Insolvency and Bankruptcy Board of India amends the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017
The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 2022 (Amendment Regulations) on 05th April, 2022.
The Insolvency and Bankruptcy Code, 2016 read with Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 provide mechanism for voluntary liquidation of solvent corporate person. It has been noticed that there has been substantial delay in completion of voluntary liquidation process, though the process, in general, involve nil or negligible claims of creditors, fewer assets, if any, to be realized and few litigations, if any, to be concluded. To curtail such delay and ensure faster exit for firms, the Amendment Regulations modify timelines for some stipulated activities undertaken during the process as under:
- The liquidator shall prepare the list of stakeholders within fifteen days (against the previously stipulated forty-five days) from the last date for receipt of claims, where no claim from creditors has been received till the last date for receipt of claims.
- The liquidator shall distribute the proceeds from realization within thirty days (against the previously stipulated six months) from the receipt of the amount to the stakeholders.
- It has been further provided that the liquidator shall endeavour to complete the liquidation process of the corporate person within two hundred and seventy days from the liquidation commencement date, where the creditors have approved the resolution under section 59(3)(c) or regulation 3(1)(c), and ninety days from the liquidation commencement date in all other cases (against the previously stipulated 12 months in all situations).
To provide summary of actions taken by the liquidator during the voluntary liquidation process, the Amendment Regulations specify a compliance certificate which is required to be submitted along with application under section 59(7) to the Adjudicating Authority, by the liquidator. It shall facilitate the Adjudicating Authority to adjudicate dissolution applications expeditiously.
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
NOTIFICATION
New Delhi, the 5th April, 2022
Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 2022
F. No. IBBI/2022-23/GN/REG.081.—In exercise of the powers conferred by clause (t) of sub-section (1) of section 196 read with section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Insolvency and Bankruptcy Board of India hereby makes the following regulations further to amend the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017, namely: –
1. (1) These Regulations may be called the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 2022.
(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 (Voluntary Liquidation Process) Regulations, 2017 (hereinafter referred to as ‗the principal regulations‘), in regulation 2, in sub-regulation (1), in clause (c), for the figure and brackets “3(4)”, the figure and brackets “3(3)” shall be substituted.
3. In the principal regulations, in regulation 5, in sub-regulation (2), for the word “three”, the word “seven” shall be substituted.
4. In the principal regulations, in regulation 10, in sub-regulation (2) and clause (r) of sub-regulation (2), for the words “corporate debtor”, the words “corporate person” shall be substituted.
5. In the principal regulations, in regulation 30, after sub-regulation (2), the following proviso shall be inserted, namely: –
“Provided that where no claim from creditors has been received till the last date for receipt of claims, the liquidator shall prepare the list of stakeholders within fifteen days from the last date for receipt of claims.”
6. In the principal regulations, in regulation 35, in sub-regulation (1), for the words “six months”, the words “thirty days” shall be substituted.
7. In the principal regulations, in regulation 37, for sub-regulation (1), the following sub-regulation shall be substituted, namely: –
“(1) The liquidator shall endeavour to complete the liquidation process of the corporate person and submit the Final Report under regulation 38 within: –
(a) two hundred and seventy days from the liquidation commencement date where the creditors have approved the resolution under clause (c) of sub-section (3) of section 59 or clause (c) of sub-regulation (1) of regulation 3, and
(b) ninety days from the liquidation commencement date in all other cases.”
8. In the principal regulations, in regulation 38, for the sub-regulation (3), the following sub-regulation shall be substituted, namely: –
“(3) The liquidator shall submit the Final Report and the compliance certificate in Form-H along with the application under sub-section (7) of section 59 to the Adjudicating Authority.”
9. In the principal regulations, in regulation 39, in sub-regulation (7), for the word and letter “Form-H”, the word and letter “Form-I” shall be substituted.
10. In the principal regulations, in Schedule I, for the word and letter “Form-H”, the word and letter “Form-I” shall be substituted.
11. In the principal regulations, in Schedule I, after Form-G, the following form shall be inserted, namely: –
“FORM-H
COMPLIANCE CERTIFICATE
[Under Regulation 38(3) of the Insolvency and Bankruptcy Board of India (Voluntary Liquidation
Process) Regulations, 2017]
I, [Name of the Liquidator], an insolvency professional enrolled with [name of insolvency professional agency] and registered with the Board with registration number [registration number], am the Liquidator for the Voluntary Liquidation Process of [name of the corporate person].
1. The details of the Voluntary Liquidation Process are as under:
| Sl. No. | Particulars | Description |
| (1) | (2) | (3) |
| 1 | Name of the corporate person | |
| 2 | CIN/LLPIN of the corporate person | |
| 3 | NCLT Bench | |
| 4 | Date of initiation of voluntary liquidation process | |
| 5 | Date of appointment of Liquidator | |
| 6 | Liquidator‘s Registration No. as IP | |
| 7 | Whether the Liquidator was replaced during the process (Yes / No) | |
| If yes | Name of previous Liquidator and his registration No. | |
| Date of replacement of previous Liquidator | ||
| 8 | Date of opening of bank account for liquidation (with account details) | |
| 9 | Date of notice for uncalled capital/unpaid capital contribution | |
| 10 | Date of realization of uncalled capital/unpaid capital contribution | |
| 11 | Date of intimation to statutory authority as applicable.
a. PF b. ESI c. Income Tax d. Inspector of Factory e. GST/VAT f. RBI g. Others |
|
| 12 | Amount deposited into Corporate Voluntary Liquidation Account:
h. Amount of unclaimed dividends b. Amount of undistributed proceeds c. Income referred to in sub-regulation (2) and (3) of regulation 39 d. Interest referred to in sub-regulation (4) of regulation 39 Total |
|
| 13 | Remuneration of Liquidator (Rs.) |
3. Details of the corporate person:
| Sl. No. |
Particulars | Description |
| (1) | (2) | (3) |
| 1 | Year of Incorporation | |
| 2 | Objects in brief | |
| 3 | Paid up Share Capital / Capital (Amount in Rs.) | |
| 4 | Assets as on Liquidation Commencement date (Amount in Rs.) | |
| 5 | Debt payable as on Liquidation Commencement date (Amount in Rs.) | |
| 6 | Net-worth of the Corporate Person (Amount in Rs.) | |
| 7 | Reasons for initiating voluntary liquidation, in brief |
4. Details of realisation during Voluntary Liquidation Process:
| Sl. No. | Particulars | Amount (Rs.) |
| (1) | (2) | (3) |
| 1 | Sale of Assets | |
| 2 | Refund from Statutory Authorities | |
| 3 | Cash / Bank balance | |
| 4 | Realisation of uncalled/unpaid capital contribution | |
| 5 | Distribution of unsold asset | |
| 6 | Any other (Please specify) | |
| Total | ||
5. Details of distribution to stakeholders as per section 52 or 53 of the Code
(Amount in Rs. lakh)
| Sl. No. | Stakeholders* under section 52 and 53 (1) | Amount Claimed | Amount Admitted | Amount Distribu-ted | Amount Distribut-ed to the Amount Claimed (%) |
Remarks |
| (1) | (2) | (3) | (4) | (5) | (6) | (7) |
| 1 | Realization of Security Interest [Sec. 52(1)(b)] | |||||
| 2 | Liquidation Cost [Sec. 53(1)(a)] | |||||
| 3 | Workmen‘s Dues [Sec. 53(1)(b)(i)] |
|||||
| 4 | Debts of Secured Creditors [Sec. 53(1)(b)(ii)] | |||||
| 5 | Wages and Unpaid Dues to Employees [Sec. 53(1)(c)] | |||||
| 6 | Debts of Unsecured Financial Creditors [Sec. 53(1)(d)] | |||||
| 7 | Government Dues + Amount Unpaid following Enforcement of Security Interest [Sec.53(1)(e)] | |||||
| 8 | Any remaining Debts and Dues [Sec. 53(1)(f)] |
|||||
| 9 | Preference Shareholders [Sec. 53(1)(g)] | |||||
| 10 | Equity Shareholders [Sec.53(1)(h)] |
|||||
| Total | ||||||
*If there are sub-categories in a category, please add rows for each sub-category.
6. The Voluntary Liquidation Process has been conducted as per the stipulated timeline:
| Sl. No. |
Section / Regulation |
Description of Task | Norm (Number of Days) |
Compliance Date |
Actual Timeline (Number of days) |
| (1) | (2) | (3) | (4) | (5) | (6) |
| 1 | Section 59(3)(a), Regulation 3(1) (a) | Declaration from majority of directors / partners regarding solvency of corporate person and it not being liquidated to defraud any person | T – 28 | ||
| 2 | Section 59[(3)(c) and (5)], Regulation 3(1)(c) and 3(3) | Passing of resolution / special resolution by members / partners about commencement of voluntary liquidation process and appointment of insolvency professional as liquidator |
T = 0 | ||
| 3 | Proviso to Section 59(3)(c), Regulation 3(1)(c) | Approval of creditors representing two-third in value of debt, if the corporate person owes any debt, of the resolution passed under section 59(3)(c) or regulation 3(1)(c) | T + 7 | ||
| 4 | Regulation 5(2) | Intimation by Insolvency Professional regarding his appointment as Liquidator, to the Board |
T + 7 | ||
| 5 | Regulation 14 (1) | Public Announcement in Form A by the Liquidator | T + 5 | ||
| 6 | Section 59(4), Reg. 3(2) |
Notification to Registrar of Companies and Board about the resolution passed under section 59(3)(c) and regulation 3(1)(c) or subsequent approval of creditors thereto, as the case may be, by corporate person | T + 7 or T + 14 | ||
| 7 | Section 38(1), Regulation 14 (2) | Submission of claims by stakeholders | T + 30 | ||
| 8 | Section 38(5) | Withdrawal/ modification of claim by stakeholders | T + 44 | ||
| 9 | Regulation 9(1) | Submission of preliminary report to the corporate person by the Liquidator | T + 45 | ||
| 10 | Regulation 29(1) | Verification of claims by the Liquidator | T + 60 | ||
| 11 | Section 40 (2) | Intimation about decision of acceptance/ rejection of claim to the stakeholders by the Liquidator | T + 67 | ||
| 12 | Regulation 30(2) | Preparation of list of stakeholders by the Liquidator | T + 45*/75 | ||
| 13 | Section 42 | Appeal by creditor against the decision of the Liquidator | T + 81 | ||
| 14 | Regulation 35(1) | Distribution of the proceeds to stakeholders by the Liquidator | Date of
realization + 30 |
||
| 15 | Regulation 39(2) | Deposit of amount of unclaimed dividends and undistributed proceeds in Corporate Voluntary Liquidation Account by the Liquidator |
Prior to submission of application under sub-section (7) of section 59 | ||
| 16 | Regulation 38(2) | Submission of Final Report to the Board and Registrar of Companies by the Liquidator | T + 90*/270 | ||
| 17 | Section 59(7), Regulation 38(3) | Submission of Final Report, along with the application for dissolution, to AA | T + 90*/270 | ||
| 18 | Regulation 37(1) | Completion of Voluntary Liquidation Process | T + 90*/270 | ||
| 19 | Regulation 37(2) | Meeting of Contributories and presentation of Annual Status Report | T + 365 |
T=Liquidation Commencement Date
*Applicable where approval of creditors was not required under section 59(3)(c) or regulation 3(1)(c)
7. The following are deviations / non-compliances with the provisions of the Insolvency and Bankruptcy Code, 2016, regulations made, or circulars issued thereunder (If any deviation/ non- compliances were observed, please state the details and reasons for the same):
| Sl. No. | Deviation / Non- compliance observed |
Section of the Code / Regulation No. / Circular No. | Reasons | Whether rectified or not |
| (1) | (2) | (3) | (4) | (5) |
| 1 | ||||
| 2 | ||||
| 3 |
8. The details of application(s) filed / pending in respect of avoidance of transactions.
| Sl. No. |
Type of Transaction | Date of Filing with Adjudicating Authority |
Date of Order of the Adjudicating Authority |
Brief of the Order |
| (1) | (2) | (3) | (4) | (5) |
| 1 | Preferential transactions under section 43 | |||
| 2 | Undervalued transactions under section 45 | |||
| 3 | Extortionate credit transactions under section 50 | |||
| 4 | Fraudulent transactions under section 66 |
9. If the process has taken more than 90 / 270 days, as the case may be, for completion, please state reasons thereof.
10. All undischarged matters pending, if any, before any Court or Tribunal relating to corporate person have been reported to AA, along with the details of provision made to sufficiently meet the obligations arising from such pending litigations.
11. The records referred to in regulations 8 and 10 shall be preserved as mandated under regulation 41.
12. Any other information which the Liquidator may like to submit.
13. I [Name of Liquidator], hereby certify that the contents of this certificate are true and correct to the best of my knowledge and belief, and nothing material has been concealed there from.
(Signature)
Name of the Liquidator:
IP Registration No:
Address as registered with the Board:
Email id as registered with the Board:
Date: ………………….
Place: ………………. ”
RAVI MITAL, Chairperson
[ADVT.-III/4/Exty./03/2022-23]
Note : The Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 were published vide notification No. IBBI/2016-17/GN/REG010 on 31st March, 2017 in the Gazette of India, Extraordinary, Part III, Section 4, No. 130 dated 31st March, 2017 and were last amended by the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Second Amendment) Regulations, 2020 published vide notification No. IBBI/2020-21/GN/REG.063 dated 05th August 2020 in the Gazette of India, Extraordinary, Part III, Section 4, No. 311 on 05th August, 2020.
