1. IPA Relevant sections: Sections 199 to 205
Contained in Chapter III of Part IV
Relevant Regulation: *IBBI(Insolvency Professional Agencies) Regulations 2016 w.e.f
* IBBI(Model Bye-laws and Governing Board(GB) of IPA)Regulations 2016 wef 21/11/2016
Only three IPA formed till 30/5/2016

2. MODEL :- REGULATED SELF REGULATION
INSOLVENCY PROFESSIONAL AGENCY (IPA)
Private professional body
Acts as specialized Intermediary
Registered with IBBI
Enrolls professional members
Oversees the conduct of their members
Ensures Transparency
MODEL :- REGULATED SELF REGULATION

3. REGISTRATION OF IPA S. 201 Rejection process Acceptance Process NCLAT
Application in Form A
IBBI to acknowledge it within 7 days
Rejection process
Acceptance Process
Hearing opportunity to be given
Must be communicated within 15 days from dt of order of rejection
NCLAT
Certificate to be issued in Form B

4. GOVERNING BOARD IPA S.2013 Minimum no. of 7 directors
No. of IP Professional members
Min.- 7 members
More than 50% should be RI
Not more than ¼ shall be IP
Chairman to be ID.
More than 50% shall be ID
No meeting without at least one ID
GOVERNING BOARD
IPA
S.2013

5. FUNCTIONS OF IPA Grant membership Lay down standards of professional
Monitor performance
Safeguard rights of members
Suspend or Cancel membership
Redress grievances of members
Publish information of its members
Must follow Model Bye-Laws specified by IBBA

6. BYE-LAWS OF IPA As per model Bye Laws
Bye-Laws to be submitted along with Application
Bye-Laws to be hosted on its website
Bye-Laws can be amended by three times the votes cast against the resolution.
Amended Bye-Laws – file within 7 days with IBBI

7. IPA Advisory Committee Disciplinary Committee Monitoring Committee
Other Committees
Membership Committees
Grievance Redressal Committee
IPA

8. Disciplinary Committee of IPA [Reg. 24(3) IBBI
Disciplinary Committee of IPA [Reg.24(3) IBBI.MODEL BYE LAWS AND GB REG)]
DC may pass an order for expulsion of a professional member if it has found that the professional member has committed offence, violation of code, etc. Any monetary fine imposed will go IBF.
GB- shall form an Appellate Panel (one ID + One from Law + One nominated by IBBI
Member aggrieved may appeal before Appellate Panel within 30 days.
Appellate Panel will dispose the same within 30 days.

9. Temporary Surrender of membership IPA
At least 30 days before
a) Become NR
b) Takes up employment
c) Start any business

10. IPA Sec.8 Companies /Sec.25 of CA 56
Minimum Net worth – 10 crore rupees
Paid up Share Capital of Rs. 5 crores
Not under control of NR
Not a subsidiary of a body corporate through more than one layer
Application to IBBI with Rs.10 lakh fee

11. In-Principle Approval
Application with a fee of Rs. 10 lakh
Fit & Proper Person
Valid for not more than one year
IPA
In-Principle Approval
R. 10

12. Board can institute Disciplinary proceedings against IPA under Reg 8
of IBBI(IPA)
* show cause notice by Board based on inspection/ investigation/ other material on record
* Board shall constitute Discipilnary committee for disposal of show cause notice
The Disciplinary Committee of Board shall dispose of the show cause notice by reasoned order adhering to the principles of natural justice and shall endeavour to dispose of within six months of the assignment
The DC may (1) no action (2) warning (3) impose penalty (4) suspend or cancel registration (5) disgorgement (6) ask the Board totake action for restitution.
The above DC order shall be effective not before 30 days ( or lesser days if so specified with reasons) from the date of order.
If cancellation or suspension, DC shall alsoallow continuation of pending works, transfer of membership to other IPA.
REG 9 of IBBI(IPA) :Appeal to NCLT within 30 days of receipt of order.

13. IPA; Synopsis Section wise
S.199: No person can carry IPA and no person can enrol IP without Registration with Board
S.200: Principals governing Registrations of IPA
S.201: Such form and manner with such fee as prescribed
* Application in Form A to be acknowledged within 7 Days
* If satisfied, registration granted in Form B
* If not satisfied: Hearing opportunity
*Order granting/rejecting to be communicated within 15 days
* Certificate of Registration in specified Form B
*renewal
*Board may suspend, cancel certificate on certain grounds after opportunity of hearing
* such order of suspension or cancellation shall be passed only by wholetime members of Board
S.202: Appeal to NCLAT
S.203: power to Board to make regulation for setting upof GB of IPA
S.204: Functions of IPA
S.205: Bye-laws of IPA should be consistent with Model Byelaws specified by Board u/s 196(2)

14. INSOLVENCY
Insolvency is a situation where individuals or organizations are unable to meet their financial obligation.

15. CODE Circulars / Notifications / Others
RULES – (as prescribed by RULES)
Rules are made by CG
Section 3(26) of Code
REGULATIONS – (as specified by Regulations)
Regulations are made by IBBI
Section 3(32) of Code
Section 3(28) of Code
Circulars / Notifications / Others
- Up-till now only 9 notifications have been issued by the Board

16. SECTION 3 of CODE (General Definitions)
3. In this Code, unless the context otherwise requires, -
(1) Definitions
(2) …………..
Thus the definitions are not final & conclusive for entire code. The contexts in which these terms are used are also important.

17. OLD POSITION: Companies: Individuals:
Presidency Towns Insolvency Act, For Kolkata, Mumbai & Chennai or
The Provincial Insolvency Act, For Rest of India.
Companies:
SICA 1985
The Recovery of Debt due to banks and FI Act 1993
SARFAESI Act 2002
Companies Act

18. 1. Existing laws were not aligned with market realties
PROBLEM IN EXISTING LAWS
1. Existing laws were not aligned with market realties
2. Existing laws had several problems and were inadequate too.
3. There was no single window resolution available.
4. The resolution & jurisdiction was with multiple openings with overlapping powers that was leading to delays and complexities in the process.

19. CPC SICA RDDBI SARFAESI CDR/JLF/SDR/S4A
Current Remedies
Civil Procedure Code 1908
CPC
Lenders Interest were not truly covered. Promoters used it as a ploy to delay the payments.
No Time Limit in BIFR
SICA
No time limit – 3/4 Years
Poor Infrastructure
RDDBI
SARFAESI
CDR/JLF/SDR/S4A
Three Ways
1. Securitization
2. Reconstruction
3. Enforcement of Security
Too lenient towards borrowers
Too extreme in favor of lenders
Also not successful

20. The Part III of Code which deals with individuals & Partnership firms are not applicable in Jammu & Kashmir.

21. Code is presently not applicable to Corporate persons who are regulated financial service providers like banks, FIs, Insurance Companies, etc.
But code shall apply to NBFCs not accepting deposits. Sec. 3(16)

22. CODE APPLIES Sec. 2
1.Co. under CA 13 / OLD CA
2. Co. by special Act
3. LLP
4. Partnership Firm
5.Individuals
6. Other body Incorporated under any law as notified by CG

23. Premise the code
1.Insolvency test moved from ‘erosion of net worth’ to ‘payment default’
2.Single insolvency and bankruptcy framework. Replaces Sick Industrial Companies (Special Provisions) Repeal Act, 2003 and modifies / amends some provisions of other legislations like Companies Act, 2013, SARFAESI Act,2002 etc.
3.Time bound resolution process
4.Clear and unambiguous process to be followed by all stakeholders. Shift of control from shareholders and promoters to creditors
5.Provide confidence to lenders of their rights and their enforcement.
6.Better symmetry of information flow between creditors and debtors
7.Shift of jurisdiction to NCLT and DRT
8.Government dues would rank below to those of secured creditors and unsecured financial creditors
9.In case of fraudulent diversion of assets, personal contribution can be sought; imprisonment possible
10.Insolvency Professional (IP) to take over the management and operations of the borrower during the CIRP
Source:

24. FC OC BOD DRT DRAT IBBI IPA IP IPE IU NCLT NCLAT COC Voting Rights
CORPORATES
IBBI
IPA IP
IPE IU
NCLT
NCLAT
NON-CORPORATES
DRT
DRAT
COC
Voting Rights
In driving seat FC
Only those OC with more than 10% of total debts can take part in COC with not voting right. OC
Can only take part in COC with no voting right.
BOD

25. Insolvency and Bankruptcy Board of India (IBBI)
Insolvency and Bankruptcy Code ecosystem
Insolvency and Bankruptcy Board of India (IBBI)
Insolvency Agencies
Information Utilities (IUs)
NCLT –The Adjudicating Authority (AA)
Insolvency Professionals (IPs)
Committee
of Creditors (CoC)
Insolvent entity

26. OBJECTIVE OF THE CODE:
To consolidated and amend laws relating to Reorganization
To amend laws relating to insolvency resolution of all persons – corporate or non corporate
Time bound manner (strict time frame)
Maximize value of assets
Promote Entrepreneurship
Ensure availability of credit
Balancing of interest of all stakeholders
Alteration in priority of Govt. Dues by changing waterfall mechanism
To establish Insolvency & Bankruptcy Board of India (IBBI) – which will act with as
1. regulations powers
2. Legislative powers
3. Executive powers
4. Quasi Judicial Powers

27. Part 1 Part 2 Part 3 Part 4 Part 5 Structure of the Code
Distinct Parts to administer various constituents
Preliminary and Definitions
Part 1
Corporate Debtors
Part 2
Individuals and Partnerships
Part 3
Board, Professionals, Agencies and Utilities
Part 4
Miscellaneous Provisions
Part 5
Source:

28. CODE Five Parts Part I to Part V
Sec. 1 to Sec. 244 – Mostly Notified by MCA
Sec. 245 to Sec. 255 are regarding amendments to various acts.

29. INSOLVENCY PROFESSIONAL
Part-IV Chapter - 4
INSOLVENCY PROFESSIONAL
3(19) – Definition of Insolvency Professional (IP) – A person enrolled u/s 206 with Insolvency Professional Agency (IPA) and registered with Board u/s 207.

30. 2nd Registered with IBBI (Board)
Contd….
Two Level Regulations
Both conditions to be satisfied
1st member of IPA
2nd Registered with IBBI (Board)

31. IP will handle Section 208(1)
Fresh Start order Process for Individual
C-II
P-III
IRP for Individuals
C-III
IRP for Corporate
P-II
Individual Bankruptcy
C-IV
Liquidation of Corporate Debtor

32. Code of Conduct (IP) Section 208(2)
To take reasonable care & due diligence while performing his duties
To comply with bye laws of IPA
To Allow IPA to inspect his records
To submit copy of records of every proceedings to adjudicating authority & Board and IPA
To perform his function in such manner & condition as may be specified
Code of Conduct (IP) Section 208(2)

33. Corporate Insolvency
Also covers personal guarantor
Minimum Amount 1 Lac
No notice by F/C before filing application before NCLT.

34. Who can make application?
F/C
O/C
C/D

35. Moratorium & Public Notice Within 14 days IRP
Default
Application CIRP
Within 14 days
Admission or Rejection
If admitted
Calm Period
Moratorium & Public Notice
Within 14 days IRP
COC RP
Approval or rejection by NCLT

36. Only to financial creditors
VOTING RIGHTS in COC
Only to financial creditors
In proportion to his financial debt vis a vis total financial debt
Resolution plan by at least 75% majority
Decisions to apply for extension of time – only by 75% majority
Actions set out in Sec 28 …only by 75% majority
Debts owed by a corporate debtor to a related party do not have representation, participation or voting rights.

37. INSOLVENCY REOLUTION PROCESS
Corporate (including LLP & personal guarantors for corporate loans)
Initiation by Financial Creditor
Initiation by Operational Creditor
Corporate Debtor
Individuals & Partnership Firms
Initiation by very small Amount
Others
180 days from admission + one time of 90 days (if 75% of financials creditors agree.)
Fresh Start
180 days
Forgiveness
No IRP
RP majority of Creditors
180 days
Negotiation between Dr. & Cr. – RP – Calm Period - Moratorium
Failing - Liquidation
Failing – Bankruptcy Resolution

38. IRP (INTERIM RESOLUTION PROFESSIONAL)
Issuance of Public Notice of CIRP
Collections of claims received
Constitution of COC
Conduct of 1st Meeting of COC
To manage the Operation as a going concern as per section 18 & 20.

39. As per S.18, the IRP is required inter alia to collect (1) business operation details, financial position and operational payments for last two years and also list of all assets and liabilities as on initiation date.

40. IP Summary
To take immediate control and custody of all the assets including the business records.
To represent and act on behalf of the Corporate Debtor with third parties, exercise rights for the benefit of corporate debtors in judicial, quasi judicial or arbitration proceedings.
Raise interim finance subject to the approval of COC u/28.
Appoint accountants, legal or other professionals in the manner specified by Board.
Maintain updated list of claims.
Convene & attend all COC meetings
Prepare Information Memorandum u/s 29
Invite prospective lenders, investors or any other persons to put forward resolution plans.
To file applications for avoidance of transactions in accordance with Chapter III.
Such other action as may be specified by Board.

41. Sec. 3(19) Sec. 206 Definition of IP Enrolled with IPA
No person shall render his services as insolvency professional under this CODE without being enrolled with IPA & IBBI.

42. I II III IV V VI Waterfall Mechanism
Failing Resolution in 180 days + 90 days
Then
Compulsorily heading for liquidation
Waterfall Mechanism
Cost of insolvency process & liquidations I
Wages (24 months) + Secured creditor relinquishing their right. II
Employee wage (12 months)
III
Unsecured Financial Debt Creditors IV
Govt. dues + Secured Creditor after enforcement of Security V
Any remaining debts and dues VI