Know all about the IBBI Circular No. IBBI/LIQ/73/2024 dated 28-06-2024 issued for Filing Forms to monitor liquidation processes under the Insolvency and Bankruptcy Code, 2016, and the regulations made thereunder.
Introduction:
The Circular has been issued by the Insolvency and Bankruptcy Board of India “IBBI” in exercise of the powers under sub-section (1) of section 196 of the Insolvency and Bankruptcy Code, 2016.
During the liquidation process, the liquidator invites claims from stakeholders, forms a liquidation estate, endeavours to sell assets in consultation with the Stakeholders’ Consultation Committee (SCC) and distributes the realized proceeds to stakeholders as per the waterfall mechanism provided under section 53 of the Code.
The Insolvency Professional (IP), functioning as a liquidator, is also required to ensure compliance with legal requirements and reporting to the Adjudicating Authority (AA) and IBBI. Presently, the IPs submit the details regarding the liquidation process to the Board through emails, which is time-consuming and inefficient.
Purpose of Circular:
To ease the compliance burden for Insolvency Professionals (IPs), a set of electronic forms has been developed by the Board to capture the details of the liquidation process. These forms are crucial for the liquidation process under the Insolvency and Bankruptcy Code (IBC), as they facilitate systematic and transparent record-keeping and seamless reporting. The key benefits of these forms include:
- Enhancing the efficiency and effectiveness of the liquidation process.
- Allowing liquidators to easily access and submit forms online, reducing delays and improving efficiency.
- Minimizing the likelihood of errors and omissions, ensuring more accurate and reliable information.
An overview of these Forms:
| Form No | Period Covered and Scope | Timeline |
| LIQ 1 | From Commencement of Liquidation till Public Announcement: This includes details of the Liquidator, Corporate Debtor (CD), and the liquidator’s fee | On or before the 10th day of the subsequent month, after a public announcement has been made. |
| LIQ 2 | From Public Announcement till Progress Report: This includes details of valuation, sale, litigations, PUFE, SCC meetings, Receipts and Payments. | On or before the 10th day of the subsequent month, after submission of the Progress report to the AA. |
| LIQ 3 | From last Progress Report to Application for
Dissolution: This includes details of unclaimed proceeds, sale, litigations, PUFE, Realisation, distribution of proceeds, Receipts and Payments. (The details required in these forms are carried forward from the last Progress Report and hence need not be filled again) |
On or before the 10th day of the subsequent month, after submission of the Dissolution/ closure application to the AA. |
| LIQ 4 | From Application for Dissolution to Order for
Dissolution: This includes details of, the distribution of proceeds, Receipts and Payments, etc. (The details required in these forms are carried forward from the last Progress Report and hence need not be filled again) |
On or before the 14 days of passing of the order for dissolution of corporate debtor closure of the liquidation process by the AA. |
Applicability of Circular:
It is directed that an IP shall file Forms through the electronic platform:
1. within the prescribed timeline for all cases where a liquidation order is passed on or after issuance of this circular.
2. for ongoing cases: Cases in which no application for dissolution of the corporate debtor/closure of the liquidation process has been filed, shall file form LIQ 1 and LIQ 2 (for the March 24 quarter) latest by 30th September 2024.
3. for cases where an application for dissolution of the corporate debtor/closure of the liquidation process has been filed with AA, shall file forms LIQ 1 and LIQ 2 (for the last quarter of the process), and LIQ 3 by 30th September 2024.
4. for cases where an order for closure of the liquidation process or dissolution of the corporation debtor has been ordered by AA, shall file forms LIQ 1 and LIQ 2 (for the last quarter of the process), LIQ 3, and LIQ 4 by 30th September 2024.
Consequences of non-filing:
It is clarified that an IP who do not comply with applicable provisions of the Code and the Regulations made thereunder, shall be liable for:
1. failure to file a Form along with relevant information and records,
2. inaccurate and incomplete information and/or records filed in or along with a Form.
Steps for filing:
The set of forms developed by the Board on an electronic platform has been hosted on its website at https://www.ibbi.gov.in. The IP handling the liquidation assignment shall access the platform with a unique username and password provided by the IBBI and upload/submit the Forms, along with relevant information and records, after affixing DSC or e-signing. Further, timely filing of complete and accurate information along with records is the sole responsibility of the IP.
Author Bio
