Process of Filing Application under Insolvency & Bankruptcy Code, 2016

Process of filing Application under IBC, 2016

In November 2016, the highly anticipated Insolvency and Bankruptcy Code, 2016 (“IBC”) was enacted by the Indian Parliament with the intention of bringing uniformity to India’s scattered bankruptcy laws. The IBC is an all-encompassing law that deals with the bankruptcy of not only corporations, but partnerships and individuals as well. Adjudicatory power for Partnership and individuals has been deligated to DRT whereas in case of Companies and Limited liability Partnership (LLP), NCLT has been established as the Adjudicatory Authority.

History and Rationale for the IBC

Prior to the IBC being passed, India did not have a single law dealing with all aspects of a company in financial distress. Instead, there were multiple laws, each of which applied to a particular legal process, type of company or group of creditors. For example, the Sick Industrial Companies Act, 1985 (“SICA“) dealt with the rescue and rehabilitation of industrial companies only, while the Companies Act, 1956 provided a process for the liquidation and winding up of all types of corporate entities. There were also debt recovery laws such as the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI“) and the Recovery of Debt Due to Banks and Financial Institutions Act, 1993 (“RDDBFI Act“) that provided avenues for security enforcement and debt recovery, respectively, by banks and financial institutions.

The result of this fragmented legal framework was delays, confusion and conflicts between these multiples laws and legal fora. Further, many of these laws, such as SICA, had proved to be wholly ineffective in achieving a speedy restructuring that took into account the interests of both debtors and creditors. The World Bank’s Ease of Doing Business Index 2015 ranked India 137 out of 189 countries on the ease of resolving insolvencies based on various indicators such as time, costs, recovery rate for creditors, the management of a debtor’s assets during the insolvency proceedings, creditor participation and the strength of the insolvency law framework. To overcome the problem of overlaping judicial forums and provisions of law, Ministry of Finance constituted the Bankruptcy Law Reform Committee (“BLRC“) under the chairmanship of Mr T.K. Viswanathan which recommended to consolidate the existing framework by creating single law for Insolvency and Bankruptcy.

Who Can File Application under IBC

• Financial Creditor
• Operational Creditor
• Corporate Debtor

1. Financial Creditors:

According to Section5(7) of the Insolvency and Bankruptcy Code, 2016, financial creditor has been defined as follows, ‘A financial creditor is any person to whom a financial debt is owed to. In such an event, the relationship between the financial creditor and the debtor is a pure financial contract, such as a loan. A financial debt is a debt along with interest, if any, which is disbursed against the consideration for the time value of money (time value of money refers to the concept that money acquired sooner or held onto longer has a greater worth or potential worth due to the possible accumulation of interest or return on investment). The following is an indicative list of what may be considered as a financial debt.

• Money borrowed against repayment of interest.
• Money raised against any accepted credit facility.
• Money raised through instruments like bonds, notes, debentures or similar instruments.
• Any amount raised through transactions like forward sale or purchase agreements.

Financial creditors may either be secured creditors or unsecured creditors. The main difference between secured and unsecured financial creditors is that in the event of liquidation and asset distribution proceedings, secured creditors are given a higher priority than unsecured creditors. Further, during the liquidation process, secured financial creditors are given the same priority of repayment as workmen and employee dues and are given a higher priority that other operational creditors, who are treated as unsecured creditors for the purposes of liquidation.

When compared to operational creditors, the procedure for financial creditors to initiate insolvency proceedings is a lot easier. The IBC allows financial creditors to make an application to the NCLT directly and such financial creditors will only need to show that there is a default. It is also important to note that only financial creditors constitute the committee of creditors, and no operational creditor can be part of this committee.

It is pertinent to mention that the recently passed Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 has also included home buyers within the definition of financial creditors.

2. Operational Creditors

The term operational creditor has been defined under Section 5(20) of the IBCas any person to whom operational debt is owed or to whom such debt has been assigned. Operational debt has been defined in the IBC as a claim in respect of the provision of goods or services, including employment or dues payable to any governmental authority. An operational creditor, while filing an application for corporate insolvency resolution before the NCLT against an operational debtor, in addition to the requirements of proving default, will also have to prove that there is no dispute which exists between the operational creditor and the debtor with respect to the amounts due.

Lease of immovable property cannot be considered as a supply of goods or rendering of any services and thus, cannot fall within the definition of Operational Debt-Mr. M. Ravindranath Reddy Vs. Mr G. Kishan & Ors.-NCLAT

Thus the difference between a financial creditor and an operational creditor is that a financial creditor is an individual whose relationship with the entity is solely based on financial contracts, such as a loan or debt security. Whereas, an operational creditor is an individual whose liabilities from the entity comes in the form of future payments in exchange for goods or services already delivered.

Application by Financial Creditor

On occurrence of default in repayment of financial debt of a company or LLP, the financial creditor either by itself or jointly with other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the Central Government can file an application for initiating corporate insolvency resolution process(CIRP) against the company or LLP (In IBC say, corporate debtor) before the Adjudicating Authority(NCLT).

who can file an application under section 7?

1. A financial creditor either by itself or jointly with other financial creditors.

2. Govt. notified person: Any other person on behalf of the financial creditor, as may be notified by the Central Government. Following persons has been notified who may file an application for initiating CIRP on behalf of the financial creditor: –

(i) a guardian;

(ii) an executor or administrator of an estate of a financial creditor;

(iii) a trustee (including a debenture trustee); and

(iv) a person duly authorised by the Board of Directors of a Company.

3. Depositors: Where a financial debt is in the form of securities or deposits, an application for initiation CIRP shall be filed jointly by not less than 100 of such creditors in the same class or not less than 10% of the total number of such creditors in the same class, whichever is less.

4. Class of Creditors: Where a financial debt is owed to a class of creditors exceeding the number as may be specified, refer Sec. 21(6A)(b), an application for initiation CIRP shall be filed jointly by not less than 100 of such creditors in the same class or not less than 10% of the total number of such creditors in the same class, whichever is less.

5. Home Buyer: The application shall be filed jointly by not less than 100 of such allottees under the same real estate project or not less than 10% of the total number of such allottees under the same real estate project, whichever is less.

In case the application is made jointly by financial creditors, they may nominate one amongst them to act on their behalf.

Even without resorting to CIRP against the Principal Borrower it is always open to the Financial Creditor to commence CIRP u/s 7 of the Code against the Guarantor [Bijay Kumar Agarwal vs. State Bank of India and Anr. 149(IBC)114/2020 -NCLAT] but once CIRP initiated, for same set of claim & default application u/s 7 against the Principal Borrower is admitted, the application against the Corporate Guarantor is not maintainable [M/s. SEW Infrastructure Ltd. vs M/s. Mahendra Investment Advisors Pvt. Ltd. 07(IBC)07/2020 -NCLAT]

Persons not entitled to make application

As per Sec. 11 of the Code, a Financial Creditors shall not entitle to make an application to initiate CIRP who has violated any of the terms of resolution plan which was approved 12 months before the date of making of an application.

Minimum amount of default

A financial creditor can file application before NCLT against a corporate debtors where the minimum amount of the default is one lakh rupees.[Sec. 4].

Note: Vide Notification No. S.O. 1205(E) dated 24.03.2020, the default limit has been increased to 1 crore rupees.

Application to be filed before NCLT

The application for initiation of the CIRP can be filed before NCLT bench in the jurisdiction of the Corporate Debtor’s registered office.

Application Form and documents

As per Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, an application for initiating the CIRP against a corporate debtor under section 7 of the Code in Form 1, accompanied with following documents and records:

• Record of the default recorded with the information utility or such other record or evidence of default as may be specified;
• The name of the resolution professional proposed to act as an interim resolution professional; and his consent
• Where the applicant is an assignee or transferee of a financial contract, the application shall be accompanied with a copy of the assignment or transfer agreement and other relevant documentation to demonstrate the assignment or transfer.

The applicant shall dispatch forthwith, a copy of the application filed with the Adjudicating Authority, by registered post or speed post to the registered office of the corporate debtor.

NCLT vide order dated 12.05.2020 directed to file default record from Information Utility alongwith the new petitions being filed under section 7 of Insolvency and Bankruptcy Code, 2016 positively. No new petition shall be entertained without record of default under section 7 of IBC, 2016. Further, the Authorized Representative/Parties in the cased pending (as on 12.05.2020) for admission under aforesaid section of IBC also directed to file default record from Information Utility before next date of hearing.

Acceptance or rejection of the application

The Adjudicating Authority (NCLT) shall, within 14 days of the receipt of the application under Section 7, ascertain the existence of a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor. Where the Adjudicating Authority is satisfied that:

• A default has occurred and
• The application is complete, and
• There is no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application;

OR

• Default has not occurred or
• The application is incomplete or
• Any disciplinary proceeding is pending against the proposed resolution professional,

it may, by order, reject such application.

The Adjudicating Authority shall, before rejecting the application, give a notice to the applicant to rectify the defect in his application within 7 days of receipt of such notice from the Adjudicating Authority.

Hon’ble Supreme Court in re Surendra Trading Company Vs. Juggilal Kamlapat Jute Mills Company Ltd. & Others 57(IBC)03/2017 held that the time limit prescribed in IBC, 2016 for admitting or rejecting a petition or initiation of CIRP under proviso to sub-sec. (5) of Sec. 9, is directory. The same view has been taken by NCLAT under section 7 in the matter of Techno Electric & Engineering Co. Ltd. Vs. McLeod Russel India Ltd. 161(IBC)126/2020.

If the earlier application u/s 7 was dismissed for non-prosecution, it was always open to the Respondent to file fresh application u/s 7-Venus Sugar Ltd. Vs. SASF 02(IBC)02/2020 -NCLAT. If a debt amount is disputed & the amount is more than Rs. 1 Lakh, application u/s 7 is maintainable & exact amount of claim will be considered at the stage of the CIRP- A. Maheshwaran Vs. Stressed Assets Stabilization Fund & Anr. – NCLAT. NCLAT in the matter of Karan Goel Vs.M/s Pashupati Jewellers & Anr – NCLAT held that merely because a suit has been filed by the Appellant & pending, cannot be a ground to reject the application under Sec. 7 of the Code. Pre-existing dispute cannot be a subject matter of Sec. 7, though it may be relevant u/s 9. In the matter of Vineet Khosla Shareholders and (ex) Director Margra Industries Ltd. Vs. Edelweiss Asset Reconstruction Company Limited NCLAT held that the AA at the stage of admission of Application u/s 7 is not required to consider if or not Resolution for a given Company would be possible or not

whether or not it would be possible to keep it a going concern–NCLAT.

Forensic Audit

In the matter of Allahabad Bank Vs. Poonam Resorts Limited [2020] ibclaw.in 100 NCLAT, NCLAT held that IBC Code does not envisage a pre-admission enquiry in regard to proof of default by directing a forensic audit of the accounts of the Financial Creditor, Corporate Debtor or any financial institution and noted following points:

• The dictum of law propounded by the Hon’ble Apex Court in Innoventive Industries Limited v. ICICI Bank and Anrr, is loud and clear. The Adjudicating Authority cannot travel beyond the letter of law and the dictum of the Hon’ble Apex Court.
• The satisfaction in regard to occurrence of default has to be drawn by the Adjudicating Authority either from the records of the information utility or other evidence provided by the ‘Financial Creditor’.
• The Adjudicating Authority cannot direct a forensic audit and engage in a long drawn pre-admission exercise which will have the effect of defeating the object of the ‘I&B Code’.
• If the ‘Financial Creditor’ fails to provide evidence as required, the Adjudicating Authority shall be at liberty to take an appropriate decision.
• If the application is incomplete, it can return the same to the ‘Financial Creditor’ for rectifying the defect. This has to be done within 7 days of the receipt of notice from the Adjudicating Authority
• The AA under the Code is not a Court of Law & it does not decide money claim or Suit, it can only admit or reject the application filed under IBC – Hardeep Singh Sawhney Vs. Sawhney Builders Pvt. Ltd. – NCLAT.
• If application is not dispose off by AA within one year & AA has been allowed for adjournment again and again, appellant can approach NCLAT & NCLAT can direct to AA for pass such order in such time – State Bank of India Vs. Sri Lakshmikantha Spinners Ltd – NCLAT.
• The Corporate Guarantees given by the Guarantor can be invoked only In the event of a default on the part of the Principal Borrower – Export Import Bank of India Vs. CHL Limited – NCLAT.
• Once for same claim the CIRP is initiated against one of the Corporate Guarantor after such initiation, the Financial Creditor cannot trigger CIRP against the other Corporate Guarantor(s), for the same claim amount (debt)-Dr. Vishnu Kumar Agarwal Vs. M/s. Piramal Enterprises Ltd. NCLAT.

Application by Operational Creditor

On occurrence of default in repayment of operational debt of a corporate debtor, the operational creditor can file an application for initiating corporate insolvency resolution process (CIRP) against the corporate debtor before the Adjudicating Authority (NCLT).

There two steps of filling of the application:

1. Issue Demand Notice to Corporate Debtor (Sec. 8)

2. Filing of Application before NCLT (Sec. 9)

Minimum amount of default

A operational creditor can file application before NCLT against a corporate debtors where the minimum amount of the default is one lakh rupees.[Sec. 4]

Note: Vide Notification No. S.O. 1205(E) dated 24.03.2020, the default limit has been increased to 1 crore rupees.

Demand Notice[sec. 8]

An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor.

A demand notice means a notice served by an operational creditor to the corporate debtor demanding payment of the operational debt in respect of which the default has occurred. NCLAT held that demand notice issued u/s 8 of the Code, against the corporate debtor, for the dues of sister concern/group company, cannot be treated as a valid notice-Anil Syal Vs. Sanjeev Kapoor (Proprietor Kapoor Logistics) & Anr.

(a) a demand notice in Form 3; or

(b) a copy of an invoice attached with a notice in Form 4.

The demand notice or the copy of the invoice demanding payment may be delivered to the corporate debtor:

(a) at the registered office by hand, registered post or speed post with acknowledgement due; or

(b) by electronic mail service to a whole time director or designated partner or key managerial personnel, if any, of the corporate debtor.

A copy of demand notice or invoice demanding payment served under this rule by an operational creditor shall also be filed with an information utility, if any.

NCLAT in the matter of M/s Flipkart India Private Limited 132(IBC)98/2020 held that the choice of issuance of demand notice u/s 8(1) of the Code, either in Form 3 or Form 4, under the Application to Adjudicating Authority Rules 2016, depends on the nature of Operational Debt. Section 8(1) does not provide the Operational Creditor, with the discretion to send the demand notice either Form 3 or Form 4, as per its convenience. The applicability of Form 3 or Form 4 depends on whether the invoices were generated during the course of transaction or not. It is also made clear that the copy of the invoice is not mandatory if the demand notice is issued in Form 3 of the Application to Adjudicating Authority Rules 2016 provided the documents to prove the existence of operational debt and the amount in default is attached with the application. NCLAT in the matter of M/s Krystal Integrated Services Pvt. Ltd. Vs. M/s Indiaontime Express Private Limited held that in absence of service of demand notice upon the Corporate Debtor whose existence at the given address itself is doubtful, Operational Creditor is not entitled to seek triggering of CIRP.

Action by Corporate Debtor

The corporate debtor shall, within a period of 10 days of the receipt of the demand notice or copy of the invoice bring to the notice of the operational creditor:

(a) existence of a dispute, if any, or record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute;

(b) the payment of unpaid operational debt—

(i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or

(ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor.

Existence of the dispute and/or the suit or arbitration proceeding must be pre-existing (it must exist before the receipt of the demand notice or invoice) u/s 8– Ahluwalia Contracts (India) Limited Vs. Raheja Developers Limited – NCLAT

Filing of application for initiation of CIRP [Sec. 9]

After the expiry of the period of 10 days from the date of delivery of the notice or invoice demanding payment, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute, the operational creditor may file an application before the Adjudicating Authority (NCLT) for initiating a CIRP.

Hon’ble Supreme Court in the matter of Sunrise 14 A/S Denmark Vs. Ravi Mahajan 61(IBC)01/2018 held that petition filed by an advocate would be maintainable.

NCLAT in the matter of Palogix Infrastructure Private Limited Vs. ICICI Bank Limited held that a Power of Attorney holder cannot file any application u/s 7 or Sec. 9 or Sec. 10 of Code.

Application Form and Documents

An operational creditor shall make an application in Form 5, along with the application furnish—

(a) a copy of the invoice demanding payment or demand notice delivered by the operational creditor to the corporate debtor;

(b) an affidavit to the effect that there is no notice given by the corporate debtor relating to a dispute of the unpaid operational debt;

(c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available;

(d) a copy of any record with information utility confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available; and

(e) any other proof confirming that there is no payment of any unpaid operational debt by the corporate debtor or such other information, as may be prescribed.

The applicant shall dispatch forthwith, a copy of the application filed with the Adjudicating Authority, by registered post or speed post to the registered office of the corporate debtor.

An operational creditor initiating a corporate insolvency resolution process under this section, may propose a resolution professional to act as an interim resolution professional.

Admission or Rejection of the Application

The Adjudicating Authority shall, within 14 days of the receipt of the application, by an order:

(i) admit the application and communicate such decision to the operational creditor and the corporate debtor if:

(a) the application is complete;

(b) there is no payment of the unpaid operational debt;

(c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor;

(d) no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and

(e) there is no disciplinary proceeding pending against any proposed resolution professional, if any.

(ii) reject the application and communicate such decision to the operational creditor and the corporate debtor, if:

(a) the application is incomplete;

(b) there has been payment of the unpaid operational debt;

(c) the creditor has not delivered the invoice or notice for payment to the corporate debtor;

(d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility; or

(e) any disciplinary proceeding is pending against any proposed resolution professional:

The Adjudicating Authority, shall before rejecting an application give a notice to the applicant to rectify the defect in his application within 7 days of the date of receipt of such notice from the adjudicating Authority.

Hon’ble Supreme Court in re Surendra Trading Company Vs. Juggilal Kamlapat Jute Mills Company Ltd. & Others 57(IBC)03/2017 held that the time limit prescribed in IBC, 2016 for admitting or rejecting a petition or initiation of CIRP under proviso to sub-sec. (5) of Sec. 9, is directory.

Application by Corporate Debtor:

Under Section 10 Corporate Debtor can file Application for initiation of CIRP against itself if it has committed default of Rs. 1 Lacs/ The special resolution passed by shareholders of the Corporate Debtor or the resolution passed by at peast three-fourth of the tottal number of partner of the corporate debtor is required for filing application under Section 10. (Prior Approval of share holders has been substituted with resolution, Umesh Aggarwal vs RICOH India Ltd)

Who can not make Application

As per Sec. 11 of the Code, a Corporate Debtor shall not entitle to make an application to initiate CIRP where the Corporate Debtor:

• Undergoing a CIRP
• having completed CIRP 12 months preceding the date of making of the application
• who has violated any of the terms of resolution plan which was approved 12 months before the date of making of an application
• in respect of whom a liquidation order has been made.

A corporate debtor referred in above points shall not be prevented from initiating CIRP against another corporate debtor.

Form and documents require for filing the application

The corporate applicant shall, along with the application in Form 6, furnish:

(a) the information relating to its books of account and such other documents for such period as may be specified;

(b) the information relating to the resolution professional proposed to be appointed as an interim resolution professional; and

(c) the special resolution passed by shareholders of the corporate debtor or the resolution passed by at least 3/4 of the total number of partners of the corporate debtor, as the case may be, approving filing of the application.

Initiation & Commencement of CIRP

Initiation date of CIRP means the date on which a financial creditor, corporate applicant or operational creditor, as the case may be, makes an application to the Adjudicating Authority for initiating CIRP[Sec. 5(11)] and the CIRP shall commence from the date of admission of the application.

Step-1 Appointment of Interim Resolution Professional

In case of financial creditor/ corporate debtor: It is mandatory on the part of the financial creditor that along with the application furnishes the name of the resolution professional proposed to act as an interim professional.

In case of operational creditor: Operational Creditor may or may not furnish the name of the resolution professional proposed to act as an interim professional.

However, Adjudicating Authority shall appoint an interim resolution professional within fourteen days from the insolvency commencement date i.e. name proposed by the financial creditor/ corporate debtor and operational creditor if no disciplinary proceedings are pending against the IRPs. In case of no name of IRPs proposed by the operational creditors, the adjudicating authority shall make a reference to the Board for the recommendation of an insolvency professional who may act as an interim resolution professional. Consequently, the Board shall, within 10 days of the receipt of such reference from the Adjudicating authority recommend the name of the insolvency professional which shall be appointed as the adjudicating authority.

The term of IRP shall not exceed thirty (30) days from date of his appointment. The same or replaced IRP (by committee of creditors) shall be appointed as resolution professional (RP).

Step:2 Public Announcement

Public announcement of the CIRP shall be immediately made as will be directed by the Adjudicating authority after admission of the Application.

Step:3 Submission of Claims

The financial creditors shall submit their proof of claims by electronic means only. All other creditors may submit the proof of claims in person, by post or by electronic means.

Step:4 Formation of committee of creditors

The committee of creditors (COC) shall be constituted by the IRPs and the first meeting of the COC shall take place within a period of seven days of its constitution.

Step: 5 Appointment of Resolution Professional

The committee of creditors may, in the first meeting either resolve to appoint the interim resolution professional as a resolution professional or to replace the interim resolution professional by another resolution professional.

Step:6 Preparation of Information Memorandum

Resolution Professional shall prepare information Memorandum as per the code providing complete details about the Corporate Debtor.

Step :7 Preparation of Resolution Plan

Resolution plan can be proposed by any person for insolvency resolution of the corporate debtor and shall submit it to the resolution professional. For this purpose, he shall be termed as “Resolution Applicant”. Promotors are excluded from submiting the resolution plan (Sec 29A)

The Resolution Professional shall present all the resolution plans before the committee of creditors and shall be subject to their approval fulfilling the requisite majority.

Step: 8 Reporting to NCLT: The Resolution professional shall report the outcome of the COC meeting to the NCLT. If Resolution plan is approved by the COC, NCLT shall approve the plan and it will be binding for all the stakeholders. COC may also ask for modification, exemption from NCLT.

Time- line for completing corporate resolution process

The corporate resolution process shall be completed in 180 days from the date the petition is admitted. However, if the resolution to extend the process of resolution process beyond 180 days but not more than 90 days passed by committee of creditors having a vote of seventy-five per cent of the voting shares, such extension shall be valid and no other such extension can be granted thereafter. After latest amendment, this period can be extended upto 330 days, includind exclusion of time, if any.

Liquidation

If the resolution plan is put before the Adjudicating authority after the dead line or not in the manner prescribed under the Code may pass an order requiring the corporate debtor to be liquidated. It is interesting to note that during the existence of resolution process also, the committee of creditors may take direction from NCLT to liquidate the Corporate Debtor. The resolution professional will automatically perform the duties of the liquidator if not replaced. Proceeds from the sale of the liquidation assets shall be distributed in order of priority mentioned under the code.

Dissolving the Corporate Debtor

Upon the assets of corporate debtor completely liquidated and the liquidator making an application, the NCLT shall pass an order dissolving the corporate debtor.

Resolution and Liquidation till December 2019

Total Cases Filed under IBC are around 19,000, out of which 10,860 are pending before different benches. As per the data available on IBBI (Insolvency and Banlruptcy Board of India), till December 2019 around 3300 companies have been admitted for CIRP under IBC. Out of them about 190 cases have been resolved through resolution plans and 780 have gone into liquidation. Around 150 applications have been withdrawn. Thus, among the CIRP that have been closed, only 15% CIRP have been yielded a resolution plan whereas 56% of the cases ended up going for liquidation. Thus the number of companies getting into liquidation is four times that of companies being rescued. These 190 companieis however, had assets which is four times of the assets of the 780 companies. These companies owed Rs. 3.8 Lakh crore to the creditors. However, the realisable value of the assets available with them, when they entered into CIRP was only Rs. 0.77 Lakh Crores. By the CIRP creditors have recovered 1.6 Lakh crore which is 207 % of the realisable value of the assets of the companies.