The Insolvency and Bankruptcy Board of India (IBBI) has issued the “Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 2024,” exercising powers conferred by the Insolvency and Bankruptcy Code, 2016. The amendments aim to refine and enhance the insolvency resolution process for personal guarantors to corporate debtors.
Key Amendments:
1. Explanation in Regulation 4: In Regulation 4 of the principal regulations, amendments have been made in the Explanation of sub-regulation (1), clause (i). The changes include:
- Sub-clause (a): Insertion of the word “and” after the word and mark “guarantor;”.
- Sub-clause (b): Substitution of the mark “.” for the mark and word “; and”.
- Sub-clause (c): Omission of sub-clause (c).
These modifications enhance the clarity and structure of the explanation in Regulation 4.
2. Insertion of Regulation 17A: A new regulation, 17A, has been inserted after regulation 17. Regulation 17A mandates the resolution professional to place the repayment plan mentioned under section 105 before the creditors in a meeting for their consideration. Additionally, if no repayment plan is received within the stipulated period under section 106, the resolution professional must notify the same in a meeting of creditors.
Conclusion: The amendments introduced by the Insolvency and Bankruptcy Board of India focus on streamlining and reinforcing the insolvency resolution process for personal guarantors to corporate debtors. The changes in Regulation 4’s explanation enhance its coherence, while the addition of Regulation 17A introduces a structured process for presenting repayment plans to creditors and ensures timely notification in case of non-receipt of repayment plans. These amendments contribute to a more robust regulatory framework for handling insolvency cases involving personal guarantors and align with the broader objectives of the Insolvency and Bankruptcy Code, 2016. Stakeholders and professionals involved in the insolvency resolution process need to be aware of these changes for effective compliance.
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INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
NOTIFICATION
New Delhi, the 31st January, 2024
Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 2024
No. IBBI/2023-24/GN/REG107.—In exercise of the powers conferred by clause (t) of sub-section (1) of section 196, section 240 read with clause (e) of section 2 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Insolvency and Bankruptcy Board of India hereby makes the following regulations to amend the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019, namely: –
1. (1) These regulations may be called the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 2024.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 (hereinafter referred to as ‘the principal regulations’), in regulation 4, in sub-regulation (1), in Explanation, in clause (i),
(i) in sub-clause (a), after the word and mark “guarantor;”, the word “and” shall be inserted.
(ii) in sub-clause (b), for the mark and word “; and”, the mark “.” shall be substituted.
(iii) sub-clause (c) shall be omitted.
3. In the principal regulations, after regulation 17, the following shall be inserted namely: –
“17A. Meeting of the creditors.
The resolution professional shall place the repayment plan as mentioned under section 105 in a meeting of the creditors for its consideration.
Provided that where no repayment plan has been received within such period as stipulated under section 106, the resolution professional shall notify the same in a meeting of creditors.”
RAVI MITAL, Chairperson
[ADVT.-III/4/Exty./725/2023-24]
Note: The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 were published vide Notification No. IBBI/2019-20/GN/REG050, dated 20th November, 2019 in the Gazette of India, Extraordinary, Part III, Section 4, No. 413 on 20th November, 2019
