Filing of NCLT Orders With Roc With Respect To The Companies Under Insolvency Bankrupcy Code (IBC, 2016)
BACKGROUND
After the introduction of the Insolvency and Bankruptcy Code, 2016 (IBC), Corporate Debtor, Resolution professionals were facing several issues, this involves meeting various statutory compliance requirements for which the management of the corporate debtor was responsible prior to commencement of the Corporate Insolvency Resolution Process (CIRP) which includes periodic Compliances also.
Filings related to NCLT orders were also hampered because of unavailability of Digital Signatures of the Directors or No cooperation from the management of corporate debtors. Even IRP/RPs were not allowed to file e forms with their Digital Signatures and there was no mandate from the Ministry of Corporate Affairs to file such orders with the concerned Registrar of Companies.
AMENDMENT
MCA vide Circular No. 4/2020 on 17/02/2020 issued a clarification regarding the procedure for filing of forms on MCA by the Insolvency Professional (Interim Resolution Professional (IRP) or Resolution Professional (RP) or Liquidator) appointed under Insolvency Bankruptcy Code, 2016.
In supersession of earlier Circular No. 4/2020 on 17/02/2020, the Ministry of Corporate Affairs (MCA) has issued the clarification for statutory compliances in respect of companies under Corporate Insolvency Resolution Process (CIRP).
Through these circulars Ministry of Corporate Affairs (MCA) mandated the filing of NCLT order for CIRP or Liquidation process under the IBC, 2016. This circular provides for the mandatorily filing of INC-28 for NCLT order to Registrar of Companies on the part of IRP (Interim Resolution Professional) or RP (Resolution Professional) or Liquidator appointed under Insolvency Bankruptcy Code, 2016 (IBC, 2016) with respect to:
- Admission in CIRP
- Replacement of IRP/RP
- Withdrawal of CIRP
- Approval of Resolution plan
- Order of Liquidation
- Order of Dissolution
Major points as per the said amendment are:
1. The IRP/ RP/ Liquidator would have to first file the NCLT order approving him as the IRP/ RP/ Liquidator in Form INC-28 by selecting the drop down box in field S(a)(iii) by selecting the appropriate section of IBC 2016. After filing in the form, the IRP/ RP/Liquidator while affixing his DSC, shall choose his designation as “CEO’ in the declaration box for the purpose of filing only and choose “Others” from the Drop down Menu.
2. After approval of the form, the IRP/ RP/ Liquidator shall be responsible for filing all the e forms in the MCA portal and sign the form in the capacity of CEO in order to meet filing protocol in the existing forms architecture. However, this shall in no way affect his legal status as IRP/ RP/ Liquidator. All filings of e forms including AOC-4 and MGT-7 shall be filed through e-form GNL-2 by way of attachments till the company is under CIRP. In the existing field no. 3 of form no. GNL-2, IRP/ RP/ Liquidator will choose radio button “Filings under IBC”.
3. Against date of event and Board Resolution in INC-28 and GNL-2, date of order of NCLT/NCLAT/Court may be mentioned.
4. Companies which are marked under CIRP in the Registry, Annual Return (e-form No.MGT-7) and Financial Statement (e-form AOC-4) and other documents under the provisions of the Companies Act, 2013, in accordance with directions issued by the NCLT/ NCLAT/Courts, shall be filed as attachments with e-form GNL-2 against the payment of one time normal fee only, till such time the company remains under CIRP. Separate GNL-2 forms shall be filed for each such document, by the IRP/RP.
The above mentioned circulars also mandated for filing of earlier NCLT orders for the companies which were under CIRP prior to the issue of this circular on the part of IRP/RP/Liquidator.
The concerned IRP/RP of every company which was under CIRP prior to the issue of this circular, also needs to file e-form INC-28 for such companies and thereafter proceed to file other documents/fact/ information as required under the Act and Rules thereunder through e-form GNL-2.
ISSUES FACING BY PROFESSIONALS
Since IRP/RP/Liquidator needs to file NCLT orders in e form INC 28 with the concerned ROCs which was concluded before the above mentioned circulars, the concerned ROCs are asking for condonation of delay which has been a major problems for professionals as the companies are already in debt and ROCs are asking for filing petitions for condonation for delays which is a costly and time consuming process. Also if the Ministry has come up with the circular at later stage then the concerned ROCs need not to ask for resubmission on grounds of late filing of the orders.
The IRP/RP/Liquidator also receiving resubmissions on grounds of filing certified true copy of the order, as we have already aware about the pandemic caused by the COVID-19, the NCLTs are working on virtual mode, therefore professionals are not able to get the Certified True copies of the orders on time and getting resubmissions on the forms filed by them.
Another issue which they are facing is that after approval of the e form INC 28, name of the IRP/RP/Liquidator are not reflecting on the signatory details of the company, therefore they are not able to file further forms with respect to the change in management of the corporate debtor. Ministry of Corporate Affairs (MCA) needs to come up with the resolution with respect to the issues which are still existing so that the professionals may work for the best interest of the stakeholders.
This insight is intended only as a general discussion of the issues & is not intended for any solicitation of work. Further, it should not be regarded as a Legal advice and no legal or business decisions should be based on its content.
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