IBC: CIRP, Liquidation and Acquisition Procedures

PRACTICAL ASPECTS ON IBC – A practical guide for stakeholder

Brief overview of IBC:

The Insolvency and Bankruptcy Code (IBC) is a law made by the Indian government in 2016 to help companies, individuals, or businesses that are unable to repay their debts.

Before this law, solving such problems used to take many years and involved multiple laws and courts. IBC changed that by creating one fast, structured process for dealing with financial trouble.

Think of IBC as a hospital for sick companies – if treatment works, the company survives; if not, it is respectfully shut down and its parts (assets) are used to pay back debts.

CIRP VS. LQIUDIATION: Key Differences

How to work on the IBBI portal?

Working on the IBBI portal (Insolvency and Bankruptcy Board of India) depends on your role—whether you’re an Insolvency Professional (IP), a Registered Valuer, Information Utility, Agency, or just accessing public data.

Here’s a simple step-by-step guide for using the IBBI portal for professionals:

IBBI Portal Links

• Official Website: https://ibbi.gov.in
• IP/Entity Login: https://services.ibbi.gov.in

What You Can Do on the Portal:

• File CIRP/Liquidation forms (Form A, B, G, H, etc.)
• Submit public announcements
• View list of ongoing cases
• Track compliance and report status
• Access regulations, guidelines, circulars

How to acquire a company Via CIRP?

To acquire a company through the CIRP (Corporate Insolvency Resolution Process) under the IBC, 2016, you’re essentially becoming a Resolution Applicant (RA). The IBBI does not sell companies directly—but you can acquire a company that is undergoing CIRP by submitting a resolution plan through the process managed by the Insolvency Professional (IP). Here’s a simple, step-by-step guide:

Step 1: Track CIRP Cases

Visit: https://ibbi.gov.in/en/claims/corporate-personals

Here, you can see the list of companies currently under CIRP, the name of the Insolvency Professional (IP), and the status (whether expression of interest is invited, etc.).

Step 2: Check Public Announcements

All CIRPs must publish a public announcement (Form A) in newspapers and on IBBI/NCLT sites when CIRP starts.

The notice includes:

• Name of Corporate Debtor
• CIRP start date
• IP’s contact details
• Deadline to submit EOI (Expression of Interest)

Note: You should regularly check IBBI and newspaper notices or subscribe to alerts.

Step 3: Submit Expression of Interest (EOI)

Once EOI is invited:

Prepare your EOI as per Form G (published by the IP)

i. Include:

• • Basic company details
  • Financial capacity
  • Proof of eligibility under Section 29A of IBC

ii. Submit EOI within the deadline to the RP

Section 29A bars some people (like willful defaulters, related parties, promoters of defaulting companies, etc.) from bidding.

Step 4: Get Access to Virtual Data Room (VDR)

If your EOI is approved, the RP will give you access to a Virtual Data Room where financial and operational data of the company is shared.

Use this information to prepare a detailed resolution plan.

Step 5: Submit Resolution Plan

You must prepare and submit a Resolution Plan which includes:

• Proposed business strategy
• Financial terms (how creditors will be paid)
• Compliance with Section 30(2) of IBC
• Proof of funds

You may also need to submit an Earnest Money Deposit (EMD).

Step 6: CoC Evaluation

• The Committee of Creditors (CoC) will evaluate your plan based on commercial viability and value maximization.
• If your plan gets 66% voting approval, it goes to NCLT.

Step 7: Approval by NCLT

If NCLT approves, the company is handed over to you as the Successful Resolution Applicant (SRA).

You become the new owner, and the CIRP ends.

Legal Requirements:

• Must be eligible under Section 29A of IBC
• Must follow Regulation 36A, 36B of IBBI (CIRP) Regulations
• Plan must comply with Section 30(2) of the Code

Process of Liquidation under IBC (In Simple Terms)

When the Corporate Insolvency Resolution Process (CIRP) fails — i.e., no resolution plan is received, approved, or if the CoC decides to liquidate the company — the process of Liquidation is initiated under Section 33 of the IBC.

Here’s a step-by-step breakdown:

8. Visit the site

IBBI: https://ibbi.gov.in/en/claims/corporate-personals

NESL: https://nesl.co.in/

E-AUCTION: https://eauction.gov.in/eauction/#/

AUCTION TIGER: https://eauction.auctiontiger.net/EPROC/

RIGHT2VOTE: https://right2vote.in/eauction/

Here you can find company names under liquidation, Liquidator details, Auction Announcements and Type of sale (Business as going concern/Assets wise)

Step 2: Check the Sale Notice

The liquidator will publish a public sale notice (under Regulation 32A of IBBI Liquidation Regulations) mentioning:

• Type of sale (going concern or asset-wise)
• Reserve price
• EMD (Earnest Money Deposit)
• Eligibility conditions (under Section 29A of IBC)
• Last date to submit bid

Step 3: Submit Your Bid

Register on the auction platform (e.g., MSTC, Auction Tiger).

Submit:

• Know Your Customer (KYC) documents
• Declaration of eligibility under Section 29A
• Bid application form
• Earnest Money Deposit (EMD)

Make sure you are not disqualified under Section 29A (i.e., not a willful defaulter, not related party, etc.)

Step 4: Participate in the Auction

• On the scheduled date, log in and bid on the portal.
• If you are the highest bidder (and meet conditions), the liquidator will issue a Letter of Intent (LOI).

Step 5: Pay Final Purchase Price

• You usually get 30–90 days to pay the full bid amount.
• If payment is not made, the EMD may be forfeited.

Step 6: Get Sale Certificate and Take Over

Once payment is complete:

• You receive a sale certificate
• The company’s business/assets are handed over to you
• Depending on the mode of sale, the company may be:
• Revived and run by you (if sold as going concern)
• Acquired for its assets only

Note: The legal entity may continue if sold as a going concern, or get dissolved if only assets are sold.

Conclusion

The Insolvency and Bankruptcy Code (IBC), 2016 has been a game changer in reshaping India’s insolvency ecosystem. It offers a structured, time-bound process for resolving distressed assets—either through revival under CIRP or orderly exit via liquidation.

For stakeholders, understanding the difference between these two routes is essential. CIRP gives businesses a chance at recovery, while liquidation ensures fair distribution when revival isn’t viable.

For investors, financial institutions, and strategic buyers, the IBC presents a transparent and regulated framework to acquire distressed companies or their valuable assets—either by participating in the resolution process or by bidding through liquidation auctions.

In conclusion, whether your goal is resolution, investment, or acquisition, a sound understanding of IBC process can help unlock strategic business opportunities while contributing to a healthier financial ecosystem.