IBBI’s 3rd Amendment to CIRP Regulations 2025 Simplifies Compliance

INTRODUCTION

Maximization of the Assets and Commercial Revival of the entity as a going concern are the fundamental facets of IBC, based on which the entire gamut of debt-cum-asset restructuring mechanism of IBC is channelized into motion. Apart from the above, the watertight and time-bound mechanism of IBC also makes it a prudent framework to draw out the business entities from economic distress. Recently, the apex court raised an alarming situation when the strict timelines given under the IBC framework were misappropriated by the Successful Resolution Applicants, leading to prolonged delays in effectuation of the Effective Date, thereby impeding the timely execution of the Resolution Plan [“SRAs”] (State Bank of India v. Consortium of Murari Lal Jalan & Florian Fritsch, Civil Appeal Nos. 5023-5024/2024) (Jet Airways Liquidation”); and the flagrant violation of the mandatory provisions of the IBC like the mandatory verification of the eligibility criteria of the SRAs (Section 29A, IBC), time-bound submission of the Resolution Plan to the Adjudicatory Authority [“AA”] (Section 30 IBC), adherence to the quasi-judicial and residuary jurisdiction of NCLT & NCLAT (Sections 60 & 61 IBC) were diluted, thereby nullifying the intent of IBC (Kalyani Transco v. M/s Bhushan Power & Steel Ltd., Civil Appeal Nos. 1808/2020) (JSW Steel Resolution).

Nonetheless, in order to rectify the flagrant violations of the IBC framework as addressed by the apex court in the Jet Airways Liquidation and the JSW Steel Resolution case, Insolvency and Bankruptcy Board of India [“IBBI”], in one of its recent developments, has introduced the IBBI (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2025 [“3^rd Amendment Regulation 2025”] to bring enhanced transparency and ensure time bound submission of relevant documents to the IBBI and the AA, thereby providing an equitable position to the Corporate Creditors, SRAs and the other stakeholders. The author in this piece shall throw light upon the key amendments introduced vide the instant 3^rd Amendment Regulation, and the salient features of the amendments brought forth by the aforesaid Regulation.

KEY AMENDMENTS

The 3^rd Amendment Regulation 2025 has taken efforts in incorporating certain provisions in Regulation 40B (mandates IRP & RP concerned to file requisite forms on the IBBI electronic portal at different phases of CIRP), which are as follows:

• FORM CP-1

This form covers the compliances to be made by IRP from the commencement of CIRP till the constitution of the Committee of Creditors [“CoC”], and to be filed by every 10^th of the subsequent month after filing the report on the constitution of CoC to AA.

This brings within its sweep a wide range of compliances to be adhered to in a single form and makes it hassle-free for the IRP to make the following compliances in a single prescribed form –

1. Details of IRP, CD & the Applicant
2. Admission of application by AA
3. Public Announcement
4. Details of Authorised Representative
5. Description on taking over management of CD
6. Receipt & Verification of Claims
7. Constitution of CoC, etc.

This marks a wide departure from the erstwhile regulation wherein four sets of forms (IP-1, CIRP 1, CIRP 2, CIRP 3) had to be prepared and reported to the IBBI by both the IRP & RP, making it time-consuming and cumbersome for the insolvency professionals to comply with these particulars.

• FORM CP-2

The instant form covers the set of compliances to be made by the RP from the constitution of CoC till the issue of Request for Resolution Plan [“RFRP”] by the 10^th of every subsequent month after the issuance of RFRP.

The list of compliances under Form CP-2 are as follows –

1. Details of RP
2. Details of Registered Valuers
3. Details of Information Memorandum
4. Expression of Interest
5. RFRP & Modification, etc.

While Form CIRP 4 of the erstwhile Regulation 40B had partially encapsulated the compliances as made in the instant Form CP-2, the instant incorporated Form segregates certain compliances and dedicates the enlisting of compliances solely to the stage of evaluation of Claims and Resolution Plans submitted by the Prospective Resolution Applicants, thereby making the compliances hassle free and readily accessible and ensuring the best standards from the RP to prepare an evaluation matrix, and making it inclusive of the contingent claims.

Such exercise will thereby preclude the chances of future litigations post the CIRP proceedings (the unincorporation of contingent claims in the Information Memorandum became a bone of contention post the approval of the Resolution Plan in State of Haryana v. Uttam Strips Ltd., 2020 SCC OnLine NCLAT 1057).

• FORM CP-3A

This form covers the stage of scrutiny of the Resolution Plan, which needs to be filed by the RP and by the 10^th of the subsequent month after filing an application with the AA.

The list of compliances to be made are as follows –

1. Details of the Prospective Resolution Applicants
2. Details of approval/rejection of the Resolution Plans by CoC
3. Details of the application filed with AA for approval/rejection
4. Details of initiation of liquidation (if applicable), etc.

The instant form may have positive attributes in assisting the AAs to make an effective adjudication and evaluation of the Resolution Plan, making him take a calibrated decision on giving a nod to the Resolution Plan or acceding to Liquidation, well before Section 31 application is made.

• FORM CP-3B

The instant form encapsulates the details on the orders of AA regarding the approval/rejection of the Resolution and/or Liquidation order, along with a final closure order of the AA, and is to be filed by the RP within the stipulated timeline of 7 days of the disposal of the application by AA.

• FORM CP-4

This form encapsulates the particulars to be filed by the RP concerning the Avoidance Applications, which need to be filed by the 10^th of the subsequent month, after filing of application(s) with AA and/or disposal of the application.

The list of particular compliances is as follows –

1. Details of the avoidance transactions
2. Underlying amounts
3. Date of reporting to AA
4. Order of AA on the application, etc.

The instant form brings into motion the detailed scrutiny of the Avoidance Applications, colloquially with respect to the Preferential, Undervalued, Fraudulent, and Extortionate [“PUFE”] Transactions which helps in correcting the course of the RP in filing an appropriate avoidance application before the AA and its effective adjudication thereof. Thus, the instant form provides a detailed mechanism on the opting and channelization of the adequate Avoidance Applications as per the factual scenario, and to preclude instances of ambiguities among the various PUFE Transactions and filing an inappropriate avoidance application thereof (the inappropriate avoidance application and an erroneous adjudication by the NCLAT was highlighted by the apex court in (Dewan Housing Finance Corporation Ltd. v. 63 Moons Technologies Ltd., Civil Appeal Nos. 1632-1634/2022)

• FORM CP-5

The instant form aims at ensuring a monthly track report of the incidental proceedings to the concerned CIRP, which needs to be filed by the IRP or the RP concerned by the 10^th of every month for the preceding month.

The list of particulars forming part of the monthly report is as follows –

1.Status of CIRP

2. Details of CoC meetings

3. Status of litigations concerning the CIRP concerned

4. Details of expenses incurred

5. Reasons for delay (if any), etc.

In contrast to the previous position of Regulation 40B, where the IRP or the RP had to submit event-specific reports to the IBBI, which made compliance repetitive and cumbersome, the new form simplifies this compliance process, allowing the IRP/RPs to submit the necessary details efficiently and without hassle. This change helps prevent delays in litigation, aligns the Commercial Wisdom of the CoCs with the CIRP, allows for timely assessment of the CIRP proceedings, and more.

CONCLUSION

The IBBI 3^rd Amendment Regulations, 2025 represent a paradigmatic shift towards enhanced regulatory compliance within the CIRP framework. By consolidating erstwhile fragmented reporting mechanisms through Forms CP-1 through CP-5, the amendment addresses judicial concerns raised in Jet Airways Liquidation and JSW Steel Resolution, wherein procedural lapses undermined the IBC’s fundamental objectives.

Although the IBBI’s 3rd Amendment Regulations 2025 introduced a minor change by altering certain provisions in Regulation 40B regarding the scope and timeline of compliance, the amendment’s emphasis on enhanced disclosure norms and systematic compliance protocols reinforces the IBC’s core principles of asset maximization and commercial revival, while ensuring equitable treatment of all stakeholders in the insolvency ecosystem. The possible refinement of the previous Regulation 40B significantly strengthens the IBC’s corporate debt resolution mechanism and, therefore, engages major stakeholders like the RP/RP, Corporate Creditors, and the SRAs to ensure accountability and work in tandem with the CoC and the NCLT & NCLAT to achieve timely and well-informed adjudication of disputes arising from CIRP matters.