Filing of Forms IP 1 & CIRP 1 to CIRP 6 for the purpose of monitoring corporate insolvency resolution processes and performance of insolvency professionals under the Insolvency and Bankruptcy Code, 2016 and the regulations made thereunder.

Insolvency and Bankruptcy Board of India
7th Floor, Mayur Bhawan, Connaught Place, New Delhi-110001

CIRCULAR

No. IBBI/CIRP/023/2019

14th August, 2019

To
All Registered Insolvency Professionals
All Recognised Insolvency Professional Entities, and
All Registered Insolvency Professional Agencies
(By mail to registered email addresses and on website of the IBBI).

Dear Madam / Sir,

Subject: Filing of Forms for the purpose of monitoring corporate insolvency resolution processes and performance of insolvency professionals under the Insolvency and Bankruptcy Code, 2016 and the regulations made thereunder.

The objective of the Insolvency and Bankruptcy Code, 2016 (Code) is time bound reorganisation and insolvency resolution of firms for maximisation of value of assets of the firm in distress to promote entrepreneurship and availability of credit and balance the interests of all its stakeholders. The first order objective of the Code is resolution. The second order objective is maximisation of value of assets of the firm and the third order objective is promoting entrepreneurship, availability of credit and balancing the interests of stakeholders. This order of objectives is sacrosanct (Judgement dated 14th November, 2018 of the NCLAT in the matter of Binani Industries Limited Vs. Bank of Baroda & Anr.). The Code bifurcates and separates the interests of the firm from that of its promoters / management with primary focus to ensure revival and continuation of the firm by protecting it from its own management and from a death by liquidation (Judgement dated 25th January, 2019 of the Supreme Court of India in the matter of Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union of India & Ors.).

2. The Code is a paradigm shift in the law. Entrenched managements are no longer allowed to continue in management if they cannot pay their debts (Judgement dated 31stAugust, 2017 of the Supreme Court in the matter of M/s. Innoventive Industries Ltd. Vs. ICICI Bank & Anr.). The Code prevails over every other law in case of any inconsistency between the two (Judgement dated 9th August, 2019 of the Supreme Court in the matter of Pioneer Urban Land and Infrastructure Limited and Anr. Vs. Union of India & Ors.). The Code is the mandate of the nation (Order dated 10th April, 2017 of the NCLT in the matter of DF Deutsche Forfait AG and Anr. Vs. Uttam Galva Steel Ltd.).

3. The Code provides a complete mechanism for its implementation. It assigns specific responsibilities to an insolvency professional (IP) for its implementation and realisation of its objectives. An IP plays an important role in resolution, liquidation and bankruptcy processes of companies, LLPs, partnership firms, proprietorship firms and individuals. He exercises the powers of the Board of Directors of the corporate debtor (CD) undergoing corporate insolvency resolution process (CIRP) and complies with applicable laws on its behalf. Section 20 of the Code requires him to make every endeavour to protect and preserve the value of the property of the CD and manage its operations as a going concern. Section 23 requires him to conduct the entire CIRP and manage the operations of the CD. A whole array of statutory and legal duties and powers is vested in him. He is the fulcrum of an insolvency proceeding and the link between the Adjudicating Authority (AA) and the stakeholders.

4. The Code facilitates and empowers the IP to discharge his responsibilities effectively. It obliges every officer of the CD to report to him. It also obliges the promoter of the CD to extend all assistance and cooperation to him. There is an assurance of supply of essential goods and services to, and a moratorium on proceedings against, the CD. The Code empowers the IP to appoint professionals to assist him. He can seek orders from the AA if he comes across any preferential, undervalued, extortionate, or fraudulent transaction. In order to ensure that an IP performs his role, the Code empowers the Insolvency and Bankruptcy Board of India (IBBI) and the Insolvency Professional Agency (IPA) to monitor his performance. It provides for appropriate sanctions for any kind of wrongdoing. Though a client proposes the name of an IP for appointment, he is appointed by the AA. He may be removed from a process by the AA if it is not satisfied with his performance. The appointment and removal by the AA secure and sanctify the position of the IP. He has protection of actions taken in good faith under the Code and the Regulations made thereunder. His conduct can only be inspected / investigated by the IBBI / IPA which has to follow due process for the purpose. There is a bar under the Code on trial of offences against an IP except on a complaint filed by the IBBI / Central Government, before the special court.

5. Keeping in view the responsibilities of the IPs, the Code provides for monitoring of their performances. It casts a duty on the IBBI and the IPA to monitor performance of IPs, and collect, maintain and disseminate information and records relating to insolvency and bankruptcy processes. It requires the IBBI to perform the following functions, among others, –

(a) monitor the performance of IPs and pass any direction as may be required for compliance of the provisions of the Code and the regulations issued thereunder [section 196(1)(g)];

(b) call for any information and records from the IPs [section 196(1)(h)];

(c) collect and maintain records relating to insolvency and bankruptcy cases and disseminate information relating to such cases [section 196(1)(k)];

(d) maintain websites and such other universally accessible repositories of electronic information [section 196(1)(n)];

(e) issue necessary guidelines to the IPs [section 196(1)(p)]; and

(f) conduct periodic study, research and audit of the functioning and performance of the IPs [section 196(1)(r)].

6. The Code casts obligations on IPs to forward/submit the following information and records relating to CIRP to the IBBI:

(a) all records relating to the conduct of the CIRP and the resolution plan [section 31(3)(b)]; and

(b) a copy of the records of every proceeding before the AA [section 208(2)(d)].

7. In order to facilitate submission of records and information by IPs to the IBBI as well as for monitoring of the processes and performance of IPs, a set of Forms were devised in consultation with stakeholders and the IPAs, in pursuance of the mandate and in synchronisation with the provisions in the Code. These Forms were put out in public domain on 27th April, 2018 and the comments received have been considered. These Forms have since been finalised in consultation with the IPAs. An overview of these Forms, as annexed to this Circular, is as per the Table below:

Table

Form
No.
Period Covered and Scope To be Filed by Timeline
(1) (2) (3) (4)
IP 1 Pre-Assignment: This includes consent to accept assignment of an IP as IRP / RP / Liquidator / Bankruptcy Trustee, the details of IP and the Applicant, the details of the person which will undergo the process, terms of consent, terms of engagement, filing of application before AA and withdrawal before admission, etc. IP Within three days of the
relevant date.
CIRP 1 From Commencement of CIRP till Issue of Public Announcement: This includes details of IRP, CD, and the Applicant, admission of application by AA, public announcement, details of suggested Authorised Representatives, non-compliances with the provisions of the Code and other laws applicable to the CD, etc. IRP Within seven days of making Public Announcement under section
13.
CIRP 2 From Public Announcement till replacement of IRP: This includes details of Authorised Representative selected by IRPs for a class of creditors, taking over management of the CD, receipt and verification of claims, constitution of Committee of Creditors (CoC), first meeting of CoC, confirmation / replacement of IRP, applications seeking co-operation of management (if any), expenses incurred on or by IRP, relationship of IRP with the CD, financial creditors and Professionals, support services sought from IPE, non-compliances with the provisions of the Code and other laws applicable to the CD, etc. IRP Within seven days of replacement of IRP.
CIRP 3 From Appointment of RP till issue of Information Memorandum (IM) to Members of CoC: This includes details of RP, details of registered valuers, handing over of records of CD by IRP to RP, taking over management of the CD, applications seeking co-operation of management (if any), details in IM, non-compliances with the
provisions of the Code and other laws applicable to the CD, etc.
RP Within seven days of issue of IM to members of CoC.
CIRP 4 From Issue of IM till issue of Request for Resolution Plans (RFRP): This includes expression of interest, request for resolution plans (RFRP) and modification thereof, evaluation matrix, non-compliances with the provisions of the Code and other laws applicable to the CD, if any, etc. RP Within seven days of the
issue of RFRP.
CIRP 5 From Issue of RFRP till completion of CIRP: This includes updated list of claimants, updated CoC, details of the resolution applicants, details of resolution plans received, details of approval or rejection of resolution plans by CoC, application filed with AA for approval of resolution plan; details of resolution plan approved by the AA, initiation of liquidation, if applicable, expenses incurred on or by RP, appointment of professionals and the terms of appointment, relationship of the RP with the CD, financial creditors, and professionals, support services sought from IPE, non-compliances with the provisions of the Code and other laws applicable to the CD, if any, etc. RP Within seven days of the approval or
rejection of the resolution plan or issue of order for liquidation, as the case may be, by the AA.
CIRP 6 Event Specific: This includes:

a. Filing of application in respect of preferential transaction, undervalued transaction, fraudulent transaction, and extortionate transaction;

b. Raising interim finance;

c. Insolvency resolution process of guarantors;

d. Extension of period of CIRP and exclusion of time;

e. Premature closure of CIRP (appeal, settlement, withdrawal, etc.);

f. Request for liquidation before completion of CIRP; and

g. Non implementation of resolution plan as approved by the AA.

IRP or RP, as the case may be. Within seven days of the occurrence of event.

8. The IBBI has developed, in consultation with the IPAs, an electronic platform for filing of the Forms above said. The said platform is hosted on the website of the IBBI at https://www.ibbi.gov.in.It is open for filings from 16th September, 2019. An IP shall access the said platform with the help of a unique username and password provided to him by the IBBI and upload / submit the Forms, along with relevant information and records, after affixing DSC or after e-signing.

9. It is directed that an IP shall file electronically –

a. the Forms along with relevant information and records, which have become due on or before 15th September, 2019 in respect of all CIRPs, both closed and ongoing, conducted by him, by 30th September, 2019; and

b. the Forms along with relevant information and records, which will become due on or after 16th September, 2019 in respect of CIRPs conducted by him, by the timelines as specified in the Table under Para 7 above.

10. It is clarified that –

(a) an IP shall be liable to action permissible under this Circular read with the applicable provisions of the Code and the Regulations made thereunder for:

(i) failure to file a Form along with relevant information and records,

(ii) inaccurate and incomplete information and/or records filed in or along with a Form, and

(iii) delay in filing;

(b) the action under (a) includes refusal to issue or renew authorisation for assignment; and

(c) timely filing of complete and accurate information along with information and records is the sole responsibility of the IP.

11. It is further directed that an IPA shall-

(a) monitor filings by its members and, based on the same, take action against the member who fails to file a Form along with relevant information and records when it is due;

(b) scrutinise at least 10% of Forms, filed by its members in a month, selected on random basis and, based on the same, take action against the member for any-

(i) inaccurate or incomplete information and records filed along with a Form, and

(ii) non-compliances with the Code and the Regulations made thereunder, as observed from the information and records filed along with a Form; and

(c) submit a quarterly summary report in respect of (a) and (b) to the IBBI within 15 days of the close of quarter.

This is without prejudice to monitoring and scrutiny of filings and actions, as may be taken by the IBBI.

12. This is issued in exercise of the powers under clauses (aa), (g), (h), (k), (n), (p) and (r) of sub-section (1) of section 196 read with sections 31(2)(b) and 208(2)(d) of the Insolvency and Bankruptcy Code, 2016, and in consultation with the Insolvency Professional Agencies.

Yours faithfully,

Sd/-
(Methil Unnikrishnan)
General Manager
Email: m.unnikrishnan@ibbi.gov.in

Encl.: Annexures: Forms IP 1 and CIRP 1 to CIRP 6.

Post-script:

1. The filing of Forms on the platform on test basis will be available from 15th August, 2019 to 15th September, 2019. The regular filing will commence on 16th September, 2019.

2. The IPAs shall conduct workshops for its professional members, as may be required, to facilitate filings by them under this Circular and to migrate the data relating to costs and disclosures already filed by them.

3. Helpline will be available to assist the IPs in filing the Forms till 30th September, 2019. An IP may contact the helpline provided by the IPA, of which he is a member, at the first instance. If any difficulty of the IP is not fully addressed by the IPA, the IP may contact the helpline of the IBBI. The helpline details are as under:

Sl. No. Agency Name of Officer E-mail id Telephone Number
1 IIIP ICAI CS Shivani Jasmatiya iiipi.helpdesk@icai.in 8178995138
2 ICSI IIP Shikha Sukhija reporting@icsiiip.com 011-45341041
3 IPA ICMAI Anchal Jindal ra@ipaicmai.in 011-24666154
4 IBBI Manpreet Kaur manpreet.k92@ibbi.gov.in 011-23462947

Sd/-
(Methil Unnikrishnan)
General Manager

Download Annexures containing Forms IP 1 and CIRP 1 to CIRP 6

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