Sr. No.

REGULATION

SUBJECT

PREVIOUS AMENDMENT

NEW AMENDMENT

OVERVIEW

1.

Reg. 2D

Details of debt, default and limitation in respect of applications under Section 7 or Section 9 of IBC.

New Insertion

While filing an application under section 7 or 9, the financial creditor or the operational creditor, as the case may be, shall also submit along with evidence, chronology of the debt and default including the date when the debt became due, date of default, dates of part payments, if any, date of last acknowledgment of debt and the limitation applicable.]

The addition has been made to facilitate NCLT benches in promptly deciding on applications filed under Section 7 or 9. This is achieved by consolidating essential information necessary for the admission or rejection of such applications in a chronological order at a single location. The intention is to provide NCLT Benches with a streamlined and easily accessible reference point for the efficient processing of these applications within a specified timeframe.

2.

Reg. 3A

Assistance and cooperation by the personnel of the corporate debtor.

New Insertion

Assistance and cooperation by the personnel of the corporate debtor.

(1) The interim resolution professional or resolution professional, as the case may be, shall take custody and control as specified under this regulation from the personnel of the corporate debtor, its promoters or any other person associated with the management of the corporate debtor as the case may be, of the following:-

(a)      the records of information relating to the assets, finances and operations of the corporate debtor referred in clause (a) of section 18 and such other information required under regulation 36;

(b)     the assets recorded in the balance sheet of the corporate debtor or in any other records referred in clause (f) of section 18.

The amendment primarily addresses the need for assistance and collaboration from the personnel of the corporate debtor. It introduces a requirement for the corporate debtor personnel to provide a comprehensive list of assets, financial details, and operational information to the Insolvency Resolution Professional (herein after referred to as “Resolution Professional”).                 The amendment places increased responsibility on the resolution professionals, mandating not only the takeover of corporate debtor assets but also the verification and reconciliation of the asset list with the corporate debtor's financial records. Any discrepancies are to be reported when making an application under Section 19(2), especially if they do not align with the assets disclosed in the financials of the corporate debtor. It's important to note that this amendment does not exempt promoters from their obligations to cooperate with the resolution professionals, emphasizing that their liabilities persist despite these changes.

3.

Reg. 10

Authorised Representative

New Insertion

The authorised representative shall: �"

(a) assist the creditors in a class he represents in understanding the discussions and considerations of the committee meetings and facilitate informed decision-making.

(b) review the contents of minutes prepared by the resolution professional and provide his comments to the resolution professional, if any;

(c) help the creditors in a class he represents during the consultations made by the resolution professional to prepare a strategy for marketing of the assets of the corporate debtor in terms of sub-regulation (1) of regulation 36C;

(d) work in collaboration with the creditors in a class he represents to enhance the marketability of the assets of the corporate debtor in terms of sub-regulation (3) of regulation 36C;

(e) assist the creditors in a class he represents in evaluating the resolution plans submitted by resolution applicants;

(f) ensure that the creditors in a class he represents have access to any information or documents required to form an opinion on issues discussed in the committee meetings;

(g) update regularly the creditors in a class he represents on the progress of the corporate insolvency resolution process;

(h) make suggestions for modifications of the resolution plan as may be required by the creditors in class he represents;

(i) record proceedings and prepare the minutes of the meeting with the creditors in a class he represents; and

(j) act as a representative for the creditors in a class he represents in representations before the Adjudicating Authority, National Company Law Appellate Tribunal, and other regulatory authorities

The amendment entails an expansion of the roles and responsibilities assigned to Authorized Representatives. The specific details of these augmented duties would need to be reviewed in the context of the amendment itself, but in general, enhancements in roles and responsibilities suggest a broader scope of tasks and expectations for Authorized Representatives in the insolvency resolution process. These modifications likely reflect a desire to strengthen the contribution and effectiveness of Authorized Representatives in representing the interests of stakeholders during insolvency proceedings.

4.

Reg. 12(1)

Submission of Proof of Claim

A creditor shall submit a claim with proof on or before the last date mentioned in the public announcement

A creditor shall submit a claim with proof on or before the last date mentioned in the public announcement.

Provided that a creditor, who fails to submit claim with proof within the time stipulated in the public announcement, may submit his claim with proof to the interim resolution professional or the resolution professional, as the case may be, up to the date of issue of request for resolution plans (“RFRP”) under regulation 36B or ninety days from the Insolvency Commencement Date , whichever is later: Provided further that the creditor shall provide reasons for delay in submitting the claim beyond the period of ninety days from the insolvency commencement date

The amendment to the provision provides creditors with some flexibility and relief in submitting claims even after the initial 90 days from the Insolvency Commencement Date  until the issuance of the Request for Resolution Plans (“RFRP”) on T+105 days. The extension allows creditors an additional 15 days to submit their claims if they were unable to meet the initial timeline stipulated in the public announcement.

Crucially, this extension is contingent upon creditors providing reasons for the delay in submitting their claims. By incorporating this flexibility, the amendment acknowledges that circumstances may arise, leading to delays in claim submissions, and it allows creditors an opportunity to present justifications for any such delays. This provision strikes a balance between maintaining the efficiency of the insolvency resolution process and recognizing the practical challenges that creditors may face in adhering to the initially specified timelines.

5.

Reg. 12(2)

Time-limit for completion of insolvency resolution process.

Provided that a creditor, who fails to submit claim with proof within the time stipulated in the public announcement, may submit his claim with proof to the interim resolution professional or the resolution professional, as the case may be, on or before the nineteenth day of the insolvency commencement date.

Omitted

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6.

Reg. 13 (1A),

Reg. 13 (1B),

Reg. 13 (1C)

Verification of Claims

New Insertion

(1A) Where the interim resolution professional or the resolution professional, as the case may be, does not collate the claim after verification, he shall provide reasons for the same.

(1B) In the event that claims are received after the period specified under sub-regulation (1) of regulation 12 and up to seven days before the date of meeting of creditors for voting on the resolution plan or the initiation of liquidation, as the case may be, the interim resolution professional or resolution professional, as the case may be, shall verify all such claims and categorise them as acceptable or non-acceptable for collation.

(1C) The interim resolution professional or resolution professional, as the case may be, shall:- (a) intimate the creditor within seven days of categorisation thereof under sub-regulation (1B) and provide reasons where such claim has been categorised as non-acceptable for collation; and (b) put up the claims categorised as acceptable under sub-regulation (1B) and collated by him to:- (i) the committee in its next meeting for its recommendation for inclusion in the list of creditors and its treatment in the resolution plan, if any; and (ii) submit such claims before the Adjudicating Authority for condonation of delay and adjudication wherever applicable.

In the context of delayed claims submitted by creditors, the recent amendment extends the requirement to Corporate Insolvency Resolution Process situations.

Now, in Corporate Insolvency Resolution Process cases, the Resolution Professional  is tasked with gathering such delayed claims, categorizing them as either acceptable or non-acceptable. Subsequently, the resolution professionals must present these claims to the Committee of Creditors in the upcoming meeting for recommendations and inclusion in the list of creditors. Additionally, a new provision introduces the need for seeking condonation of delay through the appellate authority.

This addition places an added burden on the resolution professionals, who now need to file applications on behalf of creditors aiming to submit their claims as of the date when the plan is under consideration. Moreover, the introduction of condonation of delay through appellate authority introduces a potential avenue for further legal disputes. Considering the existing congestion in the NCLTs , the anticipated influx of applications for condonation of delay in filing claims may lead to a slowdown in the overall process of finalizing resolution plans.

7.

Reg. 16A(3A),

Reg. 16A(3B),

Reg. 16A(3C)

Authorised Representative

New Insertion

(3A) The financial creditors in the class, representing not less than ten per cent. voting share may seek replacement of the authorised representative with an insolvency professional of their choice by making a request to the interim resolution professional or resolution professional who shall circulate such request to the creditors in that class and announce a voting window open for at least twenty-four hours.

(3B) Subject to clauses (a) and (b) of sub-regulation (2) of regulation 4A, the interim resolution professional or resolution professional, as the case may be, shall offer choice of at least three insolvency professionals to the financial creditors in the class including such insolvency professional(s) proposed under sub-regulation (3A) along with the existing authorised representative.

(3C) The resolution professional shall apply to the Adjudicating Authority for appointment of the authorised representative who receives the highest percentage of voting share of financial creditors in that class.

Currently, there is no explicit provision for the replacement of an authorised representative  after their appointment by the appellate authority. The newly introduced provision addresses this gap, enabling creditors to request the appointment of an alternative Authorized Representative. This empowers creditors to choose a representative who can address their concerns, handle their issues, and advocate for their interests during insolvency proceedings.

8.

Reg. 16A(8)

Authorised Representative

The authorised representative of creditors in a class shall be entitled to receive fee for every meeting of the committee attended by him in the following manner, namely: Number of creditors in the class Fee per meeting of the committee (Rs.) 10-100 15,000 101-1000 20,000 More than 1000 25,000

(a) The authorised representative of creditors in a class shall be entitled to receive fee for every meeting of the committee attended by him in the following manner, namely:

(b) The authorised representative shall be entitled to receive fee for every meeting of the class of creditors convened by him in the following manner, namely: �"

Number of creditors in the

(c) The payment of fee to authorised representative shall be part of insolvency resolution process cost in respect of two meetings with the creditors he represents corresponding to a meeting of the committee of creditors.

(d) The fee for any additional meeting beyond two meetings corresponding to a meeting of the committee of creditors shall be part of the insolvency resolution process subject to approval of the committee of creditors.

The amendment introduces a revision in the compensation structure for Authorized Representatives. According to the changes, the fees for Authorized Representatives up to two meetings of the Committee of Creditors  will be included as part of the Insolvency resolution professional's (IRP) cost. However, for any additional meetings beyond the initial two, the determination of fees will be subject to the decision of the Committee of Creditors. This adjustment provides clarity on the compensation framework for Authorized Representatives and allows flexibility for further compensation decisions based on the number of meetings conducted.

9.

Reg. 28(1)

Transfer of debt due to creditors.

In the event a creditor assigns or transfers the debt due to such creditor to any other person during the insolvency resolution process period, both parties shall provide the interim resolution professional or the resolution professional, as the case may be, the terms of such assignment or transfer and the identity of the assignee or transferee.

In the event a creditor assigns or transfers the debt due to such creditor to any other person during the insolvency resolution process period, both parties shall, within seven days of such assignment or transfer, provide the interim resolution professional or the resolution professional, as the case may be, the terms of such assignment or transfer and the identity of the assignee or transferee.

As per this amendment, a new provision has been introduced specifying a timeline of 7 days for the disclosure of details in the case of the assignment or transfer of debts. This means that both the transferor and the transferee involved in the assignment or transfer of debts are required to provide relevant details within a period of 7 days. This timeframe is established to ensure a prompt and transparent communication of information related to the transfer or assignment of debts in the context of the insolvency resolution process.

10.

Reg. 30(B)

Audit of  Corporate Debtor

New Insertion

(1) Any member(s) of the committee may propose an audit of the corporate debtor along with the objectives, scope, estimate of the costs, timeframe and name(s) of the proposed auditor(s).

(2) A proposal made under sub-regulation (1) shall be considered as per sub-regulation (3) of regulation 18 and an audit shall be conducted if such proposal is approved by the committee.

(3) The audit shall be conducted by an insolvency professional having qualifications required for such audit.

(4) The auditor shall prepare a report detailing his findings and the same shall be presented before the committee along with the comments of the interim resolution professional or the resolution professional, as the case may be.

(5) The expenses of such audit shall be treated as insolvency resolution process costs.

A new provision has been introduced to mandate the audit of the corporate debtor with the aim of enhancing the efficiency and transparency of the Corporate Insolvency Resolution Process.

This requirement is characterized as a form of forensic audit, indicating a thorough examination of the financial affairs and transactions of the corporate debtor. The audit is specifically designated to be conducted by an Insolvency Professional with the necessary qualifications to carry out such forensic audits. This addition underscores the importance of a detailed and specialized examination of the financial aspects of the corporate debtor during the insolvency resolution process.

11.

Reg. 36B (1)

Request of Resolution Plan

The resolution professional shall issue the information memorandum, evaluation matrix and a request for resolution plans, within five days of the date of issue of the provisional list under sub-regulation (10) of regulation 36A to "

(a) every prospective resolution applicant in the provisional list; and

(b) every prospective resolution applicant who has contested the decision of the resolution professional against its non-inclusion in the provisional list.

The resolution professional shall, within five days of the date of issue of the final list under sub-regulation (12) of regulation 36A, issue the information memorandum, evaluation matrix and a request for resolution plans to every resolution applicant in the final list:

Provided that where such documents are available, the same may also be provided to every prospective resolution applicant in the provisional list.

In accordance with this amendment, the resolution professional is now obligated to issue the information memorandum, evaluation matrix, and a RFRP to every resolution applicant within 5 days of preparing the final list of prospective resolution applicants. This provision sets a specific timeline for the dissemination of key documents to potential resolution applicants, aiming to streamline the process and ensure that all relevant parties receive the necessary information promptly after the final list is prepared. The intention is likely to facilitate a more efficient and transparent resolution process by providing timely and consistent communication to all involved parties.

12.

Reg. 40A (table row relating to Regulation 36B)

Model time-line for corporate insolvency resolution process

Issue of RFRP, including Evaluation Matrix and information memorandum Within 5 days of the issue of the provisional list T+105 Receipt of Resolution Plans At least 30 days from issue of RFRP (Assume 3O days) T+135

 Issue of RFRP, including Evaluation Matrix and information memorandum Within 5 days of the issue of the final list T+105 Receipt of Resolution Plans At least 30 days from issue of RFRP (Assume 30 days) T+135

As per this amendment, the resolution professional is now mandated to provide the information memorandum, evaluation matrix, and a RFRP to each resolution applicant within 5 days of preparing the final list of prospective resolution applicants. This amendment introduces specific timeframe for the distribution of crucial documents to potential resolution applicants. The goal is likely to ensure a more organized and time-sensitive process, allowing all involved parties to access essential information promptly after the final list has been compiled. This requirement enhances transparency and efficiency in the resolution process.

13.

Reg. 40B (1A)

Filing of forms

Information memorandum is not issued within 92 days from the date of public announcement Date specified in column (2) + 3 days X+30th day, X+60th day, X+90th day and so on, till the activity is completed. Request for Resolution Plans is not issued within 10 days from the date of issue of information memorandum to the committee.

The amendment provides certain timeframes and conditions related to the issuance of an information memorandum and the      RFRP in the context of insolvency proceedings. Let's break down the explanation based on the information provided:

1. information memorandum Issuance Timeline:

(a) If the information memorandum is not issued within 92 days from the date of the public announcement (as specified in column (2)), plus 3 days after the public announcement date, then certain actions are triggered.

(b) These actions occur on the 30th day, 60th day, 90th day, and so on, until the relevant activity is completed.

2. Request for RFRP Issuance Timeline:

(a) If the RFRP is not issued within 10 days from the date of issuing the information memorandum to the committee, then specific consequences or actions are likely to follow.

In simpler terms, these provisions establish timeframes for key steps in the insolvency resolution process:

(b) The information memorandum must be issued within a specified period (92 days from the public announcement date, plus 3 days).

(c) Certain actions or consequences are triggered if this timeframe is not met and continue at specified intervals (30th day, 60th day, 90th day, etc.).

(d) Additionally, there is a requirement for the RFRP to be issued within 10 days from the date of providing the information memorandum to the committee. Failure to meet this deadline may lead to specified actions or outcomes in the resolution process.