The Ministry of Corporate Affairs (MCA) has initiated a significant step toward enhancing the regulatory framework under the Insolvency and Bankruptcy Code, 2016 (IBC). With the aim of ensuring robust corporate governance, facilitating business operations, and aligning with evolving legal and technological landscapes, MCA invites stakeholders to provide comments on the review of rules prescribed under the IBC.
Detailed Analysis:
1. Rationale for Review: The MCA’s decision to review the rules under the IBC stems from various considerations, including the imperative of robust corporate governance, the need to enhance ease of doing business, and the evolving economic environment nationally and internationally. Additionally, inputs from judicial pronouncements and technological advancements play pivotal roles in shaping the regulatory landscape.
2. Policy Framework: In response to the announcement made in the Budget Speech (2023-2024), MCA has unveiled a policy for pre-legislative consultation and comprehensive review of existing rules and regulations. This policy underscores the government’s commitment to fostering a conducive regulatory environment through stakeholder engagement and periodic evaluations.
3. Scope of Review: The comprehensive review encompasses various rules prescribed under the IBC, spanning from the application process to resolution and liquidation proceedings. Notable rules under scrutiny include those related to adjudication, annual reporting, insolvency resolution for personal guarantors, and pre-packaged insolvency resolution processes.
4. Participation Process: Stakeholders are encouraged to participate in the review process by providing comments and suggestions through the designated online platform on MCA’s website. The process involves selecting the relevant rules, categorizing comments as general or specific, and articulating insights regarding inconsistencies, implementation challenges, or necessary provisions.
5. Submission Guidelines: Comments should be submitted exclusively through the provided web link within the stipulated timeframe of 30 days from the upload date. It is imperative to adhere to the prescribed format and refrain from sending comments via email or hard copy to ensure streamlined communication and effective processing.
Conclusion:
The invitation for comments on the review of rules prescribed under the IBC marks a significant stride towards fostering regulatory efficacy and responsiveness. By actively engaging stakeholders in the review process, MCA endeavors to address emerging challenges, promote regulatory coherence, and reinforce the foundations of corporate insolvency resolution mechanisms. Stakeholders are urged to seize this opportunity to contribute meaningfully to the evolution of the regulatory framework, thereby facilitating a conducive environment for economic growth and corporate resilience.
This detailed article offers insights into the Ministry of Corporate Affairs’ invitation for comments on the review of rules prescribed under the Insolvency and Bankruptcy Code, 2016. It outlines the rationale behind the review, the policy framework guiding the process, the scope of the review, participation mechanisms, and submission guidelines. Additionally, it emphasizes the significance of stakeholder engagement in shaping a robust regulatory framework conducive to corporate governance and economic vitality.
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Ministry of Corporate Affairs
Notice inviting comments on the review of rules prescribed under the Insolvency and Bankruptcy Code, 2016
Dated:——-
The Ministry of Corporate Affairs (MCA) has prescribed various Rules under the Powers available under the Insolvency and Bankruptcy Code, 2016 (Code) to carry out the provisions of the Code. While prescribing these Rules, the following factors have been considered by the MCA viz:-
a) Necessity of a robust corporate governance framework
b) Ease of doing business and ease of compliance
c) Economic environment in the country as well as internationally
d) Levels of various thresholds in respect of class or classes of companies for the purpose of various governance and compliance requirements
e) Pronouncement of various Courts/NCLT/NCLAT & other quasi-judicial bodies
f) Legal & Technologies developments taking place across the globe
g) Ease of Exit.
2. Pursuant to the announcement made in para 99 & 100 of the Budget Speech (20232024), the Ministry of Corporate Affairs (MCA) has released a policy for pre-legislative consultation and Comprehensive review of existing Rules and Regulations prescribed under various legislations administered by it. The policy has been placed on the website of MCA.
3. In accordance with para-B.1 of such policy. It has been decided to initiate a comprehensive review of all the Rules prescribed under various legislations being administered by MCA. Accordingly, Comments/ Suggestions are invited on the following Rules from all the stakeholders:
a) The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016
b) The IBBI (Form of Annual Statement of Accounts) Rules, 2018
c) The IBBI (Annual Report) Rules, 2018
g) The Insolvency and Bankruptcy (Pre-packaged Insolvency Resolution Process) Rules, 2021
4. For providing comments, please follow the process as under:
a. Visit MCA’s website, mca.gov.in; E-consultation Tab or click on the URL: https://www.mca.gov.in/content/mca/global/en/econsultation.html
b. Select “Public Comments”;
c. From the drop-down menu, select “comments on Rules”;
d. Provide your Name, and Email ID;
e. Select the stakeholder category, namely, –
i. Corporate Debtor;
ii. Creditor to a Corporate Debtor;
iii. Insolvency Professional;
iv. Insolvency Professional Agency;
v. Insolvency Professional Entity;
vi. Personal Guarantor to a Corporate Debtor;
vii. Proprietorship firms;
viii. Partnership firms;
ix. Academics;
x. Investors;
xi. Other
5. Select the rules, you wish to make a comment upon, from the drop down menu, as under:
a) The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016
b) The IBBI (Form of Annual Statement of Accounts) Rules, 2018
c) The IBBI (Annual Report) Rules, 2018
g) The Insolvency and Bankruptcy (Pre-packaged Insolvency Resolution Process) Rules, 2021
6. Please note that the selected rules can be found by clicking the pdf icon right next to the “select rules” option.
7. Select the kind of comments you wish to make, namely,
a. General Comments; or
b. Specific Comments.
8. If you have selected “General Comments”, please select one of the following options:
a) Inconsistency, if any, between the provisions within any rules (intra-rules);
b) Inconsistency, if any, between the provisions in different rules (inter-rules);
c) Inconsistency, if any, between the provisions in any with those in the rules;
d) Inconsistency, if any, between the provisions in any rules with those in the Code;
e) Inconsistency, if any, between the provisions in any rules with those in any other law;
f) Any difficulty in implementation of any of the provisions in any rules;
g) Any provision that should have been provided in any rules, but has not been provided;
h) Any provision that has been provided in any rules, but should not have been provided.
and then write comments in the “Write Comment” box.
9. If you have selected “Specific Comments”, please select rules number and then sub-rules number, and write comments in the “Write Comment” box, under the selected rules / sub-rules number.
10. You can make comments on more than one rules, or more than one rules / sub rules number, by clicking on more comments and repeating the process outlined above from point 6 onward.
11. Click ‘Submit’, after entering the image text in the box provided on the portal, if you have no more comments to make.
12. Comments should be sent only through the web link created for the purpose, and should not be sent separately through e-mail or hard copy. It is requested that comments/suggestions may be submitted on the Rules within 30 days from the date of upload.
Rajan Jain
(Deputy Secretary to Govt. of India)
