June 15, 2022
Summary of the notifications issued by IBBI on 14/06/2022
IBBI amends procedure for issuing of Record of Default under Information Utilities regulations.
IBBI now requires the creditor to file the information of default with the information utility, prior to filing a CIRP application, so that the information utility shall process the information for issuing the record of default in Form D (as prescribed in the notification). Further, if the list of financial creditors comprises of the banks belonging to the second schedule of the Reserve Bank of India Act, 1934, then the authentication status shall be marked as RED if the Debtor confirms the information of default or it doesn’t respond even after three reminders.
Also, any document containing the latest acknowledgment of debt by the debtor will be considered by the Information Utility as a valid proof of debt.
IBBI notifies stringent timelines for disposal of grievance and complaints by the Board/IPA
A stakeholder shall now file their grievance or complaint with the Board on its dedicated portal (www.ibbi.gov.in), as opposed to the existing facility to email/courier/hand deliver the complaint.
The aggrieved/complainant and the service provider shall submit the additional information sought by the Board within 7 days (as against 15 days).
IBBI has also provided for stringent timelines wherein it now requires the grievance closure/prima facie analysis (in case of a complaint) by the Board and redressal, if any, required to be carried out by the service provider, to be completed within 30 days (as against 45 days). If the complainant is not satisfied with the decision of the Board, he may request a review of such decision within 30 days.
If the grievance is against an Insolvency Professional (IP), then the Board may forward such grievance to the Insolvency Professional Agency (IPA) of which he is a member and the IPA shall dispose of this and intimate the Board within 30 days from the receipt of the grievance.
IBBI amends CIRP regulations
Key highlights of the amendment are as follows:
1. Record of debt/transaction/default by operational creditor (OC): OC shall, along with the application initiating CIRP, furnish copies of relevant extracts of Form GSTR-1 and Form GSTR-3B filed under GST laws and the copy of e-way bill, if applicable. This applies to only those OCs who are required to register under GST.
2. Financial and Operational Creditors to furnish their PAN and email-ID when CIRP application is filed.
3. Any person or promoter of the Corporate Debtor (CD) and the Creditor shall furnish the necessary information, in such format and time, as sought by the Interim Resolution Professional (IRP) or RP, to assist him with the preparation of Information Memorandum (IM), ascertainment of value etc.
4. A third valuer for an asset class may be appointed when the proposal for such an appointment is received from committee of creditors (CoC); existing provision allows such appointment when the RP opines that the difference between the values arrived at by the two valuers is significantly different. Further, the term ‘significantly different’ is now quantified where the difference between two values is >= 25%.
5. The creditors shall provide RP/IRP with the relevant extracts of the stock audits, forensic audits etc. and also the latest financial statements of the CD to assist him with determination of preferential or other transactions as per Regulation 35A and with preparation of IM.
6. The Resolution Plan shall provide for the manner in which proceedings in respect of avoidance transactions, fraudulent or wrongful trading under the Code, 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. This shall not be applicable for resolution plans submitted to Adjudicating Authority on or before 14th June, 2022.
IBBI amends Inspection and Investigation regulations.
Key highlights of the amendment are as follows:
1. Processing of a complaint or grievance or material available on record under the Grievance and Complaint Handling Procedure Regulations, 2017, shall mean investigation under this regulation and in such case the processing papers shall mean the investigation report under regulation 10. Further, the Board shall have powers to appoint an inspecting/ investigating authority in this regard.
2. If the Board is satisfied, based on the material available on records, that there is a prima facie violation of the provisions of the Code or its Rules/Regulations by the service provider, then the Board shall refer the matter to the Disciplinary Committee for an appropriate action. The Disciplinary Committee may pass an interim order with appropriate directions, which shall lapse on expiry of 90 days from the date of order.
3. The Show Cause Notice (SCN) shall be served in electronic form via email, with a copy sent through Registered post and it shall prescribe the manner in which the service provider shall respond and consequences of failing to respond to the notice. Further, notice shall provide at least 15 days (as against 21 days) to the noticee to make a written submission.
4. The Disciplinary Committee shall endeavour to dispose of the show-cause notice within a period of 35 days (as opposed to 180 days) of the date of the issuance of the SCN. The order thus passed shall be served upon the service provider in electronic form and if applicable, shall be sent to the IPA, of which he is a member. Where the service provider is an IP, the Board shall also intimate the order to all the members of CoC of the insolvency resolution processes in which he is acting as an IRP/RP, as the case may be, and to the Adjudicating Authority.