Insolvency and Bankruptcy Board of India Regulations, 2016 and Insolvency and Bankruptcy Board of India Regulations, 2017 Amendments:

GS Paper 3

Syllabus: Indian economy and issues related to planning, mobilization of resources development and growth, banking reforms etc

Directions: The amendments are highly technical in nature. No need to note or remember. Go through it once. Understand the basics of IBC. Know the difference between basic terms such as liquidation, bankruptcy etc.

Source: PIB

Context:

• The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2022 and Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Second Amendment) Regulations, 2022.

Objective:

• To enable better participation of stakeholders
• Streamline the liquidation process to reduce delays
• Realize better value

Key Amendments:

• The Committee of Creditors (CoC): It shall function as the Stakeholders Consultation Committee (SCC) in the first 60 days.
  • After adjudication of claims and within 60 days of initiation of the process, the SCC shall be reconstituted based upon admitted claims.
• Mandatory meeting: The liquidator has been mandated to conduct the meetings of SCC in a structured and time-bound manner.
• Scope of mandatory consultation by the liquidator, with SCC, enlarged: Now, SCC may even propose the replacement of the liquidator to the Adjudicating Authority (AA) and fix the fees of the liquidator, if the CoC did not fix the same during CIRP.
• Claim not filed during the liquidation process: The amount of claim collated during CIRP shall be verified by the liquidator.
• Process of compromise: If CoC decides the process of compromise or arrangement during the liquidation process
  • The liquidator shall file the application in such cases before the Adjudicating Authority within thirty days of the order of liquidation.
• Specific event-based timelines: Stipulated for the auction process.
• Advisory role by SCC before filing an application(dissolution or closure): The manner in which proceedings in respect of avoidance transactions or fraudulent or wrongful trading, shall be pursued after the closure of liquidation proceedings.
• Manner and period of retention: of records: Relating to liquidation and voluntary liquidation of a corporate debtor or corporate person, respectively.

Insta Links:

Insolvency and Bankruptcy Code

Mains Links:

Q. Public expenditure management is a challenge to the Government of India in the context of budget making during the post-liberalization period. Clarify it. (UPSC 2019)

Prelims Links:

• IBC
• IBBI
• COC
• SCC