Creditor may assign/transfer debt during liquidation process under Bankruptcy Regulations

Creditor may assign/transfer debt during liquidation process under Bankruptcy. Liquidator may assign/transfer a not readily realisable asset.

INSOLVENCY AND BANKRUPTCY BOARD OF INDIA

NOTIFICATION

New Delhi, the 13th November, 2020

Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2020.

IBBI/2020-21/GN/REG067.—In exercise of the powers conferred by clause (t) of sub-section (1) of section 196 read with section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Insolvency and Bankruptcy Board of India hereby makes the following regulations further to amend the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, namely:—

1. (1) These Regulations may be called the Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2020.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, (hereinafter referred to as the principal regulations), after regulation 30, the following regulation shall be inserted, namely:—

“30A. Transfer of debt due to creditors.

(1) A creditor may assign or transfer the debt due to him or it to any other person during the liquidation process in accordance with the laws for the time being in force dealing with such assignment or transfer.

(2) Where any creditor assigns or transfers the debt due to him or it to any other person under sub-regulation (1), both parties shall provide to the liquidator the terms of such assignment or transfer and the identity of the assignee or transferee.

(3) The liquidator shall modify the list of stakeholders in accordance with the provisions of regulation 31.”

3. In the principal regulations, after regulation 37, the following regulation shall be inserted, namely:—

“37A. Assignment of not readily realisable assets.

(1) A liquidator may assign or transfer a not readily realisable asset through a transparent process, in consultation with the stakeholders’ consultation committee in accordance with regulation 31A, for a consideration to any person, who is eligible to submit a resolution plan for insolvency resolution of the corporate debtor.

Explanation.—For the purposes of this sub-regulation, ―not readily realisable asset” means any asset included in the liquidation estate which could not be sold through available options and includes contingent or disputed assets and assets underlying proceedings for preferential, undervalued, extortionate credit and fraudulent transactions referred to in sections 43 to 51 and section 66 of the Code.”.

4. In the principal regulations, in regulation 38, in sub-regulation (1), for the words ―cannot be readily or advantageously sold‖, the words ―could not be sold, assigned or transferred‖ shall be substituted.

Dr. M. S. SAHOO , Chairperson
[ADVT.-III/4/Exty./348/2020-21]

Note: The Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 were published vide notification No. IBBI/2016-17/GN/REG005 dated 15thDecember, 2016 in the Gazette of India, Extraordinary, Part III, Section 4, No. 460 on 15th December, 2016 and were last amended by the Insolvency and Bankruptcy Board of India (Liquidation Process) (Third Amendment) Regulations, 2020 vide notification No. IBBI/2020-21/GN/REG062, abcaus.in dated the 5th August, 2020 in the Gazette of India, Extraordinary, Part III, Section 4, No. 312 on 5thAugust, 2020.

• Prima facie satisfaction u/s 148 can not be a non-existing or incorrect information
• Mutual Funds to value physical Gold and Silver by using the polled spot prices
• SC allows simultaneous CIRP proceedings against principal debtor & corporate guarantor
• Merely because sales were declared for only one month, same cannot be treated as bogus
• ITAT deleted addition as method of accounting had been accepted in earlier years