Summarized version of the Code

1. Insolvency & Bankruptcy Code
- CS Kinnar Shah
CS Kinnar Shah

2.  Introduction & Objectives
 Applicability
 Adjudicating Authority
 Application by Creditors
 Time limit & Moratorium Period Provisions
 Public Announcement
 Interim Resolution Professional
 Committee of Creditors
 Resolution Plan
 Insolvency Process
CS Kinnar Shah

3. CS Kinnar Shah
Presidency
Towns Insolvency
Act, 1909
Provincial
Insolvency
Act, 1920
Sick Industrial
Companies Act,
1985
Recovery of Debts
Due to Bank and
Financial
Institution, 1993
Securitisation and
Reconstruction of
Financial Assets
and Enforcement
of Securities
Interest Act, 2002
Companies Act,
2013
IBC, 2016
Insolvency & Bankruptcy Code

4. CS Kinnar Shah
Road To Code
21.12.2015- IBC Bill of 2015 -introduced in
LS
23.12.2015 - IBC Bill of 2015 - Referred to
Joint Committee of both Houses of Parliament
28.04.2016- IBC Bill of 2015 -Joint Committee
placed its Report to both Houses of Parliament
05.05.2016- IBC Bill of 2015 -passed by LS
11.05.2016- IBC Bill of 2015 -passed by RS
28.05.2016- IBC, 2016 -Assented by
President of India & Notified

5. Objectives
To promote entrepreneurship, availability of credit, and balance the
interests of all stakeholders by consolidating and amending the laws
relating to reorganization and insolvency
Shifting from the existing ‘Debtor in possession’ to a ‘Creditor in control’
regime.
Consolidating all existing insolvency related laws as well as amending
multiple legislation including the Companies Act
Resolve Insolvencies In A Strict Time-bound Manner – the evaluation and
viability determination must be completed within 180 days-regime
Insolvency professional to take over the management of the Company
CS Kinnar Shah

6. Applicability
Any Company incorporated under the Companies Act,
2013 or under any provisions
Any other Company governed by any Special Act
Any LLP incorporated under the LLP Act, 2008
Any other body, as notified by the Central Government
Partnership Firms
Individuals
CS Kinnar Shah

7. CS Kinnar Shah
WHO CAN INVOKE
Corporate Debtor
- A corporate person who owes a debt to any person
Operational Creditor
- A person to whom an operational debt is owed &
- Includes any person to whom such debt legally assigned or transferred
Financial Creditor
- Any person to whom a financial debt is owed &
- Includes a person to whom such debt legally assigned or transferred

8. Application by Creditors
Default by
Corporate
Debtor
Financial
Creditors
Application to Adj. Authority
along with evidence of
Record & name of Interim
Res. Professional
Operational
Creditors
Deliver Demand
Notice with records
& Invoices
Debtor Within 10
days repay debt or go
for arbitration,
If Debtor will not do anything then Op. Creditor
will file Application to Adj. Authority
CS Kinnar Shah

9. • NCLT
- Deal with insolvency matters of Co. & LLP
- Appeal to NCLAT
• Debt Recovery Tribunal
- Deal with insolvency matters of individual & Partnership firm
- Appeal as to DRAT
Adjudicating Authority within 14 days of receipt of application, by an order -
Admit the application Reject the application
If it is complete If it is
incomplete
Adjudicating Authority shall before rejecting application, give notice to
applicant to rectify defects in application within 7 days from the date of
receipt of such notice
Default
occurred
Default not
occurred
CS Kinnar Shah

10. Invoking Provisions of Code
DEFAULT
Minimum amount of 1 lakh up to 1 Cr as specified by CG
Where any Company or LLP commits-
A default in paying its
Financial debt Operational debt
Then a financial creditor/ operational creditor/ Company & LLP itself May
file an application, for initiating corporate insolvency resolution process
with the Adjudicating Authority.
CS Kinnar Shah

11. Following Person can’t initiateInsolvencyResolution Process:-
 Corporate Debtor undergoing a Corporate Insolvency
Resolution Process
 Corporate Debtor completed Corporate Insolvency
Process 12 months Preceding the date of making
application
 Corporate Debtor or Financial Creditor violated term
of Resolution Plan approved 12 months before date of
application made
 Already Liquidation Order made against Corporate
Debtor
CS Kinnar Shah

12. Time Limit
Process
completed
within180 days
Extension of
Maximum
90 days if 75%
voted in committee
of creditors
Note:- For Extension Application to be done once only
Declare a
Moratorium
Cause a Public
Announcement
Appoint Interim
Resolution Professional
Adjudicating Authority after admission of application shall, by an order
CS Kinnar Shah

13. Moratorium Period
In MoratoriumPeriodProhibition Following:-
(a) Institution/Continuation of Pending Proceeding, Judgement, decree, order of
court/tribunals/any authorities
(b) Transfer/encumbrance/disposal of assets/legal eights/beneficial interest
(c) Recover/enforce any security interest created by Corporate Debtor in respect of
properties
(d) Supply of goods/services by Corporate Debtor
(e) Recovery of any property by owner or lessor where such property is occupied
Note(1):- Moratorium order effective from order till the conclusion of Insolvency
Resolution Process.
Note (2):- Moratorium Period shall cease from the date of order of Approval of
Resolution Plan or Liquidation
CS Kinnar Shah

14. Public Announcement
Publicannouncementcontainfollowinginformation:
(a) Name & address of defaulted Corp. Debtor
(b) Name of Registrar with which Corp. Debtor is
incorporated or registered
(c) Last date for submission of Claims
(d)Details of Interim Resolution Professional
- Management of Corporate Debtors
- Responsible for Receiving claims
(e)Penalties for False or Misleading Claims
(f) Date on which the Insolvency Resolution Process close (i.e.
180 days from the date of admission of application)
CS Kinnar Shah

15. Interim Resolution Professional
Appointment by Adjudicating Authority within 14 days from
Admission of Application, Tenure of Appointment Shall not
exceed 30 days from date of Appointment.
Note:- Adjudicating Authority may take recommendation form
IBBI,IBBI shall recommend name of Professional within 10 days
form application from Adjudicating Authority.
OnceInterimResolutionProfessionalAppointed(IRP)then:
Management
of affairs of
Corp. Debtor
shall vest
with IRP
Powers of BOD/
Partners (LLP) shall
stand suspended &
will be exercised by
IRP
Officers &
Managers of
Corp. Debtor
shall report
to IRP
Fin. Inst.
maintaining
accounts of Corp.
Debtor shall
follow instructions
of IRP
CS Kinnar Shah

16. Committee of Creditors
 Interim Resolution Professional shall after collation of all claims
received against the corporate debtor and determination
of the financial position of the corporate debtor, constitute a committee of
creditors.
 Committee of Creditors constituted by Financial Creditors. If no Financial
Creditors then committee constituted by IBBI.
 Within 7 days from Constitution meeting of Committee will be arranged, in
which Interim Resolution Professional continued as Resolution Professional or
new Resolution Professional will be appointed. Such Decision shall be taken by
75% of vote in the meeting.
Forappointmentof newResolutionProfessional:-
Application
before
Adjudicating
Authority
Adjudicating
Authority will
take
recommendation
from IBBI
IBBI will confirm
the name within
10 days form
application
CS Kinnar Shah

17. Committee of Creditors
Positionof FinancialCreditorwhen he is an OperationalCreditor:
 shall be considered Financial Creditor to the extent of Financial Debts;
 Voting Shares to the extent of Financial Debts;
 Operational Creditor to the extent of Operational Debt
Assignment of OperationalDebt:-
 If an Operational Creditor has assigned or legally transferred any Operational
Debt to a Financial Creditor, the Assignee or Transferee shall be considered as
an Operational Creditor to the extent of such assignment or legal transfer.
 Determination of Voting Share by Financial Creditor
 IBC Board may specify the manner of determining of voting share.
CS Kinnar Shah

18. Role of IRP with approval of Committee of Creditors (COC)
IRPwilldo thefollowingwithapprovalof COC:
 Raise any interim finance excess the amount decided
 Create security over assets of the debtor
 Change capital structure of Debtor
 Make change in Appointment/term of Statutory/internal Auditor
 Transfer of Right other than Ordinary Course of Business
 delegate its authority to any other person
 dispose of or permit the disposal of shares of any shareholder of the
corporate debtor or their nominees to third parties
 make any change in the management of the corporate debtor or its
subsidiary
CS Kinnar Shah

19. Resolution Plan
Preparation
of
Information
Memorandum
Resolution
Applicant
access to all
relevant
information
Resolution
Plan to the
Resolution
Professional
Examination of
Resolution Plan
Resolution Plan
to CoC for
Approval
Resolution Plan
Adjudicating
Authority
Adjudicating
Authority
approve plan
Plan binding on
Corp. Debtor
Adjudicating
Authority not
approve plan
Pass Liquidation
order
Resolution
Professional work
as a liquidator
CS Kinnar Shah

20. Insolvency Process
Commitment
of Default
Application to
Adjudicating
Authority
Appoint Interim
Resolution
Professional
Form Committee
of Creditors
Appoint
Resolution
Professional
(RP) by COC
RP prepare
Info.
Memorandum
with Res Plan
Res. Plan
approved by
COC
Plan approved
by Adjudicating
Authority
Adjudicating
Authority NOT
approve plan
Pass Liquidation
order
Resolution
Professional work
as a liquidator
CS Kinnar Shah

21. Thank You
CS Kinnar Shah