Genesis of  Multiple laws – multiple fora

 Lack of holistic remedy

the Code  Insolvency resolution framework for Individuals stagnant for
over 100 years!
 The 1861 Indian High Courts Act led to the setting up of the
High Court system in place of the Presidency towns
Supreme Courts, which also has jurisdiction over insolvency
 The Presidency Towns Insolvency Act, 1909,
 The Provincial Insolvency Act, 1920,
 Framework for resolution of Corporate bankruptcy
 Companies Act, 1956
 The Micro, Small and Medium Enterprise Development Act,
2006,
 The SARFAESI Act, 2002
 The RDDBFI Act, 1993
 SICA-1985 (BIFR)
 Informal framework (prominently based on RBI Guidelines)
 Corporate Debt Restructuring
 Joint Lenders Forum
 Strategic Debt Restructuring
 S4A Sustainable Structuring of Stressed Assets
NCLT admitted cases by Demographics
Applicant-CIRP- ongoing IPs Registered with IPAs
IIIICAI (ICAI)- 1072

Total- 678 ICAIIPA (ICSI)- 1080

ICAIIPA (ICAI-CMA)- 149

IPE- 76
FC CD &
OC
Others
177 235 NCLT admitted 192 voluntary liquidation cases
266

NCLT admitted 97 voluntary liquidation cases

 Responsibility as IRP
Technical understanding
requirement to act as IPs
 Act as CEO & MD of the corporate to
maintain gong concern status and
momentum.
 Need to arrange interim Finance, if
required..
 Collect all information relating to the
assets, finances and operations of the
corporate debtor for past 2 years.
 Assess & segregate the Liability of
Financial & Operational Creditors
 Identify Related Party, Undervalue,
Erroneous, Preferred transactions,
 Prepare information memorandum
Responsibility as RP
 Act as CEO & MD of the corporate to
maintain gong concern status and
momentum.
 Need to arrange interim Finance, if
required..
 Take concurrence from COC on all
matters.
 Identify Related Party, Undervalue,
Erroneous, Preferred transactions,
 Push for Resolution Plan within 120 days
from takeover
 Successfully steer the Resolution plan
according to Code guideline.
 Select the appropriate Resolution plan
after following the procedures set in
Ordnance of IBC code.
 Establish Related party transaction Operational Challenges
Major Challenges After a FDD for last 2 years
 Managing changed management situation within
the corporate
Transactions influenced by KMP
Related Party

 Managing inter relationship within external stake

Transactions between Subsidiaries holders
Transactions between JVs
 Managing Information flows with complete security
Transactions between Associates and integrity

Refer IAS-24, IAS-28, IFRS-3, 10, 11, 12  Managing Going Concern Momentums
IndAS- 24, 28, 113, 110, 111, 112
 Get the best out of Resolution Package
Assets Valuation- the latest debate, but
new hassle for IP  Not only ends only dealing with Legal issues but a
lots besides.
Infrastructure & Talent pool

Cross Country Insolvency


Major Challenges- Resolution
Issues in Resolution Plan
Prepare most accurate Information
Memorandum of information
Prepare evaluation matrix for submitted
resolution proposal
Establish the credentials of resolution
applicants- Section 29A
Evaluating resolution plan in view to
understand complete stakeholder
satisfaction.
Convince COC on best plan
Convince AA for the best resolution
plant and execution modalities.
Operational Challenges
 Cost implication for engaging best professions
(valuers, market intelligence, predictive analytics)
are high. Get resistance from COC.
 Developing a
 Managing Information flows with complete security
and integrity
 Managing Going Concern Momentums
 Get the best out of Resolution Package
 Not only ends only dealing with Legal issues but a
lots besides.
 Comparative Strength Glaring weakness Opportunities
Opportunities for CMAs  Strong process understanding or  Weak networking and lack in  Indian banking sector
incline for process Team effort. has second highest NPA
understanding. This professional 17.78% of GDP after
attributes will help to be a  Poor Visibility and lack of prime Italy with 27.22.
successful resolution professional institute support.
 Japan has no NPA, USA
 Industry working experience will  Regular updating of skill sets. 2.12%, UK 1.78%
help to stand in challenges like Brazil-11.18%
Change management, Man &
Situational management.  After increasing in the
rank of ease of doing
 Analytical skills of CMAs will business, FIIs are
help to identify “what went interested for setting
wrong” AMF for stressed assets.
 CMAs can convert this
opportunities with
strength after working
on the weakness.
 Operational Debts
 a claim in respect of the provision of
goods or
 services including employment or a
debt in respect of the repayment of
dues arising under any law for the time
being in force and payable to the
Central Government, any State
Government or any local authority
Default
 non-payment of debt when whole or
any part or instalment of the amount
of debt has become due and payable
and is not repaid by the debtor or
 the corporate debtor, as the case may
be;
Minimum Default
Rupees. 1,00,000 Only
Case Matters for reference
The NCLAT in Pslogix Infrastructure Pvt. Ltd. v. lClCl Bank Ltd has held
that a general power of attorney holder is not authorised to present an
insolvency application under sections 7, 9 and 10 of the Insolvency and
Bankruptcy Code, 2016 ("IBC")
International Road Dynamics South Asia Pvt. Ltd. Vs. Reliance
Infrastructure Ltd. Interpreting section 9 of the Code, the Hon’ble
NCLAT held: “We are of the view that different claim(s) arising out of
different agreements or work order, having different amount and different
dates of default, cannot be clubbed together for alleged default of debt, the
cause of action is being separate. For the said reasons, we hold that the
joint application preferred by appellant under Section 9 is defective, as
distinct from incomplete, and, was not maintainable.”
Mobilox Innovations Private Limited Vs. Kirusa Software Private
Limited-SC- The Hon’ble Supreme Court has settled several issues in this
matter. As regards ‘existence of a dispute’ under section 8(2)(a) of the
Code, it clarified that what is material is that a dispute must exist in fact.
It should not be spurious, hypothetical or illusory and it should not be a
patently feeble legal argument or an assertion of fact unsupported by
evidence.
 Financial Debts
 money borrowed against the payment of interest;
 any amount raised by acceptance under any
acceptance credit facility
 any amount raised pursuant to any note purchase
facility or the issue of bonds, notes, debentures,
loan stock or any similar instrument;
 the amount of any liability in respect of any lease
or hire purchase contract which is deemed as a
finance or capital lease under the Indian
Accounting Standards
 receivables sold or discounted other than any
receivables sold on nonrecourse basis;
 any amount raised under any other transaction,
including any forward sale or purchase
agreement, having the commercial effect of a
borrowing;
 any derivative transaction
 any counter-indemnity obligation in respect of a
guarantee, indemnity, bond, documentary letter of
credit or any other instrument issued by a bank or
financial institution;
Case Matters for reference
Innoventive Industries Limited vs. ICICI Bank Limited-SC
Industrial & Commercial Bank of China vs Alok Industries
Financial debt is money borrowed to repay on a future date along
with interest. The money is lent for value addition to the money as
agreed between parties.
Bills of exchange along with interest would become “financial
debt” not “operational debt.”
Nikhil Mehta and Sons vs AMR Infrastructure Limited
Committed return plan in a real estate transaction should be
considered as financial debt and the applicant should be
considered as FC.
M/s Uttam Galva Steel Limited
Financial debt is money borrowed to repay on a future date along
with interest. The money is lent for value addition to the money as
agreed between parties.
Bills of exchange along withinterest would become “financial
debt” not “operational debt.”
 "resolution plan" means a plan proposed by any person for insolvency resolution
of the corporate debtor as a going concern in accordance
Resolution
"resolution applicant" means any person who submits a resolution plan to the
resolution professional;
Plan
"resolution professional", for the purposes of this Part, means an insolvency professional appointed to
conduct the corporate insolvency resolution process and includes an interim resolution professional;

"resolution process cost",

1. amounts due to suppliers of essential goods and services under Regulation 32;
2. amounts due to a person whose rights are prejudicially affected on account of the moratorium imposed under
section 14(1)(d);
3. expenses incurred on or by the interim resolution professional to the extent ratified under Regulation 33;
4. expenses incurred on or by the resolution professional fixed under Regulation 34; and
5. other costs directly relating to the corporate insolvency resolution process and approved by the committee.
A resolution plan may provide for the measures required for implementing it, including but not limited to the following- 37 of the
Regulation.

(a) transfer of all or part of the assets of the corporate debtor to one or more persons;

(b) sale of all or part of the assets whether subject to any security interest or not;

(c) the substantial acquisition of shares of the corporate debtor, or the merger or consolidation of the corporate debtor with one or
more persons;

(d) satisfaction or modification of any security interest;

(e) curing or waiving of any breach of the terms of any debt due from the corporate debtor;

(f) reduction in the amount payable to the creditors;

(g) extension of a maturity date or a change in interest rate or other terms of a debt due from the corporate debtor;

(h) amendment of the constitutional documents of the corporate debtor;

(i) issuance of securities of the corporate debtor, for cash, property, securities, or in exchange for claims or interests, or other
appropriate purpose; and

(j) obtaining necessary approvals from the Central and State Governments and other authorities.
Mandatory contents of the resolution plan.- Regulation 38
(1) A resolution plan shall identify specific sources of funds that will be used to pay the -

(a) insolvency resolution process costs and provide that the insolvency resolution process costs will be paid in priority to any other
creditor;

(b) liquidation value due to operational creditors and provide for such payment in priority to any financial creditor which shall in
any event be made before the expiry of thirty days after the approval of a resolution plan by the Adjudicating Authority; and

(c) liquidation value due to dissenting financial creditors and provide that such payment is made before any recoveries are made by
the financial creditors who voted in favour of the resolution plan.

A resolution plan shall provide:

(a) the term of the plan and its implementation schedule;

(b) the management and control of the business of the corporate debtor during its term; and

(c) adequate means for supervising its implementation.

A resolution plan shall contain details of the resolution applicant and other connected persons
‘details’ shall include the following in respect of the resolution applicant and other connected person, namely:-
(a) identity;
(b) conviction for any offence , if any, during the preceding five years;
(c) criminal proceedings pending, if any;
(d) disqualification, if any, under Companies Act, 2013, to act as a director;
(e) identification as a wilful defaulter, if any, by any bank or financial institution or consortium thereof in accordance with the
guidelines of the Reserve Bank of India;
(f) debarment, if any, from accessing to, or trading in, securities markets under any order or directions of the Securities and
Exchange Board of India,; and
(g) transactions, if any, with the corporate debtor in the preceding two years.”;
(ii) the expression ‘connected persons’ means-
(a) persons who are promoters or in the management or control of the resolution applicant;
(b) persons who will be promoters or in management or control of the business the corporate debtor during the implementation of
the resolution plan;
(c) holding company, subsidiary company, associate company and related party of the persons referred to in items (a) and (b)
The resolution professional shall submit to the committee all resolution plans which comply with the requirements of the Code and
regulations made thereunder along with the details of following
(d) preferential transactions under section 43;
(e) undervalued transactions under section 45;
(f) extortionate credit transactions under section 50; and
(g) fraudulent transactions under section 66, and the orders, if any, of the adjudicating authority in respect of such transactions.”.
IBC guides for winding up, liquidation and dissolution
Section 2(94A) of the Companies Act 2013 defines “winding up”- introduced by section 255 schedule XI of the IBC
2016, briefly

Corporate IBC-2016 Companies Act-2013 (HC

Winding up (NCLT) Jurisdiction)
Process

Corporate Insolvency Winding up on

Resolution Process- (Inability grounds other than
to pay debts) inability to pay
Under IBC Companies Act 2016

Pending cases in HC
Voluntary Liquidation filed before IBC
regime
Quick idea of global insolvency regimes
Global insolvency regimes may be Enacted in countries
classed into
 Pro-debtor jurisdictions USA, France,

UK, and other commonwealth countries

 Pro-creditor jurisdictions
Islamic countries, and until recently, China passed a law in
 Indifferent, or unclear 2006

Indicators of a pro creditor stance of a jurisdiction- identical to Indian Scenario

• The scope and efficiency, in bankruptcy, of security and title financing (such as retention of title, factoring
and financial leasing);
• Insolvency set-off;
• Corporate rehabilitation statutes;
• Ownership of assets in the possession of the debtor (trust, tracing);
• Preferential transfers;
• Contract and lease rescission.
Based on Philip Wood’s write up
Why …..CODE….. not an…… ACT ??
A "Code", as per Black’s law dictionary Codes of India
is, The Indian Penal Code 1860
“A Collection or Compendium of
The Code of Civil Procedure 1908
Laws”
The Code of Criminal Procedure 1860
Systematic and comprehensive
The insolvency and Bankruptcy Code 2016
compilation of laws, rules and
regulations that are consolidated and
classified for a particular subject. Companies (excluding BSFI)

LLP

Partnership & Individual

Other body incorporated

The IBC Codes Applies to……

 Committees on bankruptcy reforms in India
Journey 26th Report of Law Commission on Insolvency Laws,
1964 recommended consolidation of extant two personal insolvency
towards the laws into one.

1981  Tiwari Committee, led to enactment of SICA, became an Act in 1985

Code
1991  Narasimha Committee-1, led to enactment of the RDDBFI Act, 1993

1998  Narasimha Committee 2, led to enactment of the SARFAESI Act, 2002

Justice Eradi Committee. Recommended amendment in Companies (Amendment) Act, 2002,
1999 proposed setting up of NCLT for rehabilitation of sick companies –but never enforced

2001 L. N. Mitra Committee, First proposed a Comprehensive bankruptcy code

2005 Irani Committee, made aamendments to RDDBFI and SARFAESI

Financial Sector Legislative Reforms Commission, prepared a draft on Indian Financial Code
2013
includes a for resolving distressed financial firms.
The Bankruptcy Law Reform Committee (BLRC) under the Chairmanship of Mr. T.K. Viswanathan,
2014 led to The Insolvency and Bankruptcy Bill, 2015, received the assent of the President on 28 th May
2016
 The IBC-2016 Applies for……...
 Insolvency
 Liquidation
 Voluntary Liquidation
 Bankruptcy
 Fresh Start process
General Understanding.docx
The IBC does not apply to…….
Part II of the code pertaining to insolvency to
Individuals & Firms – does not apply to State Jammu
& Kashmir
Part II of the code pertaining to insolvency code –
does not apply to Financial Service providers
For MFIs, NBFCs and financial service providers the
Ministry of Finance has released draft of “The
Financial Resolution and Deposit Insurance Bill,
2016”.Cabinet approves proposal to introduce the
Financial Resolution and Deposit Insurance Bill
2017- ref- Press Information Bureau Government of
India -
The Financial Resolution and Deposit Insurance Bill.docx
Acts repealed by the Code
 Presidency Towns Insolvency Act, 1909

 Provincial Insolvency Act, 1920

Impact of the IBC 2016

 BIFR and SICA go off completely

 Corporate resolutions comes under NCLT

 Timelines under the new law – entire process of resolution to be over in 180
to max 270days

 Debtors under banker-driven restructuring also go for NCLT/DRT

resolution –In view of mandatory timelines, the case may reach bankruptcy
Impact of the IBC 2016
 Companies and guarantors can be both brought under a common forum –
NCLT/DRT

 While borrowers may file resolution applications seeking moratorium, but

borrower will have to face the threat of liquidation/bankruptcy ;

 Accelerating provisioning – faster transition into a case of loss assets.

 Brings greater financial discipline

 Creditors have an upper hand in resolution plans

 If revival does not work out, entity to mandatorily go into liquidation

 The Finance Bill, 2017
Made the amendments , in turn, provide for amendments to infavour of the Code

 The Indian Partnership Act, 1932

 The Central Excise Act, 1944

 The Income-tax Act, 1961

 The Customs Act, 1962

 The Recovery of Debts due to Banks and Financial Institutions Act, 1993

 The Finance Act, 1994

 The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

 The Sick Industrial Companies (Special Provisions) Repeal Act, 2003

 The Payment and Settlement Systems Act, 2007

 The Limited Liability Partnership Act, 2008

 The Companies Act, 2013

the
Eco-System of IBC
CodeInsolvency and Bankruptcy
IBBI – apex body for promoting transparency & governance in the
administration of the Code; will be involved in setting up the infrastructure and
Board of India (IBBI) accrediting IPs & Ius.
National Company Law Tribunal

IUs - centralized repository of financial and credit information of borrowers;

would validate the information and claims of creditors vis-à-vis borrowers, as
(Adjudicating Authority)

IPAs IUs needed

IPAs - professional bodies registered by the Board to promote and regulate the
insolvency profession; these bodies will enrol Ips-
IPs
IPs - licensed professionals regulated by the IBBI; will conduct resolution process;
to act as Liquidator; appointed by creditors and will assume the powers of
suspended board of directors National
COCs AA- would be the NCLT for corporate insolvency; to entertain or dispose any
insolvency application, approve/reject resolution plans, decide in respect of claims
or matters of law/facts thereof

CoCs - consists of financial creditors who will appoint and supervise actions of
Insolvent unit IPs; need to approve the resolution plan
  5 Parts, 7 Chapters in Part- II, III, IV
 255 Sections & 11 Schedules (245 to 255)
Framework of
IBC, 2016 – Analysing the 5 Parts
the Code
PART II Part III Part IV Part V
PART-I- CIRP REGULATION OF MISCELLANEOUS
IIRP o Section 224-255
o PRELIMINARY - 1 IPA
o Chapter –Section 1 & o (Section 245- 255
& &
-3 enables
LIQUIDATION
BANKRUPCY IU o Amendments in
o 7 Chapters - Sections o other statutes, 11
7 Chapters o 7 Chapters
4-77 o Section 78-187 legislations
o Section 188-223
o Section 5 definitions o Section 79
definitions
the

Code

Deals Corporate
Liquidation
with
Corporate
Insolvency
Resolution Process
 Code (Act) Rules & Regulations- framed by IBBI
Part II of IBC 2016 The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016
( S 4 to 77)- CIRP & (w.e.f. 01.12.2016). Specifies the application forms for filing the matters in AA- form 1 to
form 6
Liquidation of Corporate
person  Insolvency and Bankruptcy Board of India (Insolvency Resolution Process For
Corporate Persons) Regulations, 2016. 3 rd Amendment. 7th Nov. 2017)
 C I Preliminary S 4 & 5
 Insolvency and Bankruptcy Board of India (Voluntary Liquidation process)
 C II Corporate Insolvency
Regulations, 2017 3rd Amendment. 7th Nov. 2017)
Resolution Process S 6 to 32
 C III Liquidation Process S 33 to
54  The Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution
Process for Corporate Persons) Regulations, 2017 (w.e.f. 15th June, 2017) 3rd
 C IV Fast Track Corporate Amendment. 7th Nov. 2017)
Insolvency Resolution Process S 55
to 58
 C V Voluntary Liquidation of
Corporate Persons S 59
 C VI Adjudicating Authority for
Corporate Persons
 C VII Offences and Penalties
What is 'Insolvency’
Insolvency is when an organization, or individual, can no longer meet its financial obligations with its 
lender or lenders as debts become due. Before an insolvent company, or person, gets involved in
insolvency proceedings, it will likely be involved in informal arrangements with creditors, such as
making alternative payment arrangements. Insolvency can arise from poor cash management, a
reduction in cash inflow forecasts or from an increase in expenses.

Read more: http://www.investopidia.com

In legal terminology, the situation where the liabilities of a person or firm exceed its assets. In practice,
however, insolvency is the situation where an entity cannot raise enough cash to meet its obligations, or
to pay debts as they become due for payment. Properly called technical insolvency, it may occur even
when the value of an entity's total assets exceeds its total liabilities. Mere insolvency does not afford
enough ground for lenders to petition for involuntary bankruptcy of the borrower, or force a liquidation
of his or her assets.

Read more: http://www.businessdictionary.com/definition/insolvency.html

General Understanding.docx
 FC- Financial Creditors- any person to whom a financial
Who can debt is owed and includes a person to whom such debt
CIRP is a Trigger has been legally assigned or transferred to….

360D CD/CA-
• corporate debtor; or
FC
OC- a person to CD
CD
• a member or partner of the corporate debtor who is
Approach
whom an authorised to make an application for the corporate
operational debt is insolvency resolution process under the constitutional
owed and includes document of the corporate debtor; or
any person to whom • an individual who is in charge of managing the
such debt has been Mandatory Time operations and resources of the corporate debtor; or
legally assigned or for CIRP-180 • a person who has the control and supervision over the
transferred… days with one financial affairs of the corporate debtor
time maximum
extension of 90
days. Total 270
days
 Cases Admitted
397 96
83

43
36 39
30
24
13 14 15
4

Jan Feb Mar Apr May June July Aug Sep Oct Nov

IPS-1143 IPS
250

200

150

100

The Code 50

on the ground 0
Jan Feb Mar Apr May June July Aug Sep Oct Nov

nd
 IBC was approved by both Houses of the Parliament and The NPA problem, make the exit process easier for The following is a point-of-view onthe top 10

Hitches of the Code

Implementation
received the presidential assent in May 2016. It was made
operational from 1 December 2016. Everyone involved
has been surprised with the speed and commitment with
which it has moved forward in the last 12–18 months.
IBC is often touted as the second most important
legislative reform (after GST) that the incumbent
Government has undertaken, as it is expected to resolve
investors, attract fresh capital and foreign
investors, channelize capital to more productive
assets and give a fillip to India’s ease of doing
business ranking. While the new Code elicited
praises and excitement from market participants, it
also led to concerns regarding the readiness of the
infrastructure for proper implementation.
concerns raised at the beginning of the journey
and also how the market seems to be developing.
These are our views and understanding of the on-
ground situation and are purely based on our
experience in the last few months and interactions
with other IPs, lawyers, bankers, creditors,
promoters and various other stakeholders
involved

Concerns Remarks
IBC is a transformational reform in many ways and looks to make some very important structural
Constitutional Validity changes. Many concerns were raised initially around the constitutional validity of some of the provisions
of the Code. Essar Steel filed a petition in Gujarat High Court Challenging Reserve Bank of India’s
of the Code decision to refer it to the NCLT to start CIRP. Similarly, multiple cases/appeals are filled against the
applications filed for CIRP; however, no appeal has significantly impacted the CIRP process, once
initiated. In the first case admitted under IBC, Innovative vs. ICICI Bank, a writ petition was filed
challenging the constitutional validity of section 4 to section 32 of the Code. However, NCLAT decided
that the provisions of the Code shall have effect notwithstanding the provisions of any other law for the
time being in force. The Innovative matter is currently. Presentation 2.pptx

The NCLT may not be able to handle plethora of proceedings under IBC. The NCLT was constituted on 1
The NCLT may not be June 2016 with 10 benches and one principal bench. A major challenge foreseen for the Code was the tidal
able to handle flow of cases to the NCLT. In addition to new cases filed for resolution under IBC, there was a significant
backlog of cases that were transferred from CLB. Also, winding up cases with high courts, corporate
plethora of recovery cases with the debt recovery tribunals (DRTs) and rehabilitation cases with the BIFR were
transferred to the NCLT. We understand that as of now ~ 1,540 cases are filed with the NCLT under IBC,
proceedings under of which ~ 299 are admitted, and we understand that the NCLT has coped well with the workload. The
IBC NCLT would continue to play a very critical role in the IBC ecosystem as more complex filings happen
over the next few months. We also understand that, discussions are already onto increase the number of
benches and change single-member benches to double-member
 Concerns Remarks
Role of Regulator IBBI has a critical role in holding thee tire ecosystem of IBC together and making sure the Code is moving forward in the
right direction. It was established on 1 October 2016 and has already made significant progress in setting up the IPA,
conducting exams to registers IPs and issuing multiple regulations to support the smooth implementation of the Code. IBBI
has been at the forefront in building capacity, educating the market and proactively supporting the implementation of the
Code. However, the job has not been easy and the expectations are high. Looking at the role played by the regulator in
matured markets, we believe IBBI must continue to provide a lead role in a smooth implementation of the Code over the
next few years.

Stringent Timelines One of the hallmark of IBC is the strict time-bound resolution process it proposes. Erstwhile insolvency laws and regulations
were not very effective in terms of standing by the timelines specified. The specified time limits for resolution under IBC is a
provided in the Code breath of fresh air to the creditors but at the same time, is considered an uphill task to achieve. There have been deviations
in a few cases from the 14-day timeline for the NCLT to admit or reject a case. NCLAT in the case of J K Jute Mills
Company Limited. stated that the 14-day timeline for the NCLT was not mandatory. However, other procedural timelines,
for example, for public announcement, have been broadly adhered to. The real test for IBC timelines would be to get cases
resolved within a period of 180/270 days with all necessary approvals.

In the IBC design, the IU enables quicker initiation of cases by providing access to irrefutable and transparent evidence of
No Information default. In the absence of IUs, initiating a case as well as forming the CoC will take longer and be more challenging than
Utilities is in place envisaged. This in turn will make it difficult to meet the 180-day timeline. IBBI notified Information Utilities Regulations,
effective from 1 April 2017. The regulations provide for a framework and technical standards for registration and regulation
of IUs. National E-Governance Services Limited has been appointed as IU on 27 th Sep 2017.

The CoC is a key decision making bodyin every CIRP. The speed of decision making at the CoC should match the pace at
Speed of decision which the Code has progressed. Banks are in the process of developing internal guidelines & decision matrices to enable the
making by COC attendees of CoC to have efficient decisions in time. The speed of CoC would also depend upon the expertise of the IP. The IP
should provide relevant information before time to CoC members, to help them take internal approvals and come better
prepared for CoC voting.
 Concerns Remarks
OCs misusing the Since the trigger of the Code is a default of only INR1 lakh, there were concerns regarding frivolous fillings by OCs. Out of
the ~ 299 cases admitted by the NCLT, ~ 50% have been initiated by OCs. Also, most of the cases withdrawn from the total
intent of the Code of ~1,000 filed, are related to cases where the corporate debtor and OC make an out-of-court settlement. This has resulted in
the use of IBC as a mechanism for recovery instead of resolution. However, this is also driven by lack of other remedies
available to OCs following the introduction of the Code Better understanding of the position of OCs under liquidation
waterfall and the costs involved as an

Availability of IPs IPs form the backbone of the Code. However, with limited guidance and significant liabilities, there were initially many
apprehensions around professionals coming forward to take up the role of IP. Their role requires a fine balancing act, given
that they are in charge of managing the debtor company and are accountable to the CoC and the adjudicating authority for
their actions. Equally important are and there are already ~ 1095 IPs registered with more than 10 years of professional
experience. Only ~ 299 cases have been admitted untill now and the outcome of most of them would only be tested in the
next few months, hence most of the registered IPs still do not have practical experience of successfully running and closing
CIRP. Therefore, while the supply side concern has been addressed, the jury is still out on the quality and performance of
IPs. Personal qualities, such as integrity and independence. Fortunately, professionals have reacted very positively toward
the opportunity

Pushback from the Taking control of the corporate debtor and suspending the powers of the BoD (promoters) has been seen a major challenge in
the implementation of the Code. Based on our experience and discussion with other IPs, if the communication is kept clear
promoters/ and transparent with the promoters and other stakeholders, promoters are largely co-operating with the process. Promoters
managements. genuinely interested in the revival of enterprises. At the same time, there have been sporadic instances of physical threats to
IPs from promoters and promoters threatening to sue IPs for loss of a contract. CIRP has to be seen and communicated by IP
Transition from as a resolution process for the benefit of all stakeholders. The experience and knowledge of the BoD (promoters) should be
actively leveraged by IP, to maintain a going concern and cause minimal disruption to operations while a resolution is being
“Debtors in possession worked out to maximize return for all stakeholders. would not see their displacement as threat but as an opportunity to focus
to creditors in control” on putting together a resolution plan.

would be challenging
Who to become an IP Applicable for the period 1st July, 2017 to 31st December, 2017……..
Syllabus_revised_LIE_2.pdf

Applicable for the period 1st Jan, 2018 to 31st Mar, 2018…….
. Exam Syllabus-Jan-2018.docx

Applicable for the period 1st April, 2018 to 30 June, 2018…….

th

Proposed change in examination pattern-

LIE_consultation_paper (3).pdf
 Bare Acts- www.ibbi.gov.in
Examination Resources Mock Papers from www.icsiipa.com
E-Reources from www.iiipaicai.in
Books from Taxman- IBC code
Case Laws from IBC practical cases-ICSI publications
General Laws from ICSI intermediate study materials
Case laws from www.ibbi.gov.in
Finance and accounts- CMA final study materials
Miscellaneous topics NCERT- Civics- class X & IX
Pass Mark- 60
Total Marks 100
Questions-87
Negative Marks-
25%
Test time- 2
hours