCY ARE TWO DIFFERENT TERMS: One can be insolvent without being bankrupt, but One can’t be bankrupt without being insolvent. CODE : “Code” is usually known as a collection or compendium of laws. It refers to a systematic and comprehensive compilation of laws, rules or regulations that are consolidated and classified according to a particular subject matter. INSOLVENCY : Insolvency is the inability to pay debts when they are due. Fortunately, there are solutions for resolving insolvency, including borrowing money or increasing income so that you can pay off debt. You also could negotiate a debt payment or settlement plan with

• creditors. Insolvency is a state of economic distress.

BANKRUPTCY : Bankruptcy is usually a final alternative when other attempts to clear debt

• fail. Bankruptcy is a court order that decides how an insolvent debtor will deal with unpaid
• bligations.

LIQUIDATION : Liquidation is a process of winding up of a corporation or an incorporated entity. It may be Voluntary Liquidation or Compulsory Liquidation. Voluntary Liquidation is possible only when the debtor is solvent or it is in the position to pay all its creditors. On the other hand when a company is unable to pay its debts and there is no resolution plan of the company then there will be compulsory Liquidation. Journey of IBC Amendments IBC comes into effect in December, 2016 and was made operational to corporate debtors. First time amendment on 23-11-2017 through Ordinance, which was later converted into act on 18th January 2018. Second time amendment on 06-06-2018 again through Ordinance, which was later converted into act

• n 17th August 2018.

Third time Amendments were made on 16-08-2019 vide Insolvency and Bankruptcy Code (Amendment) Act, 2019 Fourth time On 12-12-2019 Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019 was introduced in Lok Sabha. However the Bill could not be passed in winter session of Parliament as Parliament adjourned sine die on 13-12-2019. Hence Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019 has been issued on 28-12-2019, which has later converted into act on 13th March 20. The provisions relating to applicability of code to Personal Guarantors of Corporate Debtor notifies w.e.f. 01-12-2019.

FIRSTLY, WE WILL DISCUSS ABOUT SOME TERMS USED IN THE CODE. Board (IBBI) : The Insolvency and Bankruptcy Board of India established under the code. Adjudicating Authority (AA): “Adjudicating Authority”, for the purposes of this Part, means

National Company Law Tribunal constituted under section 408 of the Companies Act, 2013 (18 of 2013).

Operational Creditor (OC) : “operational creditor” means a person to whom an operational debt

is owed and includes any person to whom such debt has been legally assigned or transferred.

Financial Creditor (FC) : “financial creditor” means any person to whom a financial debt is owed

and includes a person to whom such debt has been legally assigned or transferred to.

Corporate Debtor (CD) : “corporate debtor” means a corporate person who owes a debt to

any person.

Corporate Guarantor : “corporate guarantor” means a corporate person who is the surety in a contract

• f guarantee to a corporate debtor.

Claim : “claim” means –

(a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured, or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured;

Debt : “debt” means a liability or obligation in respect of a claim which is due from any person

and includes a financial debt and operational debt.

Default : “default” means non-payment of debt when whole or any part or instalment of

the amount of debt has become due and payable and is not 1[paid] by the debtor or the corporate debtor, as the case may be.

Dispute : “dispute” includes a suit or arbitration proceedings relating to–

(a) the existence of the amount of debt; (b) the quality of goods or service; or (c) the breach of a representation or warranty

Information Utility (IU) : “information utility” means a person who is registered with the Board

as an information utility under section 210.

Insolvency Professional (IP) : “insolvency professional” means a person enrolled under section

206 with an insolvency professional agency as its member and registered with the Board as an insolvency professional under section 207.

Insolvency Professional Agency (IPA) : “insolvency professional agency” means any person

registered with the Board under section 201 as an insolvency professional agency. Personal Guarantor : “personal guarantor” means an individual who is the surety in a contract of guarantee to a corporate debtor.

Resolution Applicant : "resolution applicant" means a person, who individually or jointly with any other person, submits a resolution plan to the resolution professional pursuant to the invitation made under clause (h) of sub-section (2) of section 25. Resolution Plan : “resolution plan” means a plan proposed by 2[resolution applicant] for

insolvency resolution of the corporate debtor as a going concern in accordance with Part II

Impact on other statutes Repealed Acts

• Presidency Town Insolvency Act, 1909; and
• Provisional Insolvency Act, 1920

Some of the amended Acts

• Sick Industrial Companies (Special Provisions) Repeal Act, 2003;
• Recovery of Debts Due to banks and financial institutions Act, 1993;
• Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest

Act, 2002; and

• Companies Act, 2013

Applicability, Scope & Structure Applicability All kinds of:

• Corporate Enterprises;
• Limited Liability Partnerships;
• Partnership Firms; and
• Individuals.

Scope

• Insolvency;
• Liquidation;

• Voluntary Liquidation (solvent insolvency); and
• Bankruptcy

Structure In entirety, the Code has 255 sections which are divided into 5 Parts as given below: Part I (Section 1 to 3) Preliminary (Definitions) Part II (Section 4 to 77) Insolvency Resolution and Liquidation for Corporate Persons Part III (Section 78 to 187) Insolvency Resolution and Bankruptcy for individuals and Partnership Firms Part IV (Section 188 to 223) Regulation of Insolvency Professionals, Agencies and Information Utilities Part V (Section 224 to 255) Miscellaneous (enables amendments in other statues such as Companies Act 2013) Schedules (12 Schedules) Provides for amendments to be carried out in other statues Framework of the Code Regulator Insolvency and Bankruptcy Board of India (IBBI)  Insolvency Professional Agencies;  Insolvency Professionals; and  Information Utilities Adjudicator National Company Law Tribunal Debt Recovery Tribunal Corporate Entities Non-Corporate Entities Companies/LLPs Individuals and Partnership Firms

Broad CIRP-Process Admission of application and appointment of Interim Resolution Professional Collation of claims and constitution of committee of creditors by Interim Resolution Professional Appointment of Resolution Professional in the creditors meeting held within 7 days of constitution of committee of creditors Resolution Professional to prepare Information Memorandum Resolution Applicant to prepare (on the basis of Information Memorandum) and submit resolution plan to Resolution Professional for examination & further submission for approval of committee of creditor Resolution plan approved by committee Resolution plan rejected by committee NCLT approves plan NCLT rejects plan Liquidation process starts

Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2020.

• No. IBBI/2019-20/GN/REG059
• 1. (1) These regulations may be called the Insolvency and Bankruptcy Board of India

(Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2020. (2) They shall come into force on the 29th March, 2020.

• 2. In the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate

Persons) Regulations, 2016, after regulation 40B, the following regulation shall be inserted, namely: - “40C. Special provision relating to time-line. Notwithstanding the time-lines contained in these regulations, but subject to the provisions in the Code, the period of lockdown imposed by the Central Government in the wake of COVID-19

• utbreak shall not be counted for the purposes of the time-line for any activity that could not be

completed due to such lockdown, in relation to a corporate insolvency resolution process.”. Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 2020

• No. IBBI/2019-20/GN/REG057
• 1. (1) These regulations may be called the Insolvency and Bankruptcy Board of India

(Insolvency Professionals) (Amendment) Regulations, 2020. (2) They shall come into force on the 28th March, 2020.

• 2. In the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016

(hereinafter referred to as the principal regulations), in regulation 7, in sub-regulation (2), in clause (ca), the following shall be inserted, namely: — “Provided that for the financial year 2019-2020, an insolvency professional shall pay the fee under this clause on or before the 30th June, 2020.”.

• 3. In the principal regulations, in regulation 13, in sub-regulation (2), -

(i) in clause (b), the following shall be inserted, namely: - “Provided that when an individual ceases to be its director or partner, as the case may be, on and from the date of commencement of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 2020 and ending on the 31st December 2020, the insolvency professional entity shall inform the Board, within thirty days of such cessation;”; (ii) in clause (c), the following shall be inserted, namely: - “Provided that when an individual joins as its director or partner, as the case may be, on and from the date of commencement of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 2020 and ending on the 31st December 2020, the insolvency professional entity shall inform the Board, within thirty days of such joining;”; (iii) in clause (ca), for “Second Schedule; and”, occurring at the end, the following shall be substituted, namely: - “Second Schedule: Provided that for the financial year 2019-2020, an insolvency professional entity shall pay the fee under this clause on or before the 30th June, 2020; and”.

Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate

Persons) (Second Amendment) Regulations, 2020.

• No. IBBI/2019-20/GN/REG056
• 1. (1) These regulations may be called the Insolvency and Bankruptcy Board of India (Insolvency

Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2020. (2) They shall come into force on the 25th March, 2020.

• 2. In the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate

Persons) Regulations, 2016, in regulation 40B, for sub-regulation (4), the following sub-regulation shall be substituted, namely: - “(4) The filing of a Form under this regulation after due date of submission, whether by correction, updation or otherwise, shall be accompanied by a fee of five hundred rupees per Form for each calendar month of delay after 1st October, 2020. Example: A Form is required to be filed by 30th October, 2020. It shall be filed along with a fee as under: If filed on Fee (in Rupees) 29th October, 2020 30th October, 2020 31st October, 2020 500 Any day in November, 2020 1000 Any day in December, 2020

1500”

MINISTRY OF CORPORATE AFFAIRS NOTIFICATION New Delhi, the 24th March, 2020 S.O. 1205(E).—In exercise of the powers conferred by the proviso to section 4 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Central Government hereby specifies one crore rupees as the minimum amount of default for the purposes of the said section. From PM Speech on 24th March 2020 Section 7, 9 and 10 of IBC may be suspended for 6 months if the situation of COVID-19 continued like this after 30th April 2020.

NOTIFICATION New Delhi, the 21st March, 2020

• No. 11/2020–Central Tax

G.S.R. 194(E).—In exercise of the powers conferred by section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act), the Government, on the recommendations of the Council, hereby notifies those registered persons (hereinafter referred to as the erstwhile registered person), who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), undergoing the corporate insolvency resolution process and the management of whose affairs are being undertaken by interim resolution professionals (IRP) or resolution professionals (RP), as the class of persons who shall follow the following special procedure, from the date of the appointment of the IRP/RP till the period they undergo the corporate insolvency resolution process, as mentioned below.

• 2. Registration.- The said class of persons shall, with effect from the date of appointment of IRP /

RP, be treated as a distinct person of the corporate debtor, and shall be liable to take a new registration (hereinafter referred to as the new registration)in each of the States or Union territories where the corporate debtor was registered earlier, within thirty days of the appointment of the IRP/RP: Provided that in cases where the IRP/RP has been appointed prior to the date of this notification, he shall take registration within thirty days from the commencement of this notification, with effect from date of his appointment as IRP/RP.

• 3. Return.- The said class of persons shall, after obtaining registration file the first return under

section 40 of the said Act, from the date on which he becomes liable to registration till the date on which registration has been granted.

• 4. Input tax credit.-(1)The said class of persons shall, in his first return, be eligible to avail input tax

credit on invoices covering the supplies of goods or services or both, received since his appointment as IRP/RP but bearing the GSTIN of the erstwhile registered person, subject to the conditions of Chapter V of the said Act and the rules made thereunder, except the provisions of sub-section (4) of section 16 of the said Act and sub-rule (4) of rule 36 of the Central Goods and Service Tax Rules, 2017 (hereinafter referred to as the said rules). (2) Registered persons who are receiving supplies from the said class of persons shall, for the period from the date of appointment of IRP / RP till the date of registration as required in this notification or thirty days from the date of this notification, whichever is earlier, be eligible to avail input tax credit

• n invoices issued using the GSTIN of the erstwhile registered person, subject to the conditions of

Chapter V of the said Act and the rules made thereunder, except the provisions of sub-rule (4) of rule 36 of the said rules. (5) Any amount deposited in the cash ledger by the IRP/RP, in the existing registration, from the date

• f appointment of IRP/RP to the date of registration in terms of this notification shall be available for

refund to the erstwhile registration. Explanation.- For the purposes of this notification, the terms ―corporate debtor‖, ―corporate insolvency resolution professional‖, ―interim resolution professional‖ and ―resolution professional‖ shall have the same meaning as assigned to them in the Insolvency and Bankruptcy Code, 2016 (31 of 2016).

MINISTRY OF HOME AFFAIRS (Department of Jammu, Kashmir and Ladakh Affairs) ORDER New Delhi, the 18th March, 2020 S.O. 1123(E).—In exercise of the powers conferred by section 96 of the Jammu and Kashmir Reorganization Act, 2019 (34 of 2019), and of all other powers enabling it in that behalf, the Central Government hereby makes the following Order in respect of the Union territory of Jammu and Kashmir, namely: –

• 1. (1) This Order may be called the Jammu and Kashmir Reorganisation (Adaptation of Central Laws)

Order, 2020. (2) It shall come into force with immediate effect.

• 2. The General Clauses Act, 1897 applies for the interpretation of this Order as it applies for interpretation
• f laws in force in the territory of India.
• 3. With immediate effect, the Acts mentioned in the Schedule to this Order shall, until repealed or amended

by a competent Legislature or other competent authority, have effect, subject to the adaptations and modifications directed by the Schedule to this Order, or if it is so directed, shall stand repealed.

• 4. Where this Order requires that in any specified section or other portion of an Act, certain words shall be

substituted for certain other words, or the certain words shall be omitted, such substitution or omission, as the case may be, shall, except where it is otherwise expressly provided, be made wherever the words referred to occur in thatsec tion or portion.

• 5. The provisions of this Order which adapt or modify any law so as to alter the manner in which, the

authority by which or the law under or in accordance with which, any powers are exercisable, shall not render invalid any notification, order, commitment, attachment, bye-law, rule or regulation duly made or issued, or anything duly done before the 31st day of October, 2019; and any such notification, order commitment, attachment, bye-law, rule, regulation or anything may be revoked, varied or undone in the like manner, to the like extent and in the like circumstances as if it had been made, issued or done after the commencement of this Order by the competent authority and in accordance with the provisions then applicable to such case.

• 6. (1) The repeal or amendment of any law specified in the Schedule to this Order shall not affect—

(a) the previous operation of any law so repealed or anything duly done or suffered thereunder; (b) any right, privilege, obligation or liability acquired, accrued or incurred under any law so repealed; (c) any penalty, forfeiture or punishment incurred in respect of any offence committed against any law so repealed; or (d) any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid and any such investigation, legal proceeding

• r remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment

may be imposed, as if the Jammu and Kashmir Reorganisation Act, 2019 or this Order had not come into force. (2) Subject to the provisions of sub-paragraph (1), anything done or any action taken (including any appointment or delegation made, notification, instruction or direction issued, form, bye-law or scheme framed, certificate obtained, permit or licence granted or registration effected or agreement executed) under any such law shall be deemed to have been done or taken under the corresponding provisions of the Central Laws now extended and applicable to the Union territory of Jammu and Kashmir and shall continue to be in force accordingly unless and until superseded by anything done or any action taken under the Central Laws now extended to the Union territory of Jammu and Kashmir.

THE SCHEDULE (See Paragraph 3) CENTRAL LAWS

• 1. THE ADVOCATES ACT, 1961
• 2. THE ALL INDIA SERVICES ACT, 1951
• 3. THE ANCIENT MONUMENTS AND ARCHAEOLOGICAL SITES AND REMAINS ACT, 1958
• 4. THE ARBITRATION AND CONCILIATION ACT, 1996
• 5. THE CENSUS ACT, 1948
• 6. THE CENTRAL GOODS AND SERVICES TAX ACT, 2017
• 7. THE CINEMATOGRAPH ACT, 1952
• 8. THE CODE OF CIVIL PROCEDURE, 1908
• 9. THE CODE OF CRIMINAL PROCEDURE, 1973
• 10. THE COLLECTION OF STATISTICS ACT, 2008
• 11. THE COMMISSIONS OF INQUIRY ACT, 1952
• 12. THE COURT-FEES ACT, 1870
• 13. THE DENTISTS ACT, 1948
• 14. THE FAMILY COURTS ACT, 1984
• 15. THE GOVERNMENT SECURITIES ACT, 2006
• 16. THE HIGH COURT JUDGES (SALARIES AND CONDITIONS OF SERVICES) ACT, 1954
• 17. THE HOMEOPATHY CENTRAL COUNCIL ACT, 1973
• 18. THE IMMORAL TRAFFIC (PREVENTION) ACT, 1956
• 19. THE INCOME-TAX ACT, 1961
• 20. THE INDIAN FOREST ACT, 1927
• 21. THE INDIAN MEDICINE CENTRAL COUNCIL ACT, 1970
• 22. THE INDIAN PENAL CODE, 1860
• 23. THE INSOLVENCY AND BANKRUPTCY CODE, 2016
• 24. THE LIMITATION ACT, 1963
• 25. THE NATIONAL CO-OPERATIVE DEVELOPMENT CORPORATION ACT, 1962
• 26. THE OFFICIAL LANGUAGES ACT, 1963
• 27. THE PRESS AND REGISTRATION OF BOOKS ACT, 1867
• 28. THE PRESS COUNCIL ACT, 1978
• 29. THE PREVENTION OF CORRUPTION ACT, 1988
• 30. THE PROTECTION OF HUMAN RIGHTS ACT, 1993
• 31. THE PUBLIC DEBT ACT, 1944
• 32. THE RAILWAY PROPERTY (UNLAWFUL POSSESSION) ACT, 1966
• 33. THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016
• 34. THE REPRESENTATION OF PEOPLE ACT, 1950
• 35. THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION,

REHABILITATION AND RESETTLEMENT ACT, 2013

• 36. THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND

ENFORCEMENT OF SECURITY INTEREST ACT, 2002

• 37. THE TEXTILES COMMITTEE ACT, 1963

Summary of relief measures relating to Statutory and Regulatory compliance under Insolvency and Bankruptcy Code 2016 (IBC 2016) in view of COVID-19

• 1. Raised the threshold of default under section 4 of the IBC 2016 to Rs 1 crore (from the existing

threshold of Rs 1 lakh).

• a. Minimum amount of default against Corporate Debtor to go for Resolution Process was Rs. 1 Lakh.

It has been increased to Rs. 1 Crore.

• b. It has been done due to the emerging financial distress faced by most companies on account of the

large-scale economic distress caused by COVID 19.

• c. This will by and large prevent triggering of insolvency proceedings against MSMEs.
• d. If the current situation continues beyond 30th of April 2020, MCA may consider suspending section

7, 9 and 10 of the IBC 2016 for a period of 6 months so as to stop companies at large from being forced into insolvency proceedings in such force majeure causes of default.

• 2. Waiver of addition fee of Rs. 500 per month for delay in filing Forms for CIRP under Regulation 40B

till 30th October 2020. Notification dt. 25th March 2020

• 3. IBBI (Insolvency Professionals) (Amendment) Regulations 2020
• a. Due date of payment of fee by IP and IPE for FY 2019-20 extended to 30.6.2020
• b. When an individual join or ceases to be director or partner of IPE from 28th March 2020 to 31st

December 2020, he shall inform the Board with 30 days of joining or ceasing

• 4. IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment)

Regulations 2020

• a. Where application from 28th March 2020 till 30th September 2020 is made for the authorisation of

assignment is not issued, renewed or rejected by IPA within 30 days of the date of receipt of application, the authorisation shall be deemed to have been issued or renewed

• b. Where application for issue of authorisation for assignment has been rejected by an IPA on and

from 28th March 2020 till 30th September 2020 the applicant aggrieved may appeal to the Membership Committee within 30 days from the date of receipt of order.

• 5. IBBI suspends all enrolment for Limited Insolvency Exams and Valuation Exams till 14th April 2020

THE INSOLVENCY AND BANKRUPTCY CODE, 2016 NO. 31 OF 2016 [28th May, 2016] An Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability

• f credit and balance the interests of all the stakeholders including alteration in the order of

priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto. BE it enacted by Parliament in the Sixty-seventh Year of the Republic of India as follows:

• 1. Short title, extent and commencement. -

(1) This Code may be called the Insolvency and Bankruptcy Code, 2016. (2) It extends to the whole of India: Provided that Part III of this Code shall not extend to the state of Jammu and Kashmir. (3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint: Provided that different dates may be appointed for different provisions of this Code and any reference in any such provision to the commencement of this Code shall be construed as a reference to the commencement of that provision.

• 2. Application. –

The provisions of this Code shall apply to— (a) any company incorporated under the Companies Act, 2013 (18 of 2013) or under any previous company law; (b) any other company governed by any special Act for the time being in force, except in so far as the said provisions are inconsistent with the provisions of such special Act; (c) any Limited Liability Partnership incorporated under the Limited Liability Partnership Act, 2008 (6 of 2009); (d) such other body incorporated under any law for the time being in force, as the Central Government may, by notification, specify in this behalf; 1[***] [1 (e) personal guarantors to corporate debtors; (f) partnership firms and proprietorship firms; and (g) individuals, other than persons referred to in clause (e).]

in relation to their insolvency, liquidation, voluntary liquidation or bankruptcy, as the case may be.

• 3. Definitions

4. Application of this Part. – (1) This Part shall apply to matters relating to the insolvency and liquidation of corporate debtors where the minimum amount of the default is one lakh rupees: Provided that the Central Government may, by notification, specify the minimum amount of default of higher value which shall not be more than one crore rupees.

• 5. Definitions

6. Persons who may initiate corporate insolvency resolution process. – Where any corporate debtor commits a default, a financial creditor, an operational creditor or the corporate debtor itself may initiate corporate insolvency resolution process in respect of such corporate debtor in the manner as provided under this Chapter. 7. Initiation of corporate insolvency resolution process by financial creditor.

• 8. Insolvency resolution by operational creditor.

An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed. The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor -

• a. existence of a dispute, 1[if any, or] record of the pendency of the suit or

arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute; (b) the 1[payment] of unpaid operational debt-

• i. by sending an attested copy of the record of electronic transfer of

the unpaid amount from the bank account of the corporate debtor; or

• ii. by sending an attested copy of record that the operational

creditor has encashed a cheque issued by the corporate debtor.

• Explanation. – For the purposes of this section, a “demand notice” means a

notice served by an operational creditor to the corporate debtor demanding

2[payment] of the operational debt in respect of which the default has occurred.

• 9. Application for initiation of corporate insolvency resolution process by
• perational creditor.
• 10. Initiation of corporate insolvency resolution process by corporate applicant
• 11. Persons not entitled to make application. -

The following persons shall not be entitled to make an application to initiate corporate insolvency resolution process under this Chapter, namely: -

• a. a corporate debtor undergoing a corporate insolvency resolution

process; or

• b. a corporate debtor having completed corporate insolvency resolution

process twelve months preceding the date of making of the application; or

• c. a corporate debtor or a financial creditor who has violated any of the

terms of resolution plan which was approved twelve months before the date

• f making of an application under this Chapter; or
• d. a corporate debtor in respect of whom a liquidation order has been

made.

• Explanation. - For the purposes of this section, a corporate debtor includes a

corporate applicant in respect of such corporate debtor.

• 12. Time-limit for completion of insolvency resolution process.

[12A. Withdrawal of application admitted under section 7, 9 or 10

• 13. Declaration of moratorium and public announcement
• 14. Moratorium
• 15. Public announcement of corporate insolvency resolution process
• 16. Appointment and tenure of interim resolution professional
• 17. Management of affairs of corporate debtor by interim resolution professional
• 18. Duties of interim resolution professional
• 19. Personnel to extend co-operation to interim resolution professional
• 20. Management of operations of corporate debtor as going concern
• 21. Committee of creditors
• 22. Appointment of resolution professional
• 23. Resolution professional to conduct corporate insolvency resolution process
• 24. Meeting of committee of creditors
• 25. Duties of resolution professional
• 25A. Rights and duties of authorised representative of financial creditors
• 26. Application for avoidance of transactions not to affect proceedings
• 27. Replacement of resolution professional by committee of creditors
• 28. Replacement of resolution professional by committee of creditors
• 29. Preparation of information memorandum
• 29A. Persons not eligible to be resolution applicant
• 30. Submission of resolution plan
• 31. Approval of resolution plan
• 32. Appeal. -

Any appeal from an order approving the resolution plan shall be in the manner and

• n the grounds laid down in sub-section (3) of section 61.