IBBI amends the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017

Sep 21, 2022 | by TeamLease RegTech Legal Research Team

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Secretarial ComplianceThe Insolvency and Bankruptcy Board of India (IBBI) on September 20, 2022, notifies the Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2022 and Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Second Amendment) Regulations, 2022 dated September 16, 2022, to enable better participation of stakeholders and streamline the liquidation process to reduce delays and realise better value. 

The following amendment in Regulations have been stated:

• The Committee of Creditors (CoC) constituted during Corporate Insolvency Resolution Process (CIRP) shall function as Stakeholders Consultation Committee (SCC) in the first 60 days. After adjudication of claims and within 60 days of initiation of process, the SCC shall be reconstituted based upon admitted claims.

• The scope of mandatory consultation by liquidator, with SCC has been enlarged. Now, SCC may even propose replacement of liquidator to the Adjudicating Authority (AA) and fix the fees of liquidator, if the CoC did not fix the same during CIRP

• Wherever the CoC decides that the process of compromise or arrangement may be explored during the liquidation process, the liquidator shall file an application only in such cases before Adjudicating Authority for considering the proposal of compromise or arrangement, if any, within thirty days of the order of liquidation.

• Before filing an application for dissolution or closure of the process, SCC shall advise the liquidator, on the manner in which proceedings in respect of avoidance transactions or fraudulent or wrongful trading, shall be pursued after the closure of liquidation proceedings.

The amended regulations further lay down the manner and period of retention of records relating to liquidation and voluntary liquidation of a corporate debtor or corporate person, respectively.

These amended regulations are available at www.mca.gov.in and www.ibbi.gov.in. The regulations will come into force on September 16, 2022. 

[Press Release No. IBBI/PR/2022/37]


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