The union cabinet has given ex-post facto approval to modifications carried out in the bill that replaced the Insolvency and Bankruptcy Code (Amendment) Bill 2017.
The union cabinet chaired by the Prime Minister Narendra Modi has given ex-post facto approval to the modifications carried out in the amendment bill, which replaced the Insolvency and Bankruptcy Code (Amendment) Bill 2017, and which has been passed by the Parliament as the Insolvency and Bankruptcy Code (Amendment) Act, 2018.
''The amendment will bring clarity and ensure that the prohibition of certain persons in the resolution process of an insolvent corporate person does not include unintended persons and the opportunity given to a person whose account is classified as non-performing asset is more equitable,'' an official release stated.
As per the amendments, the insolvency resolution professional will have to appoint two registered valuers to determine the fair value and the liquidation value of the corporate debtor. After receiving the resolution plans, the resolution professional will have to provide the fair value and the liquidation value to each member of the committee of creditors in electronic form, on receiving a confidentiality undertaking. The resolution professional and registered valuers will be required to maintain confidentiality of the fair value and the liquidation value.
The Resolution Professional will have to submit the information memorandum in electronic form to each member of the committee of creditors within two weeks of his appointment as resolution professional and to each prospective resolution applicant latest by the date of invitation of resolution plan, on receiving theeir confidentiality undertaking.
The Resolution Professional should issue an invitation, including the evaluation matrix, to the prospective resolution applicants. He may modify the invitation as well as the evaluation matrix. However, the prospective resolution applicant should get at least 30 days from the issue of invitation or modification thereof, whichever is later, to submit resolution plans.
Similarly, he will get at least 15 days from the issue of evaluation matrix or modification thereof, whichever is later, to submit resolution plans. An abridged invitation should be made available on the web site, if any, of the corporate debtor, and on the web site, if any, designated by the IBBI for the purpose.
While the Resolution Applicant would continue to specify the sources of funds that will be used to pay insolvency resolution process costs, liquidation value due to operational creditors and liquidation value due to dissenting financial creditors, the committee of creditors should specify the amounts payable from resources under the resolution plan for these purposes.
A Resolution Plan should provide for the measures, as may be necessary, for insolvency resolution of the corporate debtor for maximisation of value of its assets. These may include reduction in the amount payable to the creditors, extension of a maturity date or a change in interest rate or other terms of a debt due from the corporate debtor, change in portfolio of goods or services produced or rendered by the corporate debtor, and change in technology used by the corporate debtor.
The Resolution Professional should submit the resolution plan approved by the committee of creditors to the Adjudicating Authority, at least 15 days before the expiry of the maximum period permitted for the completion of the corporate insolvency resolution process.
The amendments have come into force from Wednesday on their publication in the Gazette of India. The amendments are available at www.mca.gov.in and www.ibbi.gov.in.