Introduction: Stay updated on the recent amendments introduced by the Insolvency and Bankruptcy Board of India (IBBI) on January 31, 2024. These amendments, spanning regulations related to insolvency professionals, voluntary liquidation, professional governance, and bankruptcy processes, bring notable changes aimed at enhancing efficiency and compliance within the insolvency framework.
IBBI has brought amendments in 5 regulations as on 31st Jan 2024, which are briefly enumerated as follows : –
1. Amendment in Insolvency Professionals Regulations as follows : –
a. New Clause 22A has been inserted in First Schedule to provide that now IP can resign from assignment on recommendation of COC/SCC/Debtor/Creditor subject to approval by AA
b. New Clause 23B has been inserted in First Schedule to provide that now IPE who is IP also may engage or appoint its partners or directors in connection with any work relating to any of its assignment other than work related to valuation and audit of the debtor
c. New Clause 23C has been inserted in First Schedule to provide that now IPE who is IP also may provide any service, other than service related to valuation and audit, for or in connection with the assignment which is being undertaken by any of its partners or directors, as the case may be.
Read: IBBI (Insolvency Professionals) (Amendment) Regulations, 2024
2. Amendment in Model Bye-Laws and Governing Board of Insolvency Professional Agencies.
a. In the Schedule, in para VI, in clause 12A, sub-clause (6) has been substituted to provide that an authorisation for assignment issued or renewed by the Agency shall be valid till 30th June/31st Dec on renewal subject to age restriction of 75 years. It will facilitate empanelment for the whole year with IBBI instead of 6 months at present.
3. Amendment in Voluntarily Liquidation Process Regulations
a. New sub clause (iii) is added to Regulation 3(1) (a) to provide that CD has made sufficient provision to meet the obligations arising on account of pending matters as mentioned in newly inserted sub-clause (iii) of clause (b) (see below).
b. New sub clause (iii) is added to Regulation 3(1) (b) to provide disclosure of pending proceedings or assessments before statutory authorities, and pending litigations, in respect of the CD.
c. Regulation 8 (1) (b) has been amended to omit Annual Now it shall be only Status Report.
d. Regulation 37 (2) wrt Completion of Liquidation has been amended to provide that if liquidation Process continues for more than 270/90 days than Liquidator shall hold meeting of contributories within 15 days from the end of this period & all succeeding period of 270/90 days till submission of dissolution application and also give reasons for not completing the process within stipulated time period and the additional time required for completing the process by inserting a new clause vii) therein.
e. Further new sub regulation is also inserted to provide filing of status report within 7 days of meeting of contributories with IBBI.
f. Further regulation 39 has also been amended to provide whereas stakeholder can claim his amount deposited by Liquidator in Corporate Voluntary Liquidation Account from Liquidator before dissolution by filing Form I. Earlier stakeholder was entitled to claim from IBBI only.
Read: IBBI (Voluntary Liquidation Process) (Amendment) Regulations, 2024
4. Amendment in PG to CD Regulation
a. Explanation to Regulation 4 has been amended to allow IRP/RP/Liquidator to act as RP for PG cases
b. New Regulation 17A has been inserted to provide that in case of non-receipt of Repayment Plan, RP shall inform Meeting of Creditor that no repayment plan has been received.
5. Amendment in Bankruptcy Process PG to CD Regulation
c. Explanation to Regulation 3 has been amended by omitting sub regulation clause (1)(c) to allow IRP/RP/Liquidator to act as Bankruptcy Trustee.
d. Proviso (c) to Regulation 5 has been amended to make IRP/RP/Liquidator eligible to be appointed as Professionals.
Read: IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 2024
Conclusion: The amendments, ranging from empowering insolvency professionals to streamlining voluntary liquidation and bankruptcy processes, mark a strategic move by IBBI. The changes aim to bolster transparency, provide additional roles for professionals, and facilitate smoother proceedings in the insolvency landscape. As of January 31, 2024, these regulatory modifications are set to influence the dynamics of the insolvency and bankruptcy ecosystem.
Details of 5 Notifications issued by IBBI on 31st January 2024 are as follows;-
| IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 2024 | Notification No. IBBI/2023-24/GN/REG111 | 31/01/2024 |
| IBBI (Insolvency Professionals) (Amendment) Regulations, 2024 | Notification No. IBBI/2023-24/GN/REG 110 | 31/01/2024 |
| IBBI (Voluntary Liquidation Process) (Amendment) Regulations, 2024 | Notification No. IBBI/2023-24/GN/REG109 | 31/01/2024 |
| IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 2024 | Notification No. IBBI/2023-24/GN/REG108 | 31/01/2024 |
| IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 2024 | Notification No. IBBI/2023-24/GN/REG107 | 31/01/2024 |
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Manoj Kumar Anand, a distinguished Chartered Accountant and Insolvency Professional based in Delhi, operates from 2 Community Center, 3rd Floor, Naraina, New Delhi-110028. With a wealth of experience, he has been actively engaged in approximately 14 assignments as an Insolvency Resolution Professional (IRP), Resolution Professional (RP), Liquidator, and Process Advisor under the Insolvency and Bankruptcy Code of 2016 (IBC). Mr. Anand, demonstrating his expertise, has co-authored a book on Valuation and holds the esteemed position of Founder President at `AIIPA’ (Association of Insolvency Professional). For inquiries, he can be reached via email at anandmanoja@gmail.com or by phone at 9811280787.
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