Background
In our previous publication on the subject, we had discussed the changes introduced by the Ordinance dated 23 November 2017 (the Ordinance), amending the Insolvency and Bankruptcy Code, 2016 (Code) (see our Ergo Newsflash dated 24 November 2017).
Companies undergoing corporate insolvency resolution process tend to be in dire need of funds to meet their working capital expenses. Interim finance can be an important tool for effective reorganization so as to prevent liquidation.
Background |
The Insolvency and Bankruptcy Board of India has amended the Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 with effect from February 7, 2018, and has brought into force the Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2018[1]. The salient features of the new regulations have been discussed hereunder.
Appointment of registered valuers
Enforced with the objective of time-bound insolvency resolution and maximization of assets, the Insolvency Bankruptcy Code, 2016 (hereinafter referred to as “IBC”), in order to facilitate the process of insolvency resolution, has provision for appointment of an insolvency resolution professional (hereinafter referred to as “IRP”).
It is known that I & B Code came into effect from 01.12.2016. Subsequently, it perspired during various proceedings in NCLT that it has no specific provision for limitation period and/or categorical applicability of Limitation Act on initiation of insolvency process under the Act.
However, the limitation period is prescribed under the Limitation Act for every suit instituted, appeal preferred, and application made under the law.
As per Section 5(14) of the IB Code "Insolvency Resolution Process Period" is 180 days.
“Period of one hundred and eighty days beginning from the insolvency commencement date and ending on one hundred and eightieth day;”
COMPLETION OF INSOLVENCY RESOLUTION PROCESS - It must be noted that Section 12 of the IB Code prescribes the time limit for completion of Insolvency Resolution process.
Introduction:
Incorporated with the objective of promoting maximization of value of assets in a time bound manner, the Insolvency and Bankruptcy Code (hereinafter referred to as “IBC”) works towards effective protection to honest creditors against unscrupulous debtors who may misuse insolvency to evade of their liabilities. The conducive and efficacious implementation of the IBC has instilled confidence in the creditors for a systematic and speedy reform. The remedy under the IBC is also available to the unpaid employees of the debtor which is now being recognized judicially as well.
Introduction –