IBBI amendments for streamlining the insolvency resolution process
The Insolvency and Bankruptcy Board of India (IBBI), has, vide notification dated 18th September, 2023 introduced the IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations to further streamline the insolvency resolution process.
The amendments (discussed below) provide some relaxation to the stakeholders thereby extending the timeline for submitting claims. Further, an attempt has also been made to provide assistance to NCLT Benches for dealing with applications u/s 7 or 9 for admission/rejection of claim. However, the obligation s of the Resolution professionals (RPs) have also been increased as the amendment now requires the RPs to not just take handover of the assets of the Corporate Debtor (CD) but also verify asset by asset list of the CD, tally the same with the financials of the CD, and to report the same while making application u/s 19(2), if not found in conformity with the assets shown in the financials of the CD. Also, for condonation of delay of claims filed by the stakeholders, the amendment now requires the RP to file application before AA.
The amendments also propose for Audit of Corporate Debtor a new requirement with an intention to make the process more efficient and transparent. It is mostly in the nature of forensic audit, wherein the audit shall be conducted by an Insolvency Professional having qualification to conduct such audits.
