Cirp (Sec. 6-32)

“Where any corporate debtor commits a default, a financial creditor, an operational
creditor or the corporate debtor itself may initiate corporate insolvency resolution process in respect of such corporate debtor in the manner as provided under this Chapter” VL Note : –

“(1) A financial creditor either by itself or jointly with other financial creditors, or any
other person on behalf of the financial creditor, as may be notified by the Central
Government] may file an application for initiating corporate insolvency resolution process
against a corporate debtor before the Adjudicating Authority when a default has occurred.
Explanation. – For the purposes of this sub-section, a default includes a default in
respect of a financial debt owed not only to the applicant financial creditor but to any other
financial creditor of the corporate debtor.
(2) The financial creditor shall make an application under sub-section (1) in such
form and manner and accompanied with such fee as may be prescribed.
(3) The financial creditor shall, along with the application furnish –
(a) record of the default recorded with the information utility or such other record
or evidence of default as may be specified;
(b )th e name of the resolution professional proposed to act as an interim resolution
professional; and
(c) any other information as may be specified by the Board.
(4) The Adjudicating Authority shall, within fourteen days of the receipt of the
application under sub-section (2), ascertain the existence of a default from the records of an
information utility or on the basis of other evidence furnished by the financial creditor under sub-section (3):
Provided that if the Adjudicating Authority has not ascertained the existence of
default and passed an order under sub-section (5) within such time, it shall record its reasons in writing for the same.
(5) Where the Adjudicating Authority is satisfied that –
(a) a default has occurred and the application under sub-section (2) is complete, and
there is no disciplinary proceedings pending against the proposed resolution
professional, it may, by order, admit such application; or(b) default has not occurred or the application under sub-section (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application:

Provided that the Adjudicating Authority shall, before rejecting the application under
clause (b) of sub-section (5), give a notice to the applicant to rectify the defect in his
application within seven days of receipt of such notice from the Adjudicating Authority.
(6) The corporate insolvency resolution process shall commence from the date of
admission of the application under sub-section (5).
(7) The Adjudicating Authority shall communicate-
(a) the order under clause (a) of sub-section (5) to the financial creditor and the
corporate debtor;
(b) the order under clause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be” VL Note : –

“(1) An operational creditor may, on the occurrence of a default, deliver a demand notice
of unpaid operational debtor copy of an invoice demanding payment of the amount
involved in the default to the corporate debtor in such form and manner as may be
prescribed.
(2) The corporate debtor shall, within a period of ten days of the receipt of the demand
notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the
operational creditor –
(a) existence of a dispute, 1
[if any, or] record of the pendency of the suit or
arbitration proceedings filed before the receipt of such notice or invoice in relation to
such dispute;
(b)the 2
[payment] of unpaid operational debt-
(i) by sending an attested copy of the record of electronic transfer of the
unpaid amount from the bank account of the corporate debtor; or
(ii) by sending an attested copy of record that the operational creditor has
encashed a cheque issued by the corporate debtor.
Explanation. – For the purposes of this section, a “demand notice” means a notice
served by an operational creditor to the corporate debtor demanding 3
[payment] of the operational debt in respect of which the default has occurred. ” VL Note : –

“(1) After the expiry of the period of ten days from the date of delivery of the notice or
invoice demanding payment under sub-section (1) of section 8, if the operational creditor
does not receive payment from the corporate debtor or notice of the dispute under subsection (2) of section 8, the operational creditor may file an application before the
Adjudicating Authority for initiating a corporate insolvency resolution process.
(2) The application under sub-section (1) shall be filed in such form and manner and
accompanied with such fee as may be prescribed.
(3) The operational creditor shall, along with the application furnish-
(a) a copy of the invoice demanding payment or demand notice delivered by the
operational creditor to the corporate debtor;
(b) an affidavit to the effect that there is no notice given by the corporate debtor
relating to a dispute of the unpaid operational debt;
(c) a copy of the certificate from the financial institutions maintaining accounts of
the operational creditor confirming that there is no payment of an unpaid operational
debt 1
[by the corporate debtor, if available;]
2
[(d) a copy of any record with information utility confirming that there is no
payment of an unpaid operational debt by the corporate debtor, if available; and
(e) any other proof confirming that there is no payment of any unpaid operational
debt by the corporate debtor or such other information, as may be prescribed.]
(4) An operational creditor initiating a corporate insolvency resolution process under
this section, may propose a resolution professional to act as an interim resolution
professional.
(5) The Adjudicating Authority shall, within fourteen days of the receipt of the
application under sub-section (2), by an order–
(i) admit the application and communicate such decision to the operational creditor
and the corporate debtor if, –
(a) the application made under sub-section (2) is complete;
(b) there is no 3
[payment] of the unpaid operational debt; (c) the invoice or notice for payment to the corporate debtor has been
delivered by the operational creditor;
(d) no notice of dispute has been received by the operational creditor or there
is no record of dispute in the information utility; and
(e) there is no disciplinary proceeding pending against any resolution
professional proposed under sub-section (4), if any.
(ii) reject the application and communicate such decision to the operational
creditor and the corporate debtor, if –
(a) the application made under sub-section (2) is incomplete;
(b) there has been 1
[payment] of the unpaid operational debt;
(c) the creditor has not delivered the invoice or notice for payment to the
corporate debtor;
(d) notice of dispute has been received by the operational creditor or
there is a record of dispute in the information utility; or
(e) any disciplinary proceeding is pending against any proposed resolution
professional:
Provided that Adjudicating Authority, shall before rejecting an application under subclause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application
within seven days of the date of receipt of such notice from the Adjudicating Authority.
(6) The corporate insolvency resolution process shall commence from the date of
admission of the application under sub-section (5) of this section.” VL Note : –

“(1) Where a corporate debtor has committed a default, a corporate applicant thereof
may file an application for initiating corporate insolvency resolution process with the
Adjudicating Authority.
(2) The application under sub-section (1) shall be filed in such form, containing such
particulars and in such manner and accompanied with such fee as may be prescribed.
2
[(3) The corporate applicant shall, along with the application, furnish-
(a) the information relating to its books of account and such other documents for such period as may be specified;
(b) the information relating to the resolution proposed to be appointed as an interim
resolution professional; and
(c) the special resolution passed by shareholders of the corporate debtor or the
resolution passed by at least three-fourth of the total number of partners of the corporate
debtor, as the case may be, approving filing of the application.]
(4) The Adjudicating Authority shall, within a period of fourteen days of the receipt of
the application, by an order-
(a) admit the application, if it is complete 1
[and no disciplinary proceeding is pending
against the proposed resolution professional]; or
(b) reject the application, if it is incomplete 2
[or any disciplinary proceeding is
pending against the proposed resolution professional]:
Provided that Adjudicating Authority shall, before rejecting an application, give a
notice to the applicant to rectify the defects in his application within seven days from the
date of receipt of such notice from the Adjudicating Authority.
(5) The corporate insolvency resolution process shall commence from the date of
admission of the application under sub-section (4) of this section.” VL Note : –

“The following persons shall not be entitled to make an application to initiate corporate
insolvency resolution process under this Chapter, namely: –
(a) a corporate debtor undergoing a corporate insolvency resolution process; or
(b) a corporate debtor having completed corporate insolvency resolution process
twelve months preceding the date of making of the application; or
(c) a corporate debtor or a financial creditor who has violated any of the terms of
resolution plan which was approved twelve months before the date of making of an
application under this Chapter; or
(d) a corporate debtor in respect of whom a liquidation order has been made.
Explanation. – For the purposes of this section, a corporate debtor includes a corporate
applicant in respect of such corporate debtor. ” VL Note : –

“(1) Subject to sub-section (2), the corporate insolvency resolution process shall be
completed within a period of one hundred and eighty days from the date of admission of the application to initiate such process.
(2) The resolution professional shall file an application to the Adjudicating Authority
to extend the period of the corporate insolvency resolution process beyond one hundred
and eighty days, if instructed to do so by a resolution passed at a meeting of the committee
of creditors by a vote of 1
[sixty-six] per cent. of the voting shares.
(3) On receipt of an application under sub-section (2), if the Adjudicating Authority is
satisfied that the subject matter of the case is such that corporate insolvency resolution
process cannot be completed within one hundred and eighty days, it may by order extend
the duration of such process beyond one hundred and eighty days by such further period
as it thinks fit, but not exceeding ninety days:
Provided that any extension of the period of corporate insolvency resolution process
under this section shall not be granted more than once:
Provided further that the corporate insolvency resolution process shall mandatorily
be completed within a period of three hundred and thirty days from the insolvency
commencement date, including any extension of the period of corporate insolvency
resolution process granted under this section and the time taken in legal proceedings in
relation to such resolution process of the corporate debtor:
Provided also that where the insolvency resolution process of a corporate debtor is pending and has not been completed within the period referred to in the second proviso, \such resolution process shall be completed within a period of ninety days from the date of
commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019.” VL Note : –

“The Adjudicating Authority may allow the withdrawal of application admitted under
section 7 or section 9 or section 10, on an application made by the applicant with the
approval of ninety per cent. voting share of the committee of creditors, in such manner as
may be specified.” VL Note : –

“(1) The Adjudicating Authority, after admission of the application under section 7 or
section 9 or section 10, shall, by an order –
(a) declare a moratorium for the purposes referred to in section 14;
(b) cause a public announcement of the initiation of corporate insolvency
resolution process and call for the submission of claims under section 15; and
(c) appoint an interim resolution professional in the manner as laid down in section 16.
(2) The public announcement referred to in clause (b) of sub-section (1) shall be made
immediately after the appointment of the interim resolution professional” VL Note : –

“(1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement
date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of
the following, namely: –
(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority;
(b)transferring, encumbering, alienating or disposing off by the corporate debtor any of its assets or any legal right or beneficial interest therein;
(c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);
(d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.
(2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period.
(3) The provisions of sub-section (1) shall not apply to —
(a) such transaction as may be notified by the Central Government in consultation with any financial regulator;
(b) a surety in a contract of guarantee to a corporate debtor.
(4) The order of moratorium shall have effect from the date of such order till the
completion of the corporate insolvency resolution process:
Provided that where at any time during the corporate insolvency resolution process
period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of
section 31 or passes an order for liquidation of corporate debtor under section 33, the
moratorium shall cease to have effect from the date of such approval or liquidation order,
as the case may be.
” VL Note : –

“(1) The public announcement of the corporate insolvency resolution process under the
order referred to in section 13 shall contain the following information, namely: –
(a) name and address of the corporate debtor under the corporate insolvency
resolution process;
(b) name of the authority with which the corporate debtor is incorporated or
registered;
(c) the last date for submission of 1
[claims, as may be specified];
(d)details of the interim resolution professional who shall be vested with the
management of the corporate debtor and be responsible for receiving claims;
(e) penalties for false or misleading claims; and
(f) the date on which the corporate insolvency resolution process shall close, which
shall be the one hundred and eightieth day from the date of the admission of the
application under sections 7, 9 or section 10, as the case may be.
(2) The public announcement under this section shall be made in such manner as may
be specified.” VL Note : –

“(1) The Adjudicating Authority shall appoint an interim resolution professional within
fourteen days from the insolvency commencement date.
(2) Where the application for corporate insolvency resolution process is made by a
financial creditor or the corporate debtor, as the case may be, the resolution professional,
as proposed respectively in the application under section 7 or section 10, shall be appointed
as the interim resolution professional, if no disciplinary proceedings are pending against
him.
(3) Where the application for corporate insolvency resolution process is made by an
operational creditor and-
(a) no proposal for an interim resolution professional is made, the Adjudicating
Authority shall make a reference to the Board for the recommendation of an insolvency
professional who may act as an interim resolution professional;
(b) a proposal for an interim resolution professional is made under sub-section (4)
of section 9, the resolution professional as proposed, shall be appointed as the interim
resolution professional, if no disciplinary proceedings are pending against him.
(4) The Board shall, within ten days of the receipt of a reference from the Adjudicating Authority under sub-section (3), recommend the name of an insolvency professional to the
Adjudicating Authority against whom no disciplinary proceedings are pending.
(5) The term of the interim resolution professional shall continue till the date of
appointment of the resolution professional under section 22.” VL Note : –

“(1) From the date of appointment of the interim resolution professional, –
(a) the management of the affairs of the corporate debtor shall vest in the interim
resolution professional;
(b) the powers of the board of directors or the partners of the corporate debtor, as
the case may be, shall stand suspended and be exercised by the interim resolution
professional;
(c) the officers and managers of the corporate debtor shall report to the interim
resolution professional and provide access to such documents and records of the
corporate debtor as may be required by the interim resolution professional;
(d) the financial institutions maintaining accounts of the corporate debtor shall act
on the instructions of the interim resolution professional in relation to such accounts
and furnish all information relating to the corporate debtor available with them to the
interim resolution professional.
(2) The interim resolution professional vested with the management of the corporate
debtor, shall-
(a) act and execute in the name and on behalf of the corporate debtor all deeds,
receipts, and other documents, if any;
(b)take such actions, in the manner and subject to such restrictions, as may be
specified by the Board;
(c) have the authority to access the electronic records of corporate debtor from
information utility having financial information of the corporate debtor;
(d)have the authority to access the books of accounts, records and other relevant
documents of corporate debtor available with government authorities, statutory
auditors, accountants and such other persons as 2
[may be specified; and]
(e) 3
[be responsible for complying with the requirements under any law for the time
being in force on behalf of the corporate debtor.]
” VL Note : –

“The interim resolution professional shall perform the following duties, namely: –
(a) collect all information relating to the assets, finances and operations of the
corporate debtor for determining the financial position of the corporate debtor,
including information relating to –
(i) business operations for the previous two years;
(ii) financial and operational payments for the previous two years;
(iii) list of assets and liabilities as on the initiation date; and
(iv) such other matters as may be specified;
(b) receive and collate all the claims submitted by creditors to him, pursuant to the
public announcement made under sections 13 and 15;
(c) constitute a committee of creditors;
(d) monitor the assets of the corporate debtor and manage its operations until a
resolution professional is appointed by the committee of creditors;
(e) file information collected with the information utility, if necessary; and
(f) take control and custody of any asset over which the corporate debtor has
ownership rights as recorded in the balance sheet of the corporate debtor, or with
information utility or the depository of securities or any other registry that records the
ownership of assets including –
(i) assets over which the corporate debtor has ownership rights which may be
located in a foreign country;
(ii) assets that may or may not be in possession of the corporate debtor;
(iii) tangible assets, whether movable or immovable;
(iv) intangible assets including intellectual property;
(v) securities including shares held in any subsidiary of the corporate debtor,
financial instruments, insurance policies;
(vi) assets subject to the determination of ownership by a court or authority;
(g) to perform such other duties as may be specified by the Board.
Explanation. – For the purposes of this 1
[section], the term “assets” shall not include
the following, namely: –
(a) assets owned by a third party in possession of the corporate debtor held under trust or under contractual arrangements including bailment;
(b) assets of any Indian or foreign subsidiary of the corporate debtor; and
(c) such other assets as may be notified by the Central Government in consultation
with any financial sector regulator.” VL Note : –

“(1) The personnel of the corporate debtor, its promoters or any other person associated
with the management of the corporate debtor shall extend all assistance and cooperation
to the interim resolution professional as may be required by him in managing the affairs
of the corporate debtor.
(2) Where any personnel of the corporate debtor, its promoter or any other person
required to assist or cooperate with the interim resolution professional does not assist or
cooperate, the interim resolution professional may make an application to the Adjudicating
Authority for necessary directions.
(3) The Adjudicating Authority, on receiving an application under sub-section (2), shall
by an order, direct such personnel or other person to comply with the instructions of the
resolution professional and to cooperate with him in collection of information and
management of the corporate debtor.
” VL Note : –

“(1) The interim resolution professional shall make every endeavour to protect and
preserve the value of the property of the corporate debtor and manage the operations of the
corporate debtor as a going concern.
(2) For the purposes of sub-section (1), the interim resolution professional shall have
the authority-
(a) to appoint accountants, legal or other professionals as may be necessary;
(b) to enter into contracts on behalf of the corporate debtor or to amend or modify
the contracts or transactions which were entered into before the commencement of
corporate insolvency resolution process;
(c) to raise interim finance provided that no security interest shall be created over
any encumbered property of the corporate debtor without the prior consent of the
creditors whose debt is secured over such encumbered property:
Provided that no prior consent of the creditor shall be required where the value of such
property is not less than the amount equivalent to twice the amount of the debt.
(d) to issue instructions to personnel of the corporate debtor as may be necessary
for keeping the corporate debtor as a going concern; and (e) to take all such actions as are necessary to keep the corporate debtor as a going
concern.” VL Note : –

“(1) The interim resolution professional shall after collation of all claims received
against the corporate debtor and determination of the financial position of the corporate
debtor, constitute a committee of creditors.
(2) The committee of creditors shall comprise all financial creditors of the corporate
debtor:
Provided that a 1
[financial creditor or the authorised representative of the financial creditor
referred to in sub-section (6) or sub-section (6A) or sub-section (5) of section 24, if it is a related
party of the corporate debtor,] shall not have any right of representation, participation or
voting in a meeting of the committee of creditors:
2
[Provided further that the first proviso shall not apply to a financial creditor, regulated by
a financial sector regulator, if it is a related party of the corporate debtor solely on account of
conversion or substitution of debt into equity shares or instruments convertible into
equity shares, prior to the insolvency commencement date.]
(3) 3
[Subject to sub-sections (6) and (6A), where] the corporate debtor owes financial
debts to two or more financial creditors as part of a consortium or agreement, each such
financial creditor shall be part of the committee of creditors and their voting share shall be
determined on the basis of the financial debts owed to them.
(4) Where any person is a financial creditor as well as an operational creditor, –
(a) such person shall be a financial creditor to the extent of the financial debt owed
by the corporate debtor, and shall be included in the committee of creditors, with voting
share proportionate to the extent of financial debts owed to such creditor;
(b) such person shall be considered to be an operational creditor to the extent of the
operational debt owed by the corporate debtor to such creditor.
(5) Where an operational creditor has assigned or legally transferred any operational
debt to a financial creditor, the assignee or transferee shall be considered as an operational
creditor to the extent of such assignment or legal transfer.
(6) Where the terms of the financial debt extended as part of a consortium arrangement
or syndicated facility 4
[***] provide for a single trustee or agent to act for all financial creditors, each financial creditor may-
(a) authorise the trustee or agent to act on his behalf in the committee of creditors
to the extent of his voting share;
(b) represent himself in the committee of creditors to the extent of his voting share;
(c) appoint an insolvency professional (other than the resolution professional) at
his own cost to represent himself in the committee of creditors to the extent of his voting
share; or
(d) exercise his right to vote to the extent of his voting share with one or more
financial creditors jointly or severally.

1
[ (6A) Where a financial debt—
(a) is in the form of securities or deposits and the terms of the financial debt
provide for appointment of a trustee or agent to act as authorised representative for
all the financial creditors, such trustee or agent shall act on behalf of such
financial creditors;
(b) is owed to a class of creditors exceeding the number as may be specified, other
than the creditors covered under clause (a) or sub-section (6), the interim resolution
professional shall make an application to the Adjudicating Authority along with the list
of all financial creditors, containing the name of an insolvency professional,
other than the interim resolution professional, to act as their authorised
representative who shall be appointed by the Adjudicating Authority prior to the first
meeting of the committee of creditors;
(c) is represented by a guardian, executor or administrator, such person shall act as
authorised representative on behalf of such financial creditors,
and such authorised representative under clause (a) or clause (b) or clause (c) shall
attend the meetings of the committee of creditors, and vote on behalf of each
financial creditor to the extent of his voting share.
(6B) The remuneration payable to the authorised representative-
(i) under clauses (a) and (c) of sub-section (6A), if any, shall be as per the
terms of the financial debt or the relevant documentation; and
(ii) under clause (b) of sub-section (6A) shall be as specified which shall be
form part of the insolvency resolution process costs.]
2
[(7) The Board may specify the manner of voting and the determining of the voting
share in respect of financial debts covered under sub-sections (6) and (6A). (8) Save as otherwise provided in this Code, all decisions of the committee of creditors
shall be taken by a vote of not less than fifty-one per cent. of voting share of the financial
creditors:
Provided that where a corporate debtor does not have any financial
creditors, the committee of creditors shall be constituted and shall comprise
of such persons to exercise such functions in such manner as may be
specified.]
(9) The committee of creditors shall have the right to require the
resolution professional to furnish any financial information in relation to the
corporate debtor at any time during the corporate insolvency resolution
process.
(10) The resolution professional shall make available any financial
information so required by the committee of creditors under sub-section (9)
within a period of seven days of such requisition” VL Note : –

“(1) The first meeting of the committee of creditors shall be held within seven days of
the constitution of the committee of creditors.
(2) The committee of creditors, may, in the first meeting, by a majority vote of not less
than sixty-six per cent. of the voting share of the financial creditors, either resolve to
appoint the interim resolution professional as a resolution professional or to replace the
interim resolution professional by another resolution professional.
(3) Where the committee of creditors resolves under sub-section (2)-
(a) to continue the interim resolution professional as resolution professional subject to a written consent from the interim resolution professional in the specified
form, it shall communicate its decision to the interim resolution professional, the
corporate debtor and the Adjudicating Authority; or
(b) to replace the interim resolution professional, it shall file an application before
the Adjudicating Authority for the appointment of the proposed resolution professional along with a written consent from the proposed resolution professional in the specified
form.
(4) The Adjudicating Authority shall forward the name of the resolution professional
proposed under clause (b) of sub-section (3) to the Board for its confirmation and shall make such appointment after confirmation by the Board.
(5) Where the Board does not confirm the name of the proposed resolution professional
within ten days of the receipt of the name of the proposed resolution professional, the
Adjudicating Authority shall, by order, direct the interim resolution professional to
continue to function as the resolution professional until such time as the Board confirms
the appointment of the proposed resolution professional. ” VL Note : –

“(1) Subject to section 27, the resolution professional shall conduct the entire corporate
insolvency resolution process and manage the operations of the corporate debtor during
the corporate insolvency resolution process period:
1
[Provided that the resolution professional shall, if the resolution plan under sub-section (6) of
section 30 has been submitted, continue to manage the operations of the corporate debtor after
the expiry of the corporate insolvency resolution process period until an order is passed by
the Adjudicating Authority under section 31.]
(2) The resolution professional shall exercise powers and perform duties as are vested
or conferred on the interim resolution professional under this Chapter.
(3) In case of any appointment of a resolution professional under sub-sections (4) of
section 22, the interim resolution professional shall provide all the information, documents
and records pertaining to the corporate debtor in his possession and knowledge to the
resolution professional. ” VL Note : –

“(1) The members of the committee of creditors may meet in person or by such other
electronic means as may be specified.
(2) All meetings of the committee of creditors shall be conducted by the resolution
professional.
(3) The resolution professional shall give notice of each meeting of the committee of
creditors to-
(a) members of 2
[committee of creditors, including the authorised representatives
referred to in sub-sections (6) and (6A) of section 21 and sub-section (5)];
(b) members of the suspended Board of Directors or the partners of the corporate
persons, as the case may be;
(c) operational creditors or their representatives if the amount of their aggregate dues is not less than ten per cent. of the debt.
(4) The directors, partners and one representative of operational creditors, as referred
to in sub-section (3), may attend the meetings of committee of creditors, but shall not have
any right to vote in such meetings:
Provided that the absence of any such director, partner or representative of operational
creditors, as the case may be, shall not invalidate proceedings of such meeting.
(5) 1
[Subject to sub-sections (6), (6A) and (6B) of section 21, any creditor] who is a member
of the committee of creditors may appoint an insolvency professional other than the
resolution professional to represent such creditor in a meeting of the committee of
creditors:
Provided that the fees payable to such insolvency professional representing any
individual creditor will be borne by such creditor.
(6) Each creditor shall vote in accordance with the voting share assigned to him based on
the financial debts owed to such creditor.
(7) The resolution professional shall determine the voting share to be assigned to each
creditor in the manner specified by the Board.
(8) The meetings of the committee of creditors shall be conducted in such manner as may
be specified” VL Note : –

“(1) It shall be the duty of the resolution professional to preserve and protect the assets
of the corporate debtor, including the continued business operations of the corporate
debtor.
(2) For the purposes of sub-section (1), the resolution professional shall undertake the
following actions, namely: –
(a) take immediate custody and control of all the assets of the corporate debtor,
including the business records of the corporate debtor;
(b) represent and act on behalf of the corporate debtor with third parties, exercise
rights for the benefit of the corporate debtor in judicial, quasi-judicial or arbitration
proceedings;
(c) raise interim finances subject to the approval of the committee of creditors under
section 28;
(d) appoint accountants, legal or other professionals in the manner as specified by
Board;
(e) maintain an updated list of claims;
(f) convene and attend all meetings of the committee of creditors;
(g) prepare the information memorandum in accordance with section 29;
1
[(h) invite prospective resolution applicants, who fulfil such criteria as may be laid
down by him with the approval of committee of creditors, having regard to the
complexity and scale of operations of the business of the corporate debtor and such
other conditions as may be specified by the Board, to submit a resolution plan or plans.]
(i) present all resolution plans at the meetings of the committee of creditors;
(j) file application for avoidance of transactions in accordance with Chapter
III, if any; and
(k) such other actions as may be specified by the Board. 2
[25A. Rights and duties of authorised representative of financial creditors. –
(1) The authorised representative under sub-section (6) or sub-section (6A) of section
21 or sub-section (5) of section 24 shall have the right to participate and vote in meetings
of the committee of creditors on behalf of the financial creditor he represents in accordance
with the prior voting instructions of such creditors obtained through physical or electronic
means.
(2) It shall be the duty of the authorised representative to circulate the agenda and
minutes of the meeting of the committee of creditors to the financial creditor he represents.
(3) The authorised representative shall not act against the interest of the financial
creditor he represents and shall always act in accordance with their prior instructions:
Provided that if the authorised representative represents several financial creditors, then
he shall cast his vote in respect of each financial creditor in accordance with instructions
received from each financial creditor, to the extent of his voting share:
Provided further that if any financial creditor does not give prior instructions through
physical or electronic means, the authorised representative shall abstain from voting on
behalf of such creditor.
3
[(3A) Notwithstanding anything to the contrary contained in sub-section (3), the
authorised representative under sub-section (6A) of section 21 shall cast his vote on behalf
of all the financial creditors he represents in accordance with the decision taken by a vote of more than fifty per cent. of the voting share of the financial creditors he represents, who
have cast their vote:
Provided that for a vote to be cast in respect of an application under section 12A, the
authorised representative shall cast his vote in accordance with the provisions of subsection (3).]
(4) The authorised representative shall file with the committee of creditors any
instructions received by way of physical or electronic means, from the financial creditor
he represents, for voting in accordance therewith, to ensure that the appropriate voting
instructions of the financial creditor he represents is correctly recorded by the interim
resolution professional or resolution professional, as the case may be.
Explanation.- For the purposes of this section, the “electronic means” shall be such as
may be specified.]
” VL Note : –

“The filing of an avoidance application under clause (j) of sub-section (2) of section 25
by the resolution professional shall not affect the proceedings of the corporate insolvency
resolution process.” VL Note : –

“(1) Where, at any time during the corporate insolvency resolution process, the
committee or creditors is of the opinion that a resolution professional appointed under
section 22 is required to be replaced, it may replace him with another resolution
professional in the manner provided under this section.
1
[(2) The committee of creditors may, at a meeting, by a vote of sixty-six per cent of
voting shares, resolve to replace the resolution professional appointed under section 22
with another resolution professional, subject to a written consent from the proposed
resolution professional in the specified form.]
(3) The committee of creditors shall forward the name of the insolvency professional
proposed by them to the Adjudicating Authority.
(4) The Adjudicating Authority shall forward the name of the proposed resolution
professional to the Board for its confirmation and a resolution professional shall be
appointed in the same manner as laid down in section 16.
(5) Where any disciplinary proceedings are pending against the proposed resolution professional under sub-section (3), the resolution professional appointed under section 22
shall continue till the appointment of another resolution professional under this section.” VL Note : –

“(1) Notwithstanding anything contained in any other law for the time being in force,
the resolution professional, during the corporate insolvency resolution process, shall not
take any of the following actions without the prior approval of the committee of creditors
namely: –
(a) raise any interim finance in excess of the amount as may be decided by the
committee of creditors in their meeting;
(b) create any security interest over the assets of the corporate debtor;
(c) change the capital structure of the corporate debtor, including by way of
issuance of additional securities, creating a new class of securities or buying back or
redemption of issued securities in case the corporate debtor is a company;
(d) record any change in the ownership interest of the corporate debtor;
(e) give instructions to financial institutions maintaining accounts of the corporate
debtor for a debit transaction from any such accounts in excess of the amount as may
be decided by the committee of creditors in their meeting;
(f) undertake any related party transaction;
(g) amend any constitutional documents of the corporate debtor;
(h) delegate its authority to any other person;
(i) dispose of or permit the disposal of shares of any shareholder of the corporate
debtor or their nominees to third parties;
(j) make any change in the management of the corporate debtor or its subsidiary;
(k) transfer rights or financial debts or operational debts under material contracts
otherwise than in the ordinary course of business;
(l) make changes in the appointment or terms of contract of such personnel as
specified by the committee of creditors; or
(m) make changes in the appointment or terms of contract of statutory auditors or
internal auditors of the corporate debtor.
(2) The resolution professional shall convene a meeting of the committee of creditors
and seek the vote of the creditors prior to taking any of the actions under sub-section (1).
(3) No action under sub-section (1) shall be approved by the committee of creditors unless approved by a vote of 1
[sixty-six] per cent. of the voting shares.
(4) Where any action under sub-section (1) is taken by the resolution professional
without seeking the approval of the committee of creditors in the manner as required in
this section, such action shall be void.
(5) The committee of creditors may report the actions of the resolution professional
under sub-section (4) to the Board for taking necessary actions against him under this code” VL Note : –

“(1) The resolution professional shall prepare an information memorandum in such form
and manner containing such relevant information as may be specified by the Board for
formulating a resolution plan.
(2) The resolution professional shall provide to the resolution applicant access to all
relevant information in physical and electronic form, provided such resolution applicant
undertakes-
(a) to comply with provisions of law for the time being in force relating to
confidentiality and insider trading;
(b) to protect any intellectual property of the corporate debtor it may have access
to; and
(c) not to share relevant information with third parties unless clauses (a) and (b) of
this sub-section are complied with.
Explanation. – For the purposes of this section, “relevant information” means the
information required by the resolution applicant to make the resolution plan for the
corporate debtor, which shall include the financial position of the corporate debtor, all
information related to disputes by or against the corporate debtor and any other matter
pertaining to the corporate debtor as may be specified.
2
[29A. Persons not eligible to be resolution applicant. –
A person shall not be eligible to submit a resolution plan, if such person, or any other
person acting jointly or in concert with such person—
(a) is an undischarged insolvent;
(b) is a wilful defaulter in accordance with the guidelines of the Reserve Bank of
India issued under the Banking Regulation Act, 1949 (10 of 1949);
(c) 3
[at the time of submission of the resolution plan has an account,] or an account of
a corporate debtor under the management or control of such person or of whom such person is a promoter, classified as non-performing asset in accordance with the
guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949
(10 of 1949) 1
[or the guidelines of a financial sector regulator issued under any other law
for the time being in force,] and at least a period of one year has lapsed from the date of
such classification till the date of commencement of the corporate insolvency resolution
process of the corporate debtor:
Provided that the person shall be eligible to submit a resolution plan if such person
makes payment of all overdue amounts with interest thereon and charges relating to nonperforming asset accounts before submission of resolution plan:
2
[Provided further that nothing in this clause shall apply to a resolution applicant where such
applicant is a financial entity and is not a related party to the corporate debtor.
Explanation I.- For the purposes of this proviso, the expression “”related party”” shall not
include a financial entity, regulated by a financial sector regulator, if it is a financial creditor of
the corporate debtor and is a related party of the corporate debtor solely on account of conversion
or substitution of debt into equity shares or instruments convertible into equity shares, prior to the
insolvency commencement date.
Explanation II.— For the purposes of this clause, where a resolution applicant has an account,
or an account of a corporate debtor under the management or control of such person or of whom such
person is a promoter, classified as non-performing asset and such account was acquired
pursuant to a prior resolution plan approved under this Code, then, the provisions of this
clause shall not apply to such resolution applicant for a period of three years from the
date of approval of such resolution plan by the Adjudicating Authority under this
Code;]
3
[(d) has been convicted for any offence punishable with imprisonment –
(i) for two years or more under any Act specified under the Twelfth Schedule; or
(ii) for seven years or more under any law for the time being in force:
Provided that this clause shall not apply to a person after the expiry of a period of two
years from the date of his release from imprisonment:
Provided further that this clause shall not apply in relation to a connected person referred
to in clause(iii) of Explanation I];
(e) is disqualified to act as a director under the Companies Act, 2013 (18 of 2013):
1
[Provided that this clause shall not apply in relation to a connected person referred
to in clause (iii) of Explanation I;]
(f) is prohibited by the Securities and Exchange Board of India from trading in
securities or accessing the securities markets;
(g) has been a promoter or in the management or control of a corporate debtor in
which a preferential transaction, undervalued transaction, extortionate credit transaction
or fraudulent transaction has taken place and in respect of which an order has been made
by the Adjudicating Authority under this Code:
2
[Provided that this clause shall not apply if a preferential transaction, undervalued
transaction, extortionate credit transaction or fraudulent transaction has taken place prior to
the acquisition of the corporate debtor by the resolution applicant pursuant to a resolution
plan approved under this Code or pursuant to a scheme or plan approved by a financial
sector regulator or a court, and such resolution applicant has not otherwise contributed to the
preferential transaction, undervalued transaction, extortionate credit transaction or
fraudulent transaction;]
(h) has executed 3
[a guarantee] in favour of a creditor in respect of a corporate
debtor against which an application for insolvency resolution made by such creditor has
been admitted under this Code 4
[and such guarantee has been invoked by the creditor and remains
unpaid in full or part];
(i) 5
[is] subject to any disability, corresponding to clauses (a) to (h), under any law
in a jurisdiction outside India; or
(j) has a connected person not eligible under clauses (a) to (i).
Explanation6
[I]. — For the purposes of this clause, the expression “”connected person””
means—
(i) any person who is the promoter or in the management or control of the resolution
applicant; or
(ii) any person who shall be the promoter or in management or control of the
business of the corporate debtor during the implementation of the resolution plan; or
(iii) the holding company, subsidiary company, associate company or related party
of a person referred to in clauses (i) and (ii):
1
[Provided that nothing in clause (iii) of Explanation I shall apply to a resolution applicant
where such applicant is a financial entity and is not a related party of the corporate debtor:
Provided further that the expression “”related party”” shall not include a financial entity,
regulated by a financial sector regulator, if it is a financial creditor of the corporate debtor and
is a related party of the corporate debtor solely on account of conversion or substitution of debt
into equity shares or instruments convertible into equity shares, prior to the insolvency
commencement date;]
2
[Explanation II—For the purposes of this section, “”financial entity”” shall mean the
following entities which meet such criteria or conditions as the Central Government may, in
consultation with the financial sector regulator, notify in this behalf, namely:—
(a) a scheduled bank;
(b) any entity regulated by a foreign central bank or a securities market
regulator or other financial sector regulator of a jurisdiction outside India which
jurisdiction is compliant with the Financial Action Task Force Standards and is a
signatory to the International Organisation of Securities Commissions Multilateral
Memorandum of Understanding;
(c) any investment vehicle, registered foreign institutional investor, registered
foreign portfolio investor or a foreign venture capital investor, where the terms
shall have the meaning assigned to them in regulation 2 of the Foreign Exchange
Management (Transfer or Issue of Security by a Person Resident Outside India)
Regulations, 2017 made under the Foreign Exchange Management Act, 1999 (42
of 1999);
(d) an asset reconstruction company register with the Reserve Bank of India
under section 3 of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (54 of 2002);
(e) an Alternate Investment Fund registered with Securities and Exchange
Board of India;
(f) such categories of persons as may be notified by the Central Government.]” VL Note : –

“(1) A resolution applicant may submit a resolution plan 1
[along with an affidavit stating
that he is eligible under section 29A] to the resolution professional prepared on the basis of
the information memorandum.
(2) The resolution professional shall examine each resolution plan received by him to
confirm that each resolution plan –
(a) provides for the payment of insolvency resolution process costs in a manner
specified by the Board in priority to the 2
[payment] of other debts of the corporate
debtor;
3
[(b) provides for the payment of debts of operational creditors in such manner as
may be specified by the Board which shall not be less than-
(i) the amount to be paid to such creditors in the event of a liquidation of the
corporate debtor under section 53; or
(ii) the amount that would have been paid to such creditors, if the amount to
be distributed under the resolution plan had been distributed in accordance with the
order of priority in sub-section (1) of section 53,
whichever is higher, and provides for the payment of debts of financial creditors, who do not
vote in favour of the resolution plan, in such manner as may be specified by the Board, which
shall not be less than the amount to be paid to such creditors in accordance with sub-section
(1) of section 53 in the event of a liquidation of the corporate debtor.
Explanation 1. — For removal of doubts, it is hereby clarified that a distribution in
accordance with the provisions of this clause shall be fair and equitable to such creditors.
Explanation 2. — For the purpose of this clause, it is hereby declared that on and from
the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019,
the provisions of this clause shall also apply to the corporate insolvency resolution process of
a corporate debtor-
(i) where a resolution plan has not been approved or rejected by the Adjudicating
Authority;
(ii) where an appeal has been preferred under section 61 or section 62 or such an
appeal is not time barred under any provision of law for the time being in force; or (iii) where a legal proceeding has been initiated in any court against the decision of
the Adjudicating Authority in respect of a resolution plan;]
(c) provides for the management of the affairs of the Corporate debtor after
approval of the resolution plan;
(d) The implementation and supervision of the resolution plan;
(e) does not contravene any of the provisions of the law for the time being in force
(f) confirms to such other requirements as may be specified by the Board.
1
[Explanation. — For the purposes of clause (e), if any approval of shareholders is required under
the Companies Act, 2013(18 of 2013) or any other law for the time being in force for the
implementation of actions under the resolution plan, such approval shall be deemed to have been given
and it shall not be a contravention of that Act or law.]
(3) The resolution professional shall present to the committee of creditors for its
approval such resolution plans which confirm the conditions referred to in sub-section (2).
2
[(4) The committee of creditors may approve a resolution plan by a vote of not less
than 3
[sixty-six] per cent. of voting share of the financial creditors, after considering its
feasibility and viability, 4
[the manner of distribution proposed, which may take into
account the order of priority amongst creditors as laid down in sub-section (1) of section
53, including the priority and value of the security interest of a secured creditor] and such
other requirements as may be specified by the Board:
Provided that the committee of creditors shall not approve a resolution plan, submitted
before the commencement of the Insolvency and Bankruptcy Code (Amendment)
Ordinance, 2017 (Ord. 7 of 2017), where the resolution applicant is ineligible under section
29A and may require the resolution professional to invite a fresh resolution plan where no
other resolution plan is available with it:
Provided further that where the resolution applicant referred to in the first proviso is
ineligible under clause (c) of section 29A, the resolution applicant shall be allowed by the
committee of creditors such period, not exceeding thirty days, to make payment of overdue
amounts in accordance with the proviso to clause (c) of section 29A:
Provided also that nothing in the second proviso shall be construed as extension of
period for the purposes of the proviso to sub-section (3) of section 12, and the corporate
insolvency resolution process shall be completed within the period specified in that sub section]:
1
[Provided also that the eligibility criteria in section 29A as amended by the Insolvency and
Bankruptcy Code (Amendment) Ordinance, 2018 shall apply to the resolution applicant who has
not submitted resolution plan as on the date of commencement of the Insolvency and Bankruptcy
Code (Amendment) Ordinance, 2018.]
(5) The resolution applicant may attend the meeting of the committee of creditors in
which the resolution plan of the applicant is considered:
Provided that the resolution applicant shall not have a right to vote at the meeting of
the committee of creditors unless such resolution applicant is also a financial creditor.
(6) The resolution professional shall submit the resolution plan as approved by the
committee of creditors to the Adjudicating Authority” VL Note : –

“(1) If the Adjudicating Authority is satisfied that the resolution plan as approved by
the committee of creditors under sub-section (4) of section 30 meets the requirements as
referred to in sub-section (2) of section 30, it shall by order approve the resolution plan
which shall be binding on the corporate debtor and its employees, members, creditors,
2
[including the Central Government, any State Government or any local authority to whom
a debt in respect of the payment of dues arising under any law for the time being in force,
such as authorities to whom statutory dues are owed,] guarantors and other stakeholders
involved in the resolution plan.
3
[Provided that the Adjudicating Authority shall, before passing an order for approval of
resolution plan under this sub-section, satisfy that the resolution plan has provisions for its
effective implementation.]
(2) Where the Adjudicating Authority is satisfied that the resolution plan does not
confirm to the requirements referred to in sub-section (1), it may, by an order, reject the
resolution plan.
(3) After the order of approval under sub-section (1), –
(a) the moratorium order passed by the Adjudicating Authority under section 14
shall cease to have effect; and
(b) the resolution professional shall forward all records relating to the conduct of
the corporate insolvency resolution process and the resolution plan to the Board to be
recorded on its database 1
[(4) The resolution applicant shall, pursuant to the resolution plan approved under sub-section
(1), obtain the necessary approval required under any law for the time being in force within a period
of one year from the date of approval of the resolution plan by the Adjudicating Authority under
sub-section (1) or within such period as provided for in such law, whichever is later:
Provided that where the resolution plan contains a provision for combination, as referred to in
section 5 of the Competition Act, 2002, the resolution applicant shall obtain the approval of the
Competition Commission of India under that Act prior to the approval of such resolution plan by the
committee of creditors.]” VL Note : –

“Any appeal from an order approving the resolution plan shall be in the manner and on
the grounds laid down in sub-section (3) of section 61″ VL Note : –