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INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (INSOLVENCY
RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 20161
[AMENDED UPTO 09.02.2022 ]
IBBI/2016-17/GN/REG004. - In exercise of the powers conferred under sections 5, 7, 9, 14, 15,
17, 18, 21, 24, 25, 29, 30, 196 and 208 read with section 240 of the Insolvency and Bankruptcy
Code, 2016 (31 of 2016), the Insolvency and Bankruptcy Board of India hereby makes the
following Regulations, namely-
CHAPTER I
PRELIMINARY
1.
Short title and commencement.
(1)
These Regulations may be called the Insolvency and Bankruptcy Board of India
(Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
(2)
These Regulations shall come into force on 1st December, 2016.
(3)
These Regulations shall apply to the corporate insolvency resolution process.
2.
Definitions.
(1)
In these Regulations, unless the context otherwise requires-
(a)
“applicant” means the person(s) filing an application under sections 7, 9 or 10, as
the case may be;
2[(aa) “class of creditors” means a class with at least ten financial creditors under clause
(b) of sub-section (6A) of section 21 and the expression, “creditors in a class” shall
be construed accordingly.]
(b)
“Code” means the Insolvency and Bankruptcy Code, 2016;
(c)
“Code of Conduct” means the code of conduct for insolvency professionals as set
out in the Insolvency and Bankruptcy Board of India (Insolvency Professionals)
Regulations, 2016;
(d)
“committee” means a committee of creditors established under section 21;
1Vide Notification No. IBBI/2016-17/GN/REG004, dated 30th November, 2016, published in the Gazette of India,
Extraordinary, Part III, Sec.4, vide No. 432, dated 30th November, 2016 (w.e.f. 01-12-2016).
2Inserted by Notification No. IBBI/2018-19/GN/REG031, dated 3rd July, 2018 (w.e.f. 04-07-2018).
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(e)
“corporate insolvency resolution process” means the insolvency resolution
process for corporate persons under Chapter II of Part II of the Code;
(f)
3[***]
(g)
“electronic form” shall have the meaning assigned to it in the Information
Technology Act, 2000 (21 of 2000);
(h)
“electronic means” mean an authorized and secured computer programme which
is capable of producing confirmation of sending communication to the participant
entitled to receive such communication at the last electronic mail address
provided by such participant and keeping record of such communication.
4[“(ha) “evaluation matrix” means such parameters to be applied and the manner of
applying such parameters, as approved by the committee, for consideration of
resolution plans for its approval;
(hb)“fair value” means the estimated realizable value of the assets of the
corporate debtor, if they were to be exchanged on the insolvency commencement
date between a willing buyer and a willing seller in an arm’s length transaction,
after proper marketing and where the parties had acted knowledgeably, prudently
and without compulsion.]
(i)
“identification number” means the Limited Liability Partnership Identification
Number or the Corporate Identity Number, as the case may be;
(j)
“insolvency professional entity” means an entity recognised as such under the
Insolvency and Bankruptcy Board of India (Insolvency Professionals)
Regulations, 2016;
(k) 5[“liquidation value” means the estimated realizable value of the assets of the
corporate debtor, if the corporate debtor were to be liquidated on the insolvency
commencement date.]
(l)
“participant” means a person entitled to attend a meeting of the committee under
section 24 or any other person authorised by the committee to attend the meeting;
3Omitted by Notification No. IBBI/2018-19/GN/REG032, dated 5th October, 2018 (w.e.f. 05.10.2018). Prior to
omission, clause (f) stood as under:-
“dissenting financial creditor” means a financial creditor who voted against the resolution plan or abstained from
voting for the resolution plan, approved by the committee;”
4Inserted by Notification No. IBBI/2017-18/GN/REG024, dated 6th February, 2018 (w.e.f. 06-02-2018).
5Substituted by Notification no. IBBI/2017-18/GN/REG024, dated 6th February, 2018 (w.e.f. 06-02-2018). Clause
(k), before substitution, stood as under: -
“2(k) “liquidation value” means the amount determined in accordance with Regulation 35;”
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(m)
“registered valuer” means a person registered as such in accordance with the
Companies Act, 2013(18 of 2013) and rules made thereunder;
(n)
“Schedule” means the schedule to these Regulations;
(o)
“section” means section of the Code;
(p)
“video conferencing or other audio and visual means” means such audio and
visual facility which enables the participants in a meeting to communicate
concurrently with one another and to participate effectively in the meeting.
(2)
Unless the context otherwise requires, words and expressions used and not defined in
these Regulations, but defined in the Code, shall have the meanings assigned to them in
the Code.
6[2A. Record or evidence of default by financial creditor.
For the purposes of clause (a) of sub-section (3) of section 7 of the Code, the financial creditor
may furnish any of the following record or evidence of default, namely:-
(a) certified copy of entries in the relevant account in the bankers’ book as defined in clause (3)
of section 2 of the Bankers’ Books Evidence Act, 1891 (18 of 1891);
(b)an order of a court or tribunal that has adjudicated upon the non-payment of a debt, where the
period of appeal against such order has expired.]
CHAPTER II
GENERAL
3.
Eligibility for resolution professional.
(1)
An insolvency professional shall be eligible to be appointed as 7[an interim resolution
professional or a resolution professional, as the case may be,] for a corporate insolvency
resolution process of a corporate debtor if he, and all partners and directors of the
insolvency professional entity of which he is a partner or director, are independent of the
corporate debtor.
Explanation– A person shall be considered independent of the corporate debtor, if he:
6Inserted by Notification No. IBBI/2020-21/GN/REG066, dated 13th November, 2020 (w.e.f. 13-11-2020).
7 Substituted by Notification No. IBBI/2021-22/GN/REG075, dated 14th July, 2021 (w.e.f. 14-07-2021). Before
substitution, the words stood as under:
“a resolution professional”.
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(a)
is eligible to be appointed as an independent director on the board of the corporate
debtor under section 149 of the Companies Act, 2013 (18 of 2013), where the
corporate debtor is a company;
(b)
is not a related party of the corporate debtor; or
(c)
is not an employee or proprietor or a partner:
(i)
of a firm of auditors or 8[secretarial auditors] in practice or cost auditors of
the corporate debtor; or
(ii)
of a legal or a consulting firm, that has or had any transaction with the
corporate debtor amounting to 9[five per cent] or more of the gross
turnover of such firm,
in the last three financial years.
10[(1A) Where the committee decides to appoint the interim resolution professional as resolution
professional or replace the interim resolution professional under section 22 or replace the
resolution professional under section 27, it shall obtain the written consent of the
proposed resolution professional in Form AA of the Schedule.]
(2)
11[An interim resolution professional or a resolution professional, as the case may be,]
shall make disclosures at the time of his appointment and thereafter in accordance with
the Code of Conduct.
12[(3) An interim resolution professional or a resolution professional, who is a director or a
partner of an insolvency professional entity, shall not continue as the interim resolution
8Substituted by Notification No. IBBI/2017-18/ GN/ REG030, dated 27th March, 2018 (w.e.f.01-04-2018).
Regulation 3 (1) (c) (i), before substitution, stood as under:
“(i) of a firm of auditors or company secretaries in practice or cost auditors of the corporate debtor; or”.
9Substituted by Notification No. IBBI/2018-19/GN/REG031, dated 3rd July, 2018 (w.e.f. 04-07-2018). Before
substitution, the words stood as under:
“ten per cent”
10Inserted by Notification No. IBBI/2018-19/GN/REG031, dated 3rd July, 2018 (w.e.f. 04-07-2018).
11 Substituted by Notification No. IBBI/2021-22/GN/REG075, dated 14th July, 2021 (w.e.f. 14-07-2021). Before
substitution, the words stood as under:
“a resolution professional”.
12 Substituted by Notification No. IBBI/2021-22/GN/REG075, dated 14th July, 2021 (w.e.f. 14-07-2021). Regulation
3 (3), before substitution, stood as under:
“(3) A resolution professional, who is a director or a partner of an insolvency professional entity, shall not continue
as a resolution professional in a corporate insolvency resolution process if the insolvency professional entity or any
other partner or director of such insolvency professional entity represents any of the other stakeholders in the same
corporate insolvency resolution process.”
