The Insolvency and Bankruptcy Board of India (IBBI) on 18 September notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023. This introduces a set of amendments to the regulations governing the insolvency resolution process for corporate entities in India.
“To facilitate smooth conduct of the corporate insolvency resolution process (CIRP), the amendment regulations add a provision regarding the assistance and co-operation expected from the personnel of the corporate debtor (CD) by providing a detailed procedure for taking custody and control of assets and records of the CD by the resolution professional (RP),” said the IBBI press release.
Notable alterations include a heightened requirement for creditors to furnish intricate details and supporting evidence of debt history, defaults and limitations when initiating the corporate insolvency resolution process for a corporate debtor.
The amendments delineate the process by which the RP gains custody and control over the assets and records of the corporate debtor while ensuring co-operation from corporate debtor personnel.
The revised timelines for claim submissions extend until the issuance of a request for resolution plans, or up to 90 days from the insolvency commencement date, with the aim of alleviating the workload on the National Company Law Tribunals, as announced in a press release by the IBBI on 19 September 2023.
These amendments bolster the role and responsibilities of authorised representatives (ARs), particularly concerning homebuyers, who will now be more deeply involved in tasks like reviewing RP-prepared minutes, aiding creditors in evaluating resolution plans, facilitating regular updates, and enabling plan modifications. The fees for ARs have increased, accompanied by the introduction of a procedure for AR replacement.
Any committee member can now propose an audit of the corporate debtor and, if sanctioned by the committee, the audit costs will be considered a part of the CIRP expenses. The CIRP amendments harmonise procedural timelines, simplify the invitation for expressions of interest for corporate debtors, and bring changes to compliance certificates that now incorporate the committee of creditors minutes.
These changes, which came into effect on 18 September, align “the timelines concerning various procedural aspects like issuance of information memorandum and request for resolution plans”, the press release said.