STATUTORY UPDATES

Insolvency and Bankruptcy of India (Insolvency Resolution Process for Corporate Bodies) (Amendment) Regulations 2022

• Indian Insolvency and Bankruptcy Board (IBBI) in exercising the powers conferred under Article 196 read together with Article 240 of the Insolvency and Bankruptcy Code, 2016 introduced the following amendments to the IBBI (Insolvency Resolution Process of legal entities), 2016 (CIRP Regulation):
  • Under Regulation 18 (Committee meeting) of the CIRP Regulation, in addition to the existing regulation relating to the calling of a meeting of the creditors’ committee (CoC) on the occasion that the resolution professional (PR) as deemed necessary or at the request of CoC members having at least 30% of the voting rights, the PR has been given the power, by means of this amendment, to submit a proposal received from the members of the committee to a meeting , if deemed necessary. In addition to this, the PR must also place the proposal if it is made by committee members representing at least 33% of the votes.
  • Under CIRP Rule 39A, the PR or Interim Resolution Professional (IRP) was required to maintain electronic and physical records relating to the corporate insolvency resolution process (CIRP) of the Debtor Company; however, the current regulations did not provide a time limit for the retention of these records for a specified period. In order to clarify which records have the highest priority, the period for which these records must be retained, the amendment replaced the existing Rule 39A with the following:
    1. The IRP or PR, as the case may be, shall retain copies of all such records which are necessary to give a full account of the CIRP
    2. Without prejudice to the generality of the obligations referred to in sub-regulation (1), the IRP or the PR, as the case may be, must keep copies of the records relating to or forming the basis of:
       • Their appointment as IRP or RP, including the conditions of appointment
       • Delivery/taking over of the mission
       • Admission of the Corporate Debtor to the CIRP
       • Public announcement
       • Constitution of the committee and meetings of the committee
       • Claims, verification of claims and list of creditors
       • Engagement of Professionals, Registered Appraisers and Professional Insolvency Entity, including work performed, reports submitted by them
       • Information note
       • All documents filed with the contracting authority, appeal authority and their orders
       • Invitation, review and approval of the resolution plan
       • Statutory filings with the Commission and professional insolvency agencies
       • Correspondence during CIRP
       • Cost of the insolvency resolution process
       • Preferential, undervalued, exorbitant credit transactions or fraudulent or illicit transactions
    3. From the date of completion of the CIRP or the conclusion of any proceedings relating to the CIRP before the Board, the Adjudicating Authority, the Appeals Authority or any court, whichever is later, the IRP or the PR will retain:
       • Electronic copy of all records (physical and electronic) for a minimum period of eight years
       • A physical copy recordings for a minimum period of three years
    4. The IRP or PR must keep the records in a safe place and is required to produce such records as may be required under the IBC and the Regulations.

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