Insolvency and Bankruptcy Board of India (IBBI)

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15-Jun-2022: IBBI amends Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) Regulations, 2017 and the Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017

With a view to put in place, a streamlined and swift complaint handling procedure, the Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) (Amendment) Regulations, 2022 and the Insolvency and Bankruptcy Board of India (Inspection and Investigation) (Amendment) Regulations, 2022 to amend the Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) Regulations, 2017 and the Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017.

The Insolvency and Bankruptcy Code, 2016 (Code) read with Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) Regulations, 2017 provide mechanism for redressal of complaints and grievances filed against insolvency professionals, insolvency professional agencies and information utilities. Further the Code read with Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017 provide mechanism for carrying out inspections and investigations on insolvency professional agencies, insolvency professionals and information utilities and passing orders by Disciplinary Committee.

The mechanism of complaint/ grievance redressal and subsequent enforcement action has been amended to have expeditious redressal and also to avoid placing undue burden on the service providers. To curtail such delays and to ensure expeditious and result oriented enforcement mechanism, the Amendment Regulations provides for following:

  • Revisions in various timelines related to enforcement process provided in the (Grievance and Complaint Handling Procedure) Regulations, 2017 and (Inspection and Investigation) Regulations, 2017 for addressing the issue of delay in present mechanism.
  • Effective participation of IPAs in regulating the IPs through examination of grievances received against IPs.
  • Intimation to Committee of Creditor (CoC)/ Adjudicating Authority (AA) about the outcome of Disciplinary Committee (DC) order.

The Amendment Regulations are effective from 14th June, 2022. These are available at www.ibbi.gov.in.

15-Jun-2022: Insolvency and Bankruptcy Board of India amends the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

The Insolvency and Bankruptcy Board of India (IBBI/Board) notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2016 (CIRP Regulations) on 14th June, 2022.

The amendment provides the operational creditors to furnish extracts of Form GSTR-1, Form GSTR-3B and e-way bills, wherever applicable along with the application filed under section 9 of the Insolvency and bankruptcy Code, 2016. These additional set of documents, can  be used as evidence of transaction with the corporate debtor, debt and default easing the process of admission. These documents will also to be submitted as part of the claims submitted to the resolution professional to help collation of claims. Further, creditors filing applications under section 7 or 9 of the Code are required to furnish details of their PAN and Email ID to ensure smooth correspondence.

In order to improve information availability, the amendment places a duty on corporate debtor, its promoters or any other person associated with the management of the corporate debtor to provide the information in such format and time as sought by the resolution professional.

The amendment places a duty on the creditors to share information regarding the assets and liabilities of the corporate debtor, the financial statements and other relevant financial information from their records and available reports to help the resolution professional in preparation of the information memorandum and relevant extracts from the transaction or forensic audit reports to aid the resolution professional in preparation of the avoidance application.

The Amendment also addresses the issue of treatment of avoidance applications filed with the Adjudicating Authority after closure of the corporate insolvency resolution process (CIRP). It provides that the resolution plan shall provide for manner in which such applications will be pursued after the approval of the resolution plan and the manner in which the proceeds, if any, from such proceedings shall be distributed.

The amendment includes a definition of significant difference in valuations during CIRP and enables the committee of creditors to make a request to the resolution professional regarding the appointment of a third valuer.

8-Apr-2022: Insolvency and Bankruptcy Board of India amends the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017

The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 2022 (Amendment Regulations) on 05th April, 2022.

The Insolvency and Bankruptcy Code, 2016 read with Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 provide mechanism for voluntary liquidation of solvent corporate person. It has been noticed that there has been substantial delay in completion of voluntary liquidation process, though the process, in general, involve nil or negligible claims of creditors, fewer assets, if any, to be realized and few litigations, if any, to be concluded. To curtail such delay and ensure faster exit for firms, the Amendment Regulations modify timelines for some stipulated activities undertaken during the process as under:

  • The liquidator shall prepare the list of stakeholders within fifteen days (against the previously stipulated forty-five days) from the last date for receipt of claims, where no claim from creditors has been received till the last date for receipt of claims.
  • The liquidator shall distribute the proceeds from realization within thirty days (against the previously stipulated six months) from the receipt of the amount to the stakeholders.
  • It has been further provided that the liquidator shall endeavour to complete the liquidation process of the corporate person within two hundred and seventy days from the liquidation commencement date, where the creditors have approved the resolution under section 59(3)(c) or regulation 3(1)(c), and ninety days from the liquidation commencement date in all other cases (against the previously stipulated 12 months in all situations).

To provide summary of actions taken by the liquidator during the voluntary liquidation process, the Amendment Regulations specify a compliance certificate which is required to be submitted along with application under section 59(7) to the Adjudicating Authority, by the liquidator. It shall facilitate the Adjudicating Authority to adjudicate dissolution applications expeditiously.

The Amendment Regulations are effective from 05th April, 2022. These are available at www.mca.gov.in and www.ibbi.gov.in.

1-Oct-2021: Insolvency and Bankruptcy Board of India celebrates Fifth Annual Day

The Insolvency and Bankruptcy Board of India (IBBI) celebrated its Fifth Annual Day here today. Dr. Bibek Debroy, Chairman, Economic Advisory Council to Hon’ble Prime Minister graced the occasion as the Chief Guest. Shri Rajesh Verma, Secretary, Ministry of Corporate Affairs and Dr. Krishnamurthy Subramanian, Chief Economic Adviser, Ministry of Finance were Guests of Honour. Dr. M. S. Sahoo, Former Chairperson, IBBI graced the occasion as a special invitee.

To commemorate its establishment, IBBI has instituted an Annual Day Lecture Series since its inception. Dr. Bibek Debroy delivered the Fifth Annual Day Lecture on “From No Exit to Easy Exit ‐ A Case Study of IBC”.

In his keynote address, Dr. Debroy referring to the ancient Indian wisdom from Chanakya Niti noted the successful nurturing of IBBI in first five years and suggested that stage is now set right for it to further take plunge towards maturity. He noted the potential role of IBC in promoting entrepreneurship. He highlighted evolution of insolvency laws over the centuries and appreciated the modern framework of IBC. Calling IBC, a work in progress, he lauded that IBC and IBBI have made it easy for entrepreneurs to exit, however, endeavour has to be to make the processes still easier.

On this occasion, Shri Rajesh Verma, Secretary, Ministry of Corporate Affairs appreciated the development of IBC ecosystem and outcomes of Code in a short span of time. Citing example of process of framing of regulations for pre-packaged insolvency resolution process, he noted the hard work put in by IBBI made it possible to notify the regulations in record time of 5 days. He applauded IBBI for facilitating successful implementation of the Code.

Dr. Krishnamurthy Subramanian, Chief Economic Adviser, Ministry of Finance, in his address dwelt upon the impact that IBC has had on the Indian economy in a short span of time. He appreciated that IBC has ended feudalism of the promoters in a capitalist society to a great extent. He noted the significant improvements which IBC has achieved over the other debt resolution mechanisms like SARFAESI, DRT, etc. He highlighted the remarkable outcomes of Indian insolvency resolution framework with a perspective and in comparison, to the outcomes of the USA’s framework of resolving insolvency. He also cited the ethical perspective to insolvency resolution and urged the industry to adopt ethical approach to resolving insolvency.

Dr. M.S. Sahoo, Former Chairperson, IBBI, noted the journey of economic reforms starting from 1990s to the enactment of IBC, 2016, leading to ultimate economic freedom to exit for honest business failures. He spoke about the initial journey of IBBI and IBC, despite no prior experience of such market institution and mechanism in country. He appreciated the role played by all stakeholders in development of IBC ecosystem. He also highlighted the difference between exit of entrepreneur and enterprise and its policy implications.

As part of the Annual Day celebrations, dignitaries led by Dr. Subramanian released IBBIs annual publication, “Quinquennial of Insolvency and Bankruptcy Code, 2016”. This publication presents the thoughts and perspectives of practitioners, policymakers, subject matter experts and academicians, that elucidate and stimulate thoughts around the journey of the Insolvency and bankruptcy Code, 2016 (Code) thus far and the road ahead. It is an attempt to contribute to the scholarly and policy discourse around insolvency law.

On the occasion, the IBBI, in collaboration with the Indian Institute of Insolvency Professionals of ICAI, released an e-book titled “5 years of facilitating ease of exit”, to commemorate five years’ of enactment of the Code. The e-book captures the eventful journey of the IBC ecosystem, implementation, success stories, outcomes, awards and recognitions in the form of vivid visuals, photographs and articulative text.

To commemorate five years of successful implementation of the Code, release of customised ‘My Stamp’ on the “Insolvency and Bankruptcy Code, 2016” was facilitated by Shri Harpreet Singh, Postmaster General, Delhi Circle, Department of Posts, on the occasion.

IBBI, in collaboration with MyGov.in and BSE IPF, had conducted ‘2nd National Online Quiz on Insolvency and Bankruptcy Code, 2016’ from 1st to 31st August, 2021, in order to promote further awareness and understanding of the Code, among various stakeholders. The Quiz received an overwhelming response with over 63,000 participants spread across all States and Union Territories. On the occasion, Dr. Subramanian gave away the medal, certificate of merit and cash award to the best performer of the quiz.

In his welcome remarks, Dr. Navrang Saini, Whole Time Member, IBBI, thanked all stakeholders who have been part of the successful journey of IBBI and IBC’s ecosystem. He mapped the journey of enactment of Code and its outcomes. He highlighted achievements of IBBI and noted that it’s an institution in the making. He thanked government, the judiciary, and the players of the ecosystem for their contribution in this successful journey of 5 years of IBC and IBBI.

The Annual Day witnessed presence of a limited number of dignitaries in person, in the wake of COVID-19 pandemic protocol. However, large number of stakeholders witnessed the event live, through e-mode.

Dr. Mukulita Vijayawargiya, Whole Time Member, IBBI extended a hearty vote of thanks at the conclusion of the event.

21-Jul-2021: Insolvency and Bankruptcy Board of India amends the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

The Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2016 on 14th July, 2021.

The amendment regulations enhance the discipline, transparency, and accountability in corporate insolvency proceedings:

A corporate debtor (CD) may have changed its name or registered office address prior to commencement of insolvency. The stakeholders may find it difficult to relate to the new name or registered office address and consequently fail to participate in the CIRP. The amendment requires an insolvency professional (IP) conducting CIRP to disclose all former names and registered office address(es) so changed in the two years preceding the commencement of insolvency along with the current name and registered office address of the CD, in all its communications and records.

The interim resolution professional (IRP) or resolution professional (RP) may appoint any professional, including registered valuers, to assist him in discharge of his duties in conduct of the CIRP. The amendment provides that the IRP/RP may appoint a professional, other than registered valuers, if he is of the opinion that the services of such professional are required and such services are not available with the CD. Such appointments shall be made on an arm’s length basis following an objective and transparent process. The invoice for fee shall be raised in the name of the professional and be paid into his bank account.

The RP is duty bound to find out if a CD has been subject to avoidance transactions, namely, preferential transactions, undervalued transactions, extortionate credit transactions, fraudulent trading and wrongful trading, and file applications with the Adjudicating Authority seeking appropriate relief. This not only claws back the value lost in such transactions increasing the possibility of reorganisation of the CD through a resolution plan, but also disincentivizes such transactions preventing stress to the CD. For effective monitoring, the amendment requires the RP to file Form CIRP 8 on the electronic platform of the Board, intimating details of his opinion and determination in respect of avoidance transactions. The IBBI has specified the format of CIRP 8 through a Circular issued yesterday. This Form needs to be filed in respect of every CIRP ongoing or commencing on or after 14th July, 2021.

9-Apr-2021: Insolvency and Bankruptcy Board of India notifies the Insolvency and Bankruptcy Board of India (Pre-packaged Insolvency Resolution Process) Regulations, 2021.

The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021 promulgated on 4th April, 2021 provides for pre-packaged insolvency resolution process (PPIRP) for corporate debtors classified as micro, small and medium enterprises. The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Pre-packaged Insolvency Resolution Process) Regulations, 2021 (PPIRP Regulations) today to enable operationalisation of PPIRP.

The PPIRP Regulations detail the Forms that stakeholders are required to use, and the manner of carrying out various tasks by them as part of the PPIRP. These provide details and manner relating to:

  1. Eligibility to act as resolution professional, and his terms of appointment;
  2. Eligibility of registered valuers and other professionals;
  3. Identification and selection of authorised representative;
  4. Public announcement and claims of stakeholders;
  5. Information memorandum;
  6. Meetings of the creditors and committee of creditors;
  7. Invitation for resolution plans;
  8. Competition between the base resolution plan and the best resolution plan;
  9. Evaluation and consideration of resolution plans;
  10. Vesting management of corporate debtor with resolution professional;
  11. Termination of PPIRP.

29-Jan-2021: Insolvency and Bankruptcy Board of India organises a Workshop on “Committee of Creditors: An Institution of Public Trust”

The Insolvency and Bankruptcy Board of India (IBBI) jointly with the State Bank of India and the Indian Banks’ Association organised a one-day virtual workshop on “Committee of Creditors: An Institution of Public Trust” today. 

This is the fifth such workshop in the series for the benefit of financial creditors who comprise Committee of Creditors (CoC) under the Insolvency and Bankruptcy Code, 2016 (Code). Thirty-one senior officers (General Managers and Executive Directors) from fifteen scheduled commercial banks and financial institutions participated in the workshop.

Shri Rajesh Verma, Secretary, Ministry of Corporate Affairs delivered inaugural address. Shri M. Rajeshwar Rao, Deputy Governor, Reserve Bank of India delivered a key note address at the workshop. Shri Dinesh Kumar Khara, Chairman, State Bank of India delivered a special address on the occasion; Shri Sunil Mehta, Chief Executive, Indian Banks’ Association opened the inaugural session with his welcome remarks.

The illustrious faculty included; Shri C. S. Setty, Managing Director, State Bank of India; Shri Sanjeev Krishan, Chairman, PWC India; Shri Rashesh Shah, Chairman, Edelweiss Group, Shri Shardul Shroff, Managing Partner, Shardul Amarchand Mangaldas; and Dr. M. S. Sahoo, Chairperson, IBBI.

The workshop aimed at developing a better understanding of the role of and expectations from the CoC, under the Code and to build the capacity of financial creditors to ensure that the CoC:

  1. discharges its statutory duties and responsibilities with utmost care and diligence;
  2. has the capability and motivation to take business decisions in terms of generating multiple competing resolution plans and approving the best among them; and
  3. considers and balances the interest of all stakeholders in a resolution process.

6-Aug-2020: IBBI amends the Insolvency and Bankruptcy  Board of India (Liquidation Process) Regulations, 2016 

The Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency and Bankruptcy  Board of India (Liquidation Process) (Third Amendment) Regulations, 2020 today.

The Regulations require the committee of creditors to fix the fee payable to the liquidator.  Where the fee has not been fixed by the committee of creditors, the Regulations provide for a  fee as a percentage of the amount realised and of the amount distributed by the liquidator. There  have been instances where a liquidator realises the amount while another liquidator distributes  the same to stakeholders. The amendment made to the Regulations today clarifies that where a  liquidator realises any amount, but does not distribute the same, he shall be entitled to a fee  corresponding to the amount realised by him. Likewise, where a liquidator distributes any  amount, which is not realised by him, he shall be entitled to a fee corresponding to the amount  distributed by him.

The amended regulations are effective from today. These are available at www.mca.gov.in  and www.ibbi.gov.in.

30-Mar-2020: IBBI amends CIRP Regulations to provide relief in corporate insolvency resolution process due to COVID-19 outbreak

To address this difficulty faced by the lockdown due to COVID-19, the Insolvency and Bankruptcy Board of India (IBBI) amended the CIRP Regulations to provide that the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to the lockdown, in relation to a corporate insolvency resolution process. This would, however, be subject to the overall time-limit provided in the Code.

The IBBI amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) on 29th March 2020.

The Government of India has declared a lockdown of twenty-one days with effect from 25th March, 2020 as a measure to combat and contain the spread of COVID-19. It is difficult for the insolvency professionals to continue to conduct the process, for members of committee of creditors to attend the meetings, and for prospective resolution applicants to prepare and submit resolution plans, during the period of lockdown. Therefore, it may be difficult to complete various activities during a corporate insolvency resolution process within the timelines specified in the CIRP Regulations.

The amended regulations are effective from 29th March 2020. These are available at www.mca.gov.in and www.ibbi.gov.in.

6-Mar-2019: Insolvency and Bankruptcy Board of India signs a Cooperation Agreement with the International Finance Corporation

The Insolvency and Bankruptcy Board of India (IBBI) signed a Cooperation Agreement with the International Finance  Corporation(IFC), a member of the World Bank Group(WBG). The agreement was signed by Mr. K. R. Saji Kumar,  Executive Director, IBBI and Mr. Jun Zhang, Country Manager, IFC India.

The Insolvency and Bankruptcy Code, 2016  (Code) provides for reorganization and insolvency resolution of corporate  persons, partnership firms and individuals in a time bound manner for maximization of the value of assets of such  persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders and, for this  purpose, has established an institutional infrastructure comprising of Adjudicating Authorities, the IBBI, insolvency professionals, insolvency professional agencies and information utilities. The IBBI exercises regulatory oversight over the Insolvency Professionals, Insolvency Professional Agencies and Information Utilities. It writes and enforces rules for  processes, namely, corporate insolvency resolution, corporate liquidation, individual insolvency resolution and individual  bankruptcy under the Code.

The IBBI is interested in the effective implementation of the Code and its allied rules and regulations. The IFC is interested to assist the IBBI to further build the capacity of the insolvency professionals, and insolvency professional agencies for the purposes of the Code. The Cooperation Agreement envisages technical assistance upto 30th June, 2021  by the IFC to IBBI in this regard. It inter alia covers assistance in (a) Workshops and Training for Insolvency Professionals and Officers of the IBBI; (b)Train the Trainers for Workshops for Insolvency Professionals,  (c) Development of National Insolvency Programme, (d) Insolvency and valuation examinations.

10-Dec-2017: The Insolvency and Bankruptcy Board of India (IBBI) notifies Regulations for handling of Grievances and Complaints.

The Insolvency and Bankruptcy Board of India (IBBI) has notified the IBBI (Grievance and Complaint Handling Procedure) Regulations, 2017 in the Gazette of India on 7th December, 2017. The Regulations enable a Stakeholder, namely, debtor, creditor, claimant, service provider, resolution applicant or any other person having an interest in an insolvency resolution, liquidation, voluntary liquidation or bankruptcy transaction under the Insolvency and Bankruptcy Code, 2016 (Code), to file a grievance or a complaint against a Service provider, namely, insolvency professional agency, insolvency professional, insolvency professional entity or information utility. The Regulations provide for an objective and transparent procedure for disposal of grievances and complaints by the IBBI, that does not spare a mischievous service provider, but does not harass an innocent service provider.

A Stakeholder may file a grievance that shall state the details of the conduct of the service provider that has caused the suffering to the aggrieved; details of suffering, whether pecuniary or otherwise, the aggrieved has undergone; how the conduct of the service provider has caused the suffering of the aggrieved; details of his efforts to get the grievance redressed from the service provider; and how the grievance may be redressed.

A Stakeholder may file a complaint in the Specified Form along with a fee of Rupees Two Thousand and Five Hundred (Rs.2,500). A complaint needs to state the details of the alleged contravention of any provision of the Code, or rules, regulations, or guidelines made there under or circulars or directions issued by the IBBI by a Service provider or its associated persons; details of alleged conduct or activity of the Service provider or its associated persons, along with date and place of such conduct or activity, which contravenes the provision of the law; and details of evidence in support of alleged contravention. If the complaint is not frivolous or malicious, the fee will be refunded.

Where the IBBI is of the opinion that there exists a prima facie case, it may order an inspection under sub-regulation (3) of Regulation 3, order an investigation under sub-regulation (2) of Regulation 7 or issue a Show Cause Notice under sub-regulation (2) of Regulation 11 of the Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017, as may be warranted and the matter shall be proceeded accordingly.

The Regulations are effective from 7th December, 2017.

7-Nov-2017: Insolvency and Bankruptcy Board of India (IBBI) strengthens its Due Diligence Framework under the Insolvency and Bankruptcy Code, 2016

Insolvency and Bankruptcy Board of India (IBBI) has amended its Corporate Insolvency Resolution Process Regulations to ensure that as part of due diligence, prior to approval of a Resolution Plan, the antecedents, credit worthiness and credibility of a Resolution Applicant, including promoters, are taken into account by the Committee of Creditors.

With a view to ensure that the Corporate Insolvency Resolution Process results in a credible and viable Resolution Plan, the Insolvency and Bankruptcy Board of India (IBBI) has carried-out amendments to the IBBI (Insolvency Resolution Process for Corporate Persons) Resolution Process, 2016 (CIRP Regulations).

The Revised Regulations make it incumbent upon the Resolution Professional to ensure that the Resolution Plan presented to the Committee of Creditors contains relevant details to assess the credibility of the Resolution Applicants.  The details to be provided would include details with respect to the Resolution Applicant in terms of convictions, disqualifications, criminal proceedings, categorization as willful defaulter as per RBI guidelines, debarment imposed by SEBI, if any, and  transaction, if any, with the Corporate Debtor in the last two years.

Apart from the above, the Resolution Professional has to also submit details in respect of transactions observed or determined, if any, covered under Section 43 (Preferential Transactions); Section 45(Undervalued Transactions); Section 50 (Extortionate Credit Transactions); Section 66 (Fraudulent Transactions) under Insolvency and Bankruptcy Code, 2016. 

By virtue of the above mentioned changes in the Regulations, the Resolution Applicants, including promoters, are put to a stringent test with respect to their credit worthiness and credibility. Further, it also imposes greater responsibility on the Resolution Professionals and the Committee of Creditors in discharging their duties.

16-Jul-2017: IBBI notifies rules for bankruptcy probe

The Insolvency and Bankruptcy Board of India (IBBI) has powers to start probe against service providers registered with it without intimating them, according to new regulations.

IBBI, which is implementing the Insolvency and Bankruptcy Code (IBC), has notified the regulations for inspection and investigation of service providers registered with it.

Insolvency professional agencies, professionals, entities and information utility are considered as service providers under the Code. The Code, which provides for a market-determined and time-bound resolution of insolvency proceedings, became operational in December 2016.

As per the regulations, the investigation authority has to serve a notice intimating the entity concerned about the probe at least ten days in advance. However, the requirement could be done away with on grounds such as apprehensions that the records of the particular service provider might be destroyed before the probe starts.

6-March-2017: IBBI recognises two Insolvency Professional Entities (IPEs)

The Insolvency and Bankruptcy Board of India (IBBI) recognises two Insolvency Professional Entities (IPEs) under the Insolvency and Bankruptcy Code, 2016 (Code). The Code offers a market determined, time bound mechanism for orderly resolution of insolvency, wherever possible, and orderly exit, wherever required 

The Insolvency and Bankruptcy Board of India (IBBI) has recently recognised two Insolvency Professional Entities (IPEs), IRR Insolvency Professionals Private Limited & AAA Insolvency Professionals LLP.

A limited liability partnership, a registered partnership firm or a company may be recognised by the IBBI as an IPE if (a) a majority of the partners of the limited liability partnership or registered partnership firm are registered as insolvency professionals (IPs); or (b) a majority of the whole-time directors of the company are registered as insolvency professionals, as the case may be. An IPE is jointly and severally liable for all acts or omissions of its partners or directors as IPs committed during such partnership or directorship.

The Insolvency Professionals (IPs) are registered and regulated by the IBBI. They have a critical role in transactions under the Insolvency and Bankruptcy Code, 2016 (Code). The Code and regulations made there under provide for strengthening their capacity on a continuous basis. For example, the Insolvency Professional Agencies (IPAs) are obliged to promote continuous professional development of professional members enrolled with them. Similarly, the IPs have been enabled to engage other professionals as may be necessary and to use organisational resources of an IPE of which he is a partner or whole time director, as the case may be, for servicing the transactions.

The Insolvency and Bankruptcy Code, 2016 is considered as the biggest economic reform next only to GST. It offers a market determined, time bound mechanism for orderly resolution of insolvency, wherever possible, and orderly exit, wherever required. The Code envisages an ecosystem comprising National Company Law Appellate Tribunal (NCLAT), National Company Law Tribunal (NCLT), Debt Recovery Appellate Tribunal (DRAT), Debt Recovery Tribunal (DRT), Insolvency and Bankruptcy Board of India (Board), Information Utilities (IUs), Insolvency Professionals (IPs), Insolvency Professional Agencies (IPAs) and Insolvency Professional Entities (IPEs) for implementation of the Code. With concerted efforts of all concerned, there has been considerable progress in terms of putting in place some of the key elements of the ecosystem and also operationalisation of provisions relating to corporate insolvency resolution and liquidation. The debtors and creditors alike have commenced transactions under the Code.