Changes Bought in IBBI (Liquidation Process) (Amendment) Regulations 2021

The Insolvency and Bankruptcy Board of India (IBBI), by way of the powers provided by section 196 (1) (t), read with the provisions of section 240 of the Insolvency and Bankruptcy Code 2016, has notified the IBBI (Liquidation Process) (Amendment) Regulations 2021. The same was done through a Notification issued on 04.03.2021.

Also, it shall be noted that such changes are made in the IBBI (Liquidation Process) Regulations 2021.

In this blog, we will cover the concept of IBBI^[1], together with the key changes bought in the IBBI (Liquidation Process) (Amendment) Regulations 2021.

Concept of Insolvency Bankruptcy Board of India

IBBI or the Insolvency Bankruptcy Board of India is a key pillar in the ecosystem, which is responsible for the implementation of IBC 2016 and amends the laws and provisions concerning the reorganisation and insolvency resolution of partnership firms, corporate persons, and individuals that, too, in a time bound manner. The reason for the same is that it helps in the maximization of the asset value of such persons, promotion of entrepreneurship, credit availability, etc. Also, it balances the interest of all the stakeholders.

Further, it is a unique regulator, which regulates both profession and processes and has regulatory oversight over the following:

1. Insolvency Professionals (IP);
2. Insolvency Professional Agencies (IPA);
3. Insolvency Professional Entities & Information Utilities (IPEIU), etc.;  

Also, the same has the power to write and enforce rules for the processes, such as follows:

1. Corporate Insolvency Resolution;
2. Corporate Liquidation;
3. Individual Insolvency Resolution;
4. Individual Bankruptcy under the Code, etc.;

Key Changes Bought in IBBI (Liquidation Process) (Amendment) Regulations 2021

The key changes bought in the Insolvency Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations 2021 can be summarised as:

Substitution in Sub Rule (2) of Rule 31

Based on the new provisions, the liquidator will file a complete list of stakeholders with the AA (Adjudicating Authority) within a period of forty five days, starting from the last date for the receipt of the claims.

Insertion of clause (d) in Sub Rule 5 of Rule 31

The newly inserted clause states that the details filed on the electronic platform of the IBBI for dissemination on its website.

Provided that this said clause will apply to every liquidation process that is ongoing and commencing on or after the commencement date of the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations 2021.

Conclusion

In a nutshell, IBBI, by way of the powers provided by IBC 2016, has notified amendments in the IBBI (Liquidation Process) Regulations 2021. The main reason for the same was to develop, boost, and infuse transparency in the ecosystem.

Official Notification of Amendment issued by IBBI