IBBI (Liquidation Process) (Amendment) Regulations 2020
The Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2020 on 6th January 2020.
The amendment clarifies that a person, who is not eligible under the Code to submit a resolution plan for insolvency resolution of the corporate debtor, shall not be a party in any manner to a compromise or arrangement of the corporate debtor under section 230 of the Companies Act, 2013. It also clarifies that a secured creditor cannot sell or transfer an asset, which is subject to security interest, to any person, who is not eligible under the Code to submit a resolution plan for insolvency resolution of the corporate debtor.
The amendment provides that a secured creditor, who proceeds to realise its security interest, shall contribute its share of the insolvency resolution process cost, liquidation process cost and workmen’s dues, within 90 days of the liquidation commencement date. It shall also pay excess of realised value of the asset, which is subject to security interest, over the amount of its claims admitted, within 180 days of the liquidation commencement date. Where the secured creditor fails to pay such amounts to the Liquidator within 90 days or 180 days, as the case may be, the asset shall become part of Liquidation Estate.
The amendment provides that a Liquidator shall deposit the amount of unclaimed dividends, if any, and undistributed proceeds, if any, in a liquidation process along with any income earned thereon into the Corporate Liquidation Account before he submits an application for dissolution of the corporate debtor. It also provides a process for a stakeholder to seek withdrawal from the Corporate Liquidation Account.
The amended regulations are effective from 6th January 2020.
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INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
New Delhi, the 14th February, 2020
No. IBBI/2019-20/GN/REG055(1).—In the notification of the Insolvency and Bankruptcy Board of India published vide No. IBBI/2019-20/GN/REG055 dated 12th February, 2020, in the Gazette of India, Extraordinary, Part III, Section 4, No. 58 dated 12th February, 2020, in serial number 2, for the Example, read:
“Example: A Form is required to be filed by 29th April, 2020. It shall be filed along with fee as under:
|If filed on||Fee (in Rupees)|
|28th April, 2020||0|
|29th April, 2020||0|
|30th April, 2020||500|
|Any day in May, 2020||1000|
|Any day in June, 2020||1500″|
Dr. NAVRANG SAINI, Whole Time Member
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