1. Corporate Insolvency Resolution Process
CS Yogina Kochar
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2. Corporate Insolvency Resolution Process
The Insolvency And Bankruptcy Code, 2016
An Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation 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 Goverment dues and to establish an Insolvency and Bankruptcy Board of India and for matters connected therewith or incidental thereto.
CS Yogina Kochar

3. Corporate Insolvency Resolution Process
The Insolvency And Bankruptcy Code, 2016
Part II, Chapter I and Chapter II deals with Corporate Insolvency Resolution Process covering section 4 to section 32 of the IBC, 2016.
Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation, 2016.
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4. Corporate Insolvency Resolution Process
As at the end of 30 September, 2018, 1198 corporates were undergoing
insolvency resolution process, as indicated in table below:-
Quarter
Number of Corporates undergoing resolution
(beginning)
(admitted)
(closure)
(at the end)
Jan-Mar, 2017 37 1 36
Apr-Jun, 2017
129 8
157
Jul-Sep, 2017
231 25
363
Oct-Dec, 2017
147 65
445
Jan-Mar, 2018
194 84
555
Apr-Jun, 2018
244 76
723
Jul-Sep, 2018
216
123
816
Total
N.A
1198
383
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5. Corporate Insolvency Resolution Process
Application
Minimum default is one lakh rupees, central government may specify higher amount which shall not be more than one crore rupees.
Important Definition
3(11) Debt: means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operations debt.
5(8) Financial debt: means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) to (i)
5(20) Operational debt: means a claim in respect of the provision of goods or service including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority.
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6. Corporate Insolvency Resolution Process
Important Definition
3(12) Default: means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor or the corporate debtor, as the case may be.
5(12) Insolvency commencement date: means the date of admission of an application for initiating corporate insolvency resolution process by the AA under sections 7,9 or section 10, provided where IRP is not appointed in the order admitting application, the insolvency commencement date shall be the date on which such IRP is appointed by AA.
5(14) Insolvency resolution process period: means a period of 180 days beginning from insolvency commencement date and ending on 180th day.
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7. Corporate Insolvency Resolution Process
Initiation of CIRP by financial creditor (section 7)
7(1) A financial creditor itself, jointly with other financial creditors, or any other person on behalf of financial creditor, may file application for initiation of CIRP.
7(2) Form and manner accompanied with fees.
7(3) Application supported by the (a) record of default, (b) name of resolution professional and (c) any other information specified by Board.
7(4) The AA shall within 14 days of receipt of application ascertain the existence of default.
7(5) The AA is satisfied that- (a) admit such application or (b) reject the application - chance to rectify defect.
7(6) The CIRP shall commence from date of admission of application.
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8. Corporate Insolvency Resolution Process
Initiation of CIRP by operational creditor (section 9)
9(1) After expiry of 10 days date of delivery of notice u/s 8(1), the operational creditor does not receive payment, notice of dispute, then the operational creditor, may file application for initiation of CIRP.
9(2) Form and manner accompanied with fees.
9(3) Application supported by the (a) copy of invoice demanding payment and notice, (b) affidavit of no dispute (c) certificate from financial institution, if any (d) copy of record with IU, if available and (e) any other confirmation of non payment, as specified.
9(4) Name of resolution professional as IPR is optional.
9(5) The AA shall within 14 days of receipt of application - (i) admit such application or (ii) reject the application – chance to rectify defect.
9(6) The CIRP shall commence from date of admission of application.
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9. Corporate Insolvency Resolution Process
Initiation of CIRP by corporate applicant (section 10)
10(1) On commencement of default of corporate debtor, the corporate applicant, may file application for initiation of CIRP.
10(2) Form and manner accompanied with fees.
10(3) Application supported by the (a)books of accounts, (b) name of resolution professional (c) special resolution or approval of ¾ th of partners.
10(4) The AA shall within 14 days of receipt of application - (i) admit such application or (ii) reject the application – chance to rectify defect.
10(5) The CIRP shall commence from date of admission of application.
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10. Corporate Insolvency Resolution Process
Section 14 :Declaration of moratorium
Section 15: Public announcement – Form A
Section 16: Appointment of interim resolution professional (IRP)
Section 17 & 20 : Management of affairs of the corporate debtor, as going concern
Section 19 : CD to extend co-operation to IRP.
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11. Corporate Insolvency Resolution Process
Claims
Claim by operational creditors – Form B.
Claim by financial creditors – Form C.
Claim by creditors in a class – Form CA.
Claim by workmen and employees – Form D.
Claim by representation of workmen and employees – Form E.
Claim by other creditors – Form F.
Substantiation of claims.
Cost of proof of claim and submission.
Verification of claims.
Determination of claims.
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12. Corporate Insolvency Resolution Process
Committee of Creditors
All financial creditors to be member of CoC.
All members of consortium /agreement to be member of CoC.
If a person is both financial creditor as well as operational creditors.
If an operational creditor has assigned its debt to a financial creditor.
Where there is no financial creditor.
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13. Corporate Insolvency Resolution Process
Committee of Creditors
Meetings- First, with in seven days.
Service of notice
Contents of notice.
Quorum – 33% of voting rights
Participation by video conference.
Conduct- Chairman, Attendance etc.
Voting and e-voting
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14. Corporate Insolvency Resolution Process
Appointment of Resolution Professional.
Information Memorandum – Regulation 36.
Invites expression of interest in Form G
Request for Resolution Plan
Resolution Plan and mandatory contents.
Approval of resolution plan, Compliance Certificate in Form H.
Other transaction.
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15. Corporate Insolvency Resolution Process
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CS Yogina Kochar