The Insolvency and Bankruptcy Board of India (IBBI) has issued a new circular addressed to all registered insolvency professionals, insolvency professional entities, and insolvency professional agencies, detailing the procedures for depositing and withdrawing unclaimed dividends and undistributed proceeds in voluntary liquidation scenarios. This move, as per Circular No. IBBI/LIQ/68/2024 dated 13th February 2024, aims to streamline the process and ensure transparency and fairness in the distribution of unclaimed amounts.
Detailed Analysis
The IBBI’s recent circular emphasizes the importance of adhering to Regulation 39 of the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017. This regulation provides a comprehensive framework for managing unclaimed deposits and undistributed proceeds during the voluntary liquidation process. Specifically, it mandates liquidators to deposit any unclaimed or undistributed amounts into the Corporate Voluntary Liquidation Account and subsequently report these details to the IBBI using Form-G, which includes information on the stakeholders entitled to these deposits.
Furthermore, the circular outlines a procedure for stakeholders who claim entitlement to any deposited amount in the Corporate Voluntary Liquidation Account. These stakeholders can request a withdrawal before the dissolution of the corporate entity. Liquidators are required to apply to the IBBI for the release of such amounts, ensuring the funds are distributed to the rightful stakeholders.
This directive is issued under the powers conferred by section 196 of the Insolvency and Bankruptcy Code, 2016, highlighting the IBBI’s authority to regulate and oversee the insolvency and bankruptcy processes within India. The annexure attached to the circular provides a detailed format for liquidators to request the withdrawal of funds from the Corporate Voluntary Liquidation Account for distribution to stakeholders, ensuring a structured and transparent process.
Conclusion
The IBBI’s latest circular is a significant step towards enhancing the efficiency and transparency of the voluntary liquidation process in India. By establishing clear guidelines for the deposit and withdrawal of unclaimed dividends and undistributed proceeds, the IBBI aims to protect the interests of stakeholders and ensure that funds are distributed fairly and promptly. This initiative reflects the IBBI’s commitment to improving the insolvency and bankruptcy framework in India, fostering trust and confidence among investors, creditors, and other participants in the insolvency ecosystem.
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Insolvency and Bankruptcy Board of India
7th Floor, Mayur Bhawan, Connaught Place, New Delhi-110001
Circular No. IBBI/LIQ/68/2024 Dated: 13th February, 2024
To
All Registered Insolvency Professionals
All Recognised Insolvency Professional Entities All Registered Insolvency Professional Agencies
(By mail to registered email addresses and on the website of the IBBI)
Dear Madam/Sir,
Sub: Deposit and withdrawal of unclaimed dividends and / or undistributed proceeds in accordance with regulation 39 of the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017.
1. Regulation 39 of the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 provides a framework for the management of unclaimed deposits and undistributed proceeds during the voluntary liquidation process. As per the regulation, liquidators are mandated to deposit unclaimed / undistributed amounts into the Corporate Voluntary Liquidation Account and inform the Insolvency and Bankruptcy Board of India (IBBI / Board) in Form-G containing the details regarding the stakeholders entitled to such deposited
2. To facilitate the request received from a stakeholder, under regulation 39(7), who claims to be entitled to any amount deposited into the Corporate Voluntary Liquidation Account for withdrawal before the dissolution of the corporate person, the liquidator shall apply to the Board in the form as per Annexure, for the release of the amount for onward distribution to the stakeholders.
3. This is issued in exercise of the powers conferred under section 196 of the Insolvency and Bankruptcy Code, 2016.
Yours faithfully,
-Sd-
(Rajesh Tiwari)
General Manager
Annexure
Request by liquidator for withdrawal from Corporate Voluntary Liquidation Account for onward distribution to the stakeholders under regulation 39 of the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017.
Details of withdrawal request –
|
Sl. No. |
Description | Particulars |
| (1) | (2) | (3) |
| 1 | Name of the Corporate Person | |
| 2 | Identification Number of Corporate Person (CIN/LLPIN) | |
| 3 | Voluntary Liquidation Commencement Date | |
| 4 | Date of Deposit into the Corporate Voluntary Liquidation Account | |
| 5 | Acknowledgement number issued by the Board | |
| 6 | Amount (Rs.) deposited into Corporate Voluntary Liquidation Account | |
| 7 | Amount (Rs.) being requested for withdrawal | |
| 8 | Name of the stakeholder to whom the amount proposed to be distributed | |
| 9 | S.No. at which name of stakeholders appeared in the list submitted to the Board | |
| 10 | Reason for earlier non-distribution of such an amount | |
| 11 | Justification for the present request | |
| 12
|
Details of the account where the amount is to be refunded | |
| a. Name of the Bank
b. Account number c. Bank Name and address d. MICR e. IFSC Code (Supported by copy of cancelled cheque) |
||
I (Name of Liquidator) hereby certify that the details provided in this Form are true and correct to the best of my knowledge and belief, and nothing material has been concealed.
(Signature)
Name of the Liquidator
IP Registration No:
Address as registered with the Board:
Email ID as registered with the Board:
Date:
Place:
