1. A. R. RAMASUBRAMANIA RAJA1

2. 3

3. INTRODUCTION
The Insolvency and Bankruptcy Code, (IBC) is the bankruptcy law of India which seeks to CONSOLIDATE the existing framework by creating a single law for insolvency and bankruptcy.
An Act to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto 4

4. COVERAGE WHAT IS IBC? WHY IBC FOR INDIA? WHAT ARE THE OBJECTIVES ?
STRUCTURE OF THE ACT
WHO ARE THE ROLE PLAYERS ?
WHAT IS ITS COVERAGE ?
WHAT IS THE KEY POINT ?
WHAT IS THE RISKY POINT ?
WHAT IS THE ROLE OF CMA ?
WHAT IS THE ROLE OF PCMA ?

5. What is a CODE ? “Code” is usually known as a
collection or compendium of laws.
It refers to a systematic and comprehensive compilation of laws, rules or regulations that are consolidated and classified according to a particular subject matter.

6. Need for Insolvency and Bankruptcy code ?

7. What is Insolvency and Bankruptcy code ?

8. INSOLVENCY AND BANKRUPTCY CODE
This unified regime envisages a structured and Time-bound Process For Insolvency Resolution And Liquidation, which should significantly improve debt recovery rates and revitalize the ailing Indian corporate bond markets.
The Code offers A Uniform, Comprehensive Insolvency Legislation encompassing all companies, partnerships and individuals (other than financial firms). The Government is proposing a separate framework for bankruptcy resolution in failing banks and financial sector entities. 12

9. Understanding the Insolvency and Bankruptcy code ?

10. APPLICABILTY Any Company incorporated under the Companies
Act, 2013 or under any provisions
Any other Company governed by any Special Act
Any LLP incorporated under the LLP Act, 2008
Any other body, as notified by the Central Government
Partnership Firms
Individuals 15

11. Inception of Insolvency and Bankruptcy Laws in India ?

12. Inception of Insolvency Laws in India
Presidency Towns Insolvency Act, 1909
Provincial Insolvency Act, 1920
COMPANIES ACT, 2013
IBC, 2016
SARFAESI,
SICA, 1985
RDDBI, 1993 17

13. Impact on other laws after the IBC?

14. Post IBC - Inter-play between SICA, RDDBI, SARFAESI and IBC
After IBC being notified and SICA Repeal Act in force, BIFR has been dissoluted and the new cases are being handled by NCLT.
All pending matters before BIFR are abated as the sickness/ insolvency criterion in IBC is very different from what is in SICA
SARFAESI & RDDBI will hold the same force.
But now secured creditors can approach under both SARFAESI and IBC
as they found suitable.
Now Adjudicating Authority for the individuals will be DRT while the NCLT will be governing issues for corporate person.
By virtue of IBC the Voluntary Winding Up Procedure has been shifted from Companies Act to IBC. 19

15. Why IBC for India ?

16. IBC FOR INDIA
India currently ranks 136 out of 189 countries in the World Bank's index on the ease of Resolving Insolvencies.
Ease of Doing Business
The Code promises to bring about far-reaching reforms with a thrust on Creditor Driven Insolvency Resolution.
It aims at early identification of financial failure and Maximizing The Asset Value Of Insolvent Firms. 21

17. Manifold laws & forums BIFR SARFAESI Act, 2002 SICA 1985
INDUSTRIAL SICKNESS
SARFAESI Act, 2002
RECONSTRUCTION OF FINANCIAL ASSETS
REGULATE SECURITISATION
S.3(1) Recovery of Debts Due to Banks and Financial Institutions Act, 1993
To attain
objectives Of
SARFAESI Act. 22

18. Corporate Insolvency Resolution Process and Time Limit
Chapter II of Part II of the Insolvency and Bankruptcy Code, 2016 deals with corporate insolvency process in normal course.
It should be completed within 180 days from the commencement of insolvency process extendable by 90 days by Adjudicating Authority (NCLT) on basis of resolution passed by the creditors having 75% voting share.
The same provision exists in other Chapter for individual and partnership firm bankruptcy.
Fast Track Corporate Insolvency Resolution Process and Time Limit
Chapter IV of Part II of the Insolvency and Bankruptcy Code, 2016 deals with the fast track insolvency resolution process.
The Fast Track corporate insolvency resolution should be completed within 90 days from the commencement of insolvency process extendable by 45 days by Adjudicating Authority (NCLT) on basis of resolution passed by the creditors having 75% voting share.
The same provision exists in other Chapter for individual and partnership firm bankruptcy

19. Cause a Public Announcement Appoint Interim Resolution Professional
180 days
270 days
90 days (Maximum)
FAST TRACK :
45 days
(One time)
135 days
90 days
Adjudicating Authority after admission of application shall, by an order
Declare a Moratorium
Cause a Public Announcement
Appoint Interim Resolution Professional 23

20. Difference between Insolvency Bankruptcy and Liquidation?

22. is the process of winding up a corporation or incorporated entity.
INSOLVENCY is the inability of a person or corporation to pay their bills as and when they become due and payable.
BANKRUPTCY
is when a person is declared incapable of paying their due and payable bills.
LIQUIDATION
is the process of winding up a corporation or incorporated entity.

23. Objectives ?

24. OBJECTIVES
The objective of the new law is to promote entrepreneurship, availability of credit, and balance the interests of all stakeholders by consolidating and amending the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner
IBC proposes a paradigm shift from the existing ‘Debtor in possession’ to a ‘Creditor in control’ regime
IBC aims at consolidating all existing insolvency related laws as well as amending multiple legislation including the Companies Act.

25. Insolvency professional to take over the management of the Company.
OBJECTIVES
The code would have an Overriding Effect on all other laws relating to Insolvency & Bankruptcy.
The code aims to Resolve Insolvencies In A Strict Time-bound Manner - the evaluation and viability determination must be completed within 180
days.
Moratorium period of 180 days (extendable upto 270 days) for the Company.
Insolvency professional to take over the management of the Company.

26. Structure of the Act ?

27. Applicability Scope STRUCTURE OF ACT Relates to:
Applicable To All Kinds Of:
Corporate Enterprises;
Limited Liability Partnerships;
Partnership Firms; and
Individuals.
Relates to:
Insolvency;
Liquidation;
Voluntary Liquidation (solvent insolvency); and
Bankruptcy 32

28. STRUCTURE OF ACT
In entirety, the Code has 255 sections which are divided into 5 Parts as given below
Part III Insolvency Resolution and Bankruptcy for individuals and
Partnership Firms
Part II Insolvency Resolution and Liquidation for
Corporate Persons
Part I Preliminary (Definitions)
Part IV
Regulation of Insolvency Professionals, Agencies and Information Utilities
Part V Miscellaneous (enables amendments in other
statues such as Companies
Act 2013)

29. Who are the role players ?

30. Insolvency and Bankruptcy Board of India (IBBI)
ROLE PLAYERS
Regulator
Insolvency and Bankruptcy Board of India (IBBI)
Insolvency Professional Agencies;
Insolvency Professionals; and
Information Utilities 35

31. Adjudicator ROLE PLAYERS National Company Law Tribunal
Debt Recovery Tribunal
Non-Corporate
Entities
Corporate Entities
Companies
/LLPs
Individuals and Partnership Firms 36

32. Coverage of the Act ?

33. Any other body, as notified by the Central Government
APPLICABILITY
Any Company incorporated under the Companies Act, 2013 or under any provisions
Any other Company governed by any Special Act
Any LLP incorporated under the LLP Act, 2008
Any other body, as notified by the Central Government
Partnership Firms
Individuals

34. Key points of IBC ?

35. WHO CAN INVOKE? Financial Creditor (Sec.7)
- Any person to whom a financial debt is owed &
- Includes a person to whom such debt legally assigned or transferred
Operational Creditor (Sec.9)
- A person to whom an operational debt is owed &
- Includes any person to whom such debt legally assigned or transferred
Corporate Debtor (Sec.10)
- A corporate person who owes a debt to any person

36. KEY POINTS 1. Corporate Debtors: Two-Stage Process
The Insolvency Resolution Process (IRP)
Liquidation
22. Insolvency Resolution Process for Individuals/Unlimited Partnerships
3. Institutional Infrastructure
The Insolvency Regulator
Insolvency Resolution Professionals
Information Utilities
Adjudicatory authorities

37. Risky points of IBC ?

38. RISKY POINTS
CRIMINAL LIABILITY
UNDISPUTED DEBT
The NCLT will face the biggest challenge in the process of transitioning existing cases to the IBC
As of March 2015, there were around 4,200 pending CLB cases. All of these will now be transferred to the NCLT.

39. What is the role of CMA ?

40. Not Eligible to write Insolvency Examination
ROLE OF CMA
CMA
CMA MEMBERSHIP
15 Years
<10 Years
>10 Years
6 months limited period registration
Not Eligible to write Insolvency Examination
Eligible to write
Limited Insolvency
Examination

41. Opportunities for CMAs under Insolvency and Bankruptcy Code
As Interim Resolution Professionals (Section 16) and manage the affairs of the Corporate Debtors as “going concern” during the insolvency resolution process in interim period of 30 days;
As Resolution Professional (Section 22), the creditors committee may either appoint the same “interim resolution professional” for preparing the “Resolution Plan” and managing the affairs of the Corporate Debtor as “going concern” during the insolvency resolution process or may appoint other Professional (CMA) in his place;
As Liquidator (Section 33) to be appointed by Adjudicating Authority (NCLT) on the grounds explained in this article under “Liquidation Process”;
As Voluntary Liquidator (Section 59) to be appointed by Corporate Debtors;

42. Opportunities for CMAs under Insolvency and Bankruptcy Code
Insolvency Resolution Professional (Section 82) by Adjudicating Authority in case of “Insolvency and Bankruptcy for individuals and Partnership Firms”;
As Insolvency Resolution Professional (Section 97) by Adjudicating Authority for initiating the insolvency resolution process by debtor in case of “Insolvency and Bankruptcy for individuals and Partnership Firms”
As insolvency professional as bankruptcy trustee (Section 125) by Adjudicating Authority in case of “Insolvency and Bankruptcy for individuals and Partnership Firms”
As Valuer of properties and assets of liquidation estate under the Code and Regulations being framed under the Insolvency and Bankruptcy Code 2016;

43. We have Partnership Firm of Practicing Cost Accountants; can a Firm become Insolvency Professional under IBC 2016?
Yes. Regulation 12 recognizes some the entities who can become Insolvency Professionals. Provisions of Regulation 12 (1) are as follows:
12(1): A limited liability partnership, a registered partnership firm or a company may be recognised as an insolvency professional entity if-
a majority of the partners of the limited liability partnership or registered partnership firm are registered as insolvency professionals; or
a majority of the whole-time directors of the company are registered as insolvency professionals, as the case may be.
Regulation 13(3) provides: An insolvency professional entity shall be jointly and severally liable for all acts or omissions of its partners or directors as insolvency professionals committed during such partnership or directorship.

44. Shall I as a Professional Member of IPA, liable to Code and Conduct prescribed by the Institute of Cost Accountants of India for its members OR any other Code and Conduct?
As the Institute of Cost Accountants of India has incorporated its separate section 8 company under the Companies Act, 2013 to function as “Insolvency Professional Agency (IPA)” under the provisions of the Insolvency and Bankruptcy Code 2016, accordingly role and responsibilities of IPA under the IBC 2016 shall be different from the Cost and Works Accountants Act, 1959 and Regulations thereof.
Thus the Code and Conduct applicable to Professional Members of IPA shall be those as prescribed under FIRST SCHEDULE of the Insolvency and Bankruptcy Board of India (Insolvency Professionals)Regulations, 2016.

45. What are functions and duties of Insolvency Professionals under IBC 2016?
As per the provisions of Section 208: (1) Where any insolvency resolution, fresh start, liquidation or bankruptcy process has been initiated, it shall be the function of an insolvency professional to take such actions as may be necessary, in the following matters, namely:—
a fresh start order process under Chapter II of Part III;
individual insolvency resolution process under Chapter III of Part III;
corporate insolvency resolution process under Chapter II of Part II;
individual bankruptcy process under Chapter IV of Part III; and
liquidation of a corporate debtor firm under Chapter III of Part II.
Cont……….

46. What are functions and duties of Insolvency Professionals under IBC 2016?
…………Cont
(2) Every insolvency professional shall abide by the following code of conduct:—
to take reasonable care and diligence while performing his duties;
to comply with all requirements and terms and conditions specified in the bye-laws of the insolvency professional agency of which he is a member;
to allow the insolvency professional agency to inspect his records;
to submit a copy of the records of every proceeding before the Adjudicating Authority to the Board as well as to the insolvency professional agency of which he is a member; and
to perform his functions in such manner and subject to such conditions as may be specified.

47. Duties of Members (Insolvency Professionals)
Under Clause VII of Schedule- Regulation 13 of the Model Bye-Laws, the following duties of members (Insolvency Professionals) are mentioned:
13(1):In the performance of his functions, a professional member shall-
act in good faith in discharge of his duties as an insolvency professional;
endeavour to maximize the value of assets of the debtor;
discharge his functions with utmost integrity and objectivity;
be independent and impartial;
discharge his functions with the highest standards of professional competence and professional ethics;
continuously upgrade his professional expertise;
perform duties as quickly and efficiently as reasonable, subject to the timelines under the Code;
comply with applicable laws in the performance of his functions; and
maintain confidentiality of information obtained in the course of his professional activities unless required to disclose such information by law. 40

48. IBBI Online Portal

49. http://www.ibbi.gov.in/ Online Portal52

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51. CONCLUSION
The Code was enacted to consolidate & amend various laws relating to insolvency, bankruptcy, liquidation & further delete some infructuous provisions due to change in the business complexities, opening of economies & further participation of Foreign Investors in domestic arena.
With the government focus on ‘Ease of doing business’. It was imperative to adopt a new & uniform institutional framework to facilitate a formal and time bound insolvency resolution process & liquidation. 53

52. CONCLUSION
A new chapter has been added in the history of insolvency, bankruptcy, liquidation litigation where a single window is given to the corporate litigants, individuals, LLP to adjudicate upon the matters complained off in a fast track mode.
This will not only change the landscape of Corporate litigation avenues
but will also pave path of robust defaulted assets recovery.

53. THANK YOU