Resolution Plan

(1) Fair value and liquidation value shall be determined in the following manner: (a) the two registered valuers appointed under regulation 27 shall submit to the resolution professional an estimate of the fair value and of the liquidation value computed in accordance with internationally accepted valuation standards, after physical verification of the inventory and fixed assets of the corporate debtor; (b) if in the opinion of the resolution professional, the two estimates of a value are significantly different, he may appoint another registered valuer who shall submit an estimate of the value computed in the same manner; and (c) the average of the two closest estimates of a value shall be considered the fair value or the liquidation value, as the case may be. (2) After the receipt of resolution plans in accordance with the Code and these regulations, the resolution professional shall provide the fair value and the liquidation value to every member of the committee in electronic form, on receiving an undertaking from the member to the effect that such member shall maintain confidentiality of the fair value and the liquidation value and shall not use such values to cause an undue gain or undue loss to itself or any other person and comply with the requirements under sub-section (2) of section 29: (3) The resolution professional and registered valuers shall maintain confidentiality of the fair value and the liquidation value.

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(1) On or before the seventy-fifth day of the insolvency commencement date, the resolution professional shall form an opinion whether the corporate debtor has been subjected to any transaction covered under sections 43, 45, 50 or 66. (2) Where the resolution professional is of the opinion that the corporate debtor has been subjected to any transactions covered under sections 43, 45, 50 or 66, he shall make a determination on or before the one hundred and fifteenth day of the insolvency commencement date, under intimation to the Board. (3) Where the resolution professional makes a determination under sub-regulation (2), he shall apply to the Adjudicating Authority for appropriate relief on or before the one hundred and thirty-fifth day of the insolvency commencement date.

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(1) Subject to sub-regulation (4), the resolution professional shall submit the information memorandum in electronic form to each member of the committee within two weeks of his appointment, but not later than fifty-fourth day from the insolvency commencement date, whichever is earlier; (2) The information memorandum shall contain the following details of the corporate debtor-                         (a) assets and liabilities with such description, as on the insolvency commencement date, as are generally necessary for ascertaining their values.                           Explanation: ‘Description’ includes the details such as date of acquisition, cost of acquisition, remaining useful life, identification number, depreciation charged, book value, and any other relevant details.                         (b) the latest annual financial statements;                         (c) audited financial statements of the corporate debtor for the last two financial years and provisional financial statements for the current financial year made up to a date not earlier than fourteen days from the date of the application;                         (d) a list of creditors containing the names of creditors, the amounts claimed by them, the amount of their claims admitted and the security interest, if any, in respect of such claims;                         (e) particulars of a debt due from or to the corporate debtor with respect to related parties;                         (f) details of guarantees that have been given in relation to the debts of the corporate debtor by other persons, specifying which of the guarantors is a related party;                         (g) the names and addresses of the members or partners holding at least one per cent stake in the corporate debtor along with the size of stake;                         (h) details of all material litigation and an ongoing investigation or proceeding initiated by Government and statutory authorities;                         (i) the number of workers and employees and liabilities of the corporate debtor towards them;                         (j) 45[***]                         (k) 46[***]                         (l) other information, which the resolution professional deems relevant to the committee. (3) A member of the committee may request the resolution professional for further information of the nature described in this Regulation and the resolution professional shall provide such information to all members within reasonable time if such information has a bearing on the resolution plan. (4) The resolution professional shall share the information memorandum after receiving an undertaking from a member of the committee to the effect that such member or resolution applicant shall maintain confidentiality of the information and shall not use such information to cause an undue gain or undue loss to itself or any other person and comply with the requirements under sub-section (2) of section 29.

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(1) The resolution professional shall publish brief particulars of the invitation for expression of interest in Form G of the Schedule at the earliest, not later than seventy-fifth day from the insolvency commencement date, from interested and eligible prospective resolution applicants to submit resolution plans. (2) The resolution professional shall publish Form G- (i) in one English and one regional language newspaper with wide circulation at the location of the registered office and principal office, if any, of the corporate debtor and any other location where in the opinion of the resolution professional, the corporate debtor conducts material business operations; (ii) on the website, if any, of the corporate debtor; (iii) on the website, if any, designated by the Board for the purpose; and (iv) in any other manner as may be decided by the committee. (3) The Form G in the Schedule shall – (a) state where the detailed invitation for expression of interest can be downloaded or obtained from, as the case may be; and (b) provide the last date for submission of expression of interest which shall not be less than fifteen days from the date of issue of detailed invitation. (4) The detailed invitation referred to in sub-regulation (3) shall- (a) specify the criteria for prospective resolution applicants, as approved by the committee in accordance with clause (h) of sub-section (2) of section 25; (b) state the ineligibility norms under section 29A to the extent applicable for prospective resolution applicants; (c) provide such basic information about the corporate debtor as may be required by a prospective resolution applicant for expression of interest; and (d) not require payment of any fee or any non-refundable deposit for submission of expression of interest. (5) A prospective resolution applicant, who meet the requirements of the invitation for expression of interest, may submit expression of interest within the time specified in the invitation under clause (b) of sub-regulation (3).                         (6) The expression of interest received after the time specified in the invitation under clause (b) of sub-regulation (3) shall be rejected.                           (7) An expression of interest shall be unconditional and be accompanied by-                         (a) an undertaking by the prospective resolution applicant that it meets the criteria specified by the committee under clause (h) of sub-section (2) of section 25;                         (b) relevant records in evidence of meeting the criteria under clause (a);                         (c) an undertaking by the prospective resolution applicant that it does not suffer from any ineligibility under section 29A to the extent applicable;                         (d) relevant information and records to enable an assessment of ineligibility under clause (c);                         (e) an undertaking by the prospective resolution applicant that it shall intimate the resolution professional forthwith if it becomes ineligible at any time during the corporate insolvency resolution process;                         (f) an undertaking by the prospective resolution applicant that every information and records provided in expression of interest is true and correct and discovery of any false information or record at any time will render the applicant ineligible to submitresolution plan, forfeit any refundable deposit, and attract penal action under the Code; and                         (g) an undertaking by the prospective resolution applicant to the effect that it shall maintain confidentiality of the information and shall not use such information to cause an undue gain or undue loss to itself or any other person and comply with the requirements under sub-section (2) of section 29.                                                                             (8) The resolution professional shall conduct due diligence based on the material on record in order to satisfy that the prospective resolution applicant complies with-                         (a) the provisions of clause (h) of sub-section (2) of section 25;                         (b) the applicable provisions of section 29A, and                         (c) other requirements, as specified in the invitation for expression of interest.                                                   (9) The resolution professional may seek any clarification or additional information or document from the prospective resolution applicant for conducting due diligence under sub-regulation (8).                                                   (10) The resolution professional shall issue a provisional list of eligible prospective resolution applicants within ten days of the last date for submission of expression of interest to the committee and to all prospective resolution applicants who submitted the expression of interest.                                                   (11) Any objection to inclusion or exclusion of a prospective resolution applicant in the provisional list referred to in sub-regulation (10) may be made with supporting documents within five days from the date of issue of the provisional list.                                                   (12) On considering the objections received under sub-regulation (11), the resolution professional shall issue the final list of prospective resolution applicants within ten days of the last date for receipt of objections, to the committee.

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(1) The resolution professional shall issue the information memorandum, evaluation matrix and a request for resolution plans, within five days of the date of issue of the provisional list under sub-regulation (10) of regulation 36A to – (a) every prospective resolution applicant in the provisional list; and (b) every prospective resolution applicant who has contested the decision of the resolution professional against its non-inclusion in the provisional list. (2) The request for resolution plans shall detail each step in the process, and the manner and purposes of interaction between the resolution professional and the prospective resolution applicant, along with corresponding timelines. (3) The request for resolution plans shall allow prospective resolution applicants a minimum of thirty days to submit the resolution plan(s). (4) The request for resolution plans shall not require any non-refundable deposit for submission of or along with resolution plan. (4A) The request for resolution plans shall require the resolution applicant, in case its resolution plan is approved under sub-section (4) of section 30, to provide a performance security within the time specified therein and such performance security shall stand forfeited if the resolution applicant of such plan, after its approval by the Adjudicating Authority, fails to implement or contributes to the failure of implementation of that plan in accordance with the terms of the plan and its implementation schedule. Explanation I. – For the purposes of this sub-regulation, “performance security” shall mean security of such nature, value, duration and source, as may be specified in the request for resolution plans with the approval of the committee, having regard to the nature of resolution plan and business of the corporate debtor. Explanation II. – A performance security may be specified in absolute terms such as guarantee from a bank for Rs. X for Y years or in relation to one or more variables such as the term of the resolution plan, amount payable to creditors under the resolution plan, etc. (5) Any modification in the request for resolution plan or the evaluation matrix issued under sub-regulation (1), shall be deemed to be a fresh issue and shall be subject to timeline under sub-regulation (3). (6) The resolution professional may, with the approval of the committee, extend the timeline for submission of resolution plans. (7) The resolution professional may, with the approval of the committee, re-issue request for resolution plans, if the resolution plans received in response to an earlier request are not satisfactory, subject to the condition that the request is made to all prospective resolution applicants in the final list: Provided that provisions of sub-regulation (3) shall not apply for submission of resolution plans under this sub-regulation.

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A resolution plan shall provide for the measures, as may be necessary, for insolvency resolution of the corporate debtor for maximization of value of its assets, including but not limited to the following:- (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; (ca) cancellation or delisting of any shares of the corporate debtor, if applicable;] (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;                         (i) issuance of securities of the corporate debtor, for cash, property, securities, or in exchange for claims or interests, or other appropriate purpose;                         (j) change in portfolio of goods or services produced or rendered by the corporate debtor;                         (k) change in technology used by the corporate debtor; and                         (l) obtaining necessary approvals from the Central and State Governments and other authorities. (h) amendment of the constitutional documents of the corporate debtor;

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(1)The amount due to the operational creditors under a resolution plan shall be given priority in payment over financial creditors. (1A) A resolution plan shall include a statement as to how it has dealt with the interests of allstakeholders, including financial creditors and operational creditors, of the corporate debtor. (1B) A resolution plan shall include a statement giving details if the resolution applicant or any of its related parties has failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in the past. (2) 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                           (3)A resolution plan shall demonstrate that –                         (a) it addresses the cause of default;                         (b) it is feasible and viable;                         (c) it has provisions for its effective implementation;                         (d) it has provisions for approvals required and the timeline for the same; and                         (e) the resolution applicant has the capability to implement the resolution plan.

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(1) A prospective resolution applicant in the final list may submit resolution plan or plans prepared in accordance with the Code and these regulations to the resolution professional electronically within the time given in the request for resolution plans under regulation 36B along with                         (a) an affidavit stating that it is eligible under section 29A to submit resolution plans;                         (B) ** **                         (c) an undertaking by the prospective resolution applicant that every information and records provided in connection with or in the resolution plan is true and correct and discovery of false information and record at any time will render the applicant ineligible to continue in the corporate insolvency resolution process, forfeit any refundable deposit, and attract penal action under the Code.                           (1A) A resolution plan which does not comply with the provisions of sub-regulation (1) shall be rejected. (2) 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 transactions, if any, observed, found or determined by him: –                         (a) preferential transactions under section 43;                         (b) undervalued transactions under section 45;                         (c) extortionate credit transactions under section 50; and                         (d) fraudulent transactions under section 66, and the orders, if any, of the adjudicating authority in respect of such transactions. (3) The committee shall evaluate the resolution plans received under sub-regulation (1) strictly as per the evaluation matrix to identify the best resolution plan and may approve it with such modifications as it deems fit: Provided that the committee shall record its deliberations on the feasibility and viability of the resolution plans. (4) The resolution professional shall endeavour to submit the resolution plan approved by the committee to the Adjudicating Authority at least fifteen days before the maximum period for completion of corporate insolvency resolution process under section 12, along with a compliance certificate in Form H of the Schedule and the evidence of receipt of performance security required under sub-regulation (4A) of regulation 36B. (5) The resolution professional shall forthwith send a copy of the order of the Adjudicating Authority approving or rejecting a resolution plan to the participants and the resolution applicant. (6) A provision in a resolution plan which would otherwise require the consent of the members or partners of the corporate debtor, as the case may be, under the terms of the constitutional documents of the corporate debtor, shareholders’ agreement, joint venture agreement or other document of a similar nature, shall take effect notwithstanding that such consent has not been obtained. (7) No proceedings shall be initiated against the interim resolution professional or the resolution professional, as the case may be, for any actions of the corporate debtor, prior to the insolvency commencement date. (8) A person in charge of the management or control of the business and operations of the corporate debtor after a resolution plan is approved by the Adjudicating Authority, may make an application to the Adjudicating Authority for an order seeking the assistance of the local district administration in implementing the terms of a resolution plan. (9) A creditor, who is aggrieved by non-implementation of a resolution plan approved under sub-section (1) of section 31, may apply to the Adjudicating Authority for directions.

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The interim resolution professional or the resolution professional, as the case may be, shall preserve a physical as well as an electronic copy of the records relating to corporate insolvencyresolution process of the corporate debtor as per the record retention schedule as may be communicated by the Board in consultation with Insolvency Professional Agencies.
(1) While approving a resolution plan under sub-section (4) of section 30 or deciding to liquidate the corporate debtor under sub-section (2) of section 33, the committee may make a best estimate of the amount required to meet liquidation costs, in consultation with the resolution professional, in the event an order for liquidation is passed under section 33. (2) The committee shall make a best estimate of the value of the liquid assets available to meet the liquidation costs, as estimated in sub-regulation (1). (3) Where the estimated value of the liquid assets under sub-regulation (2) is less than the estimated liquidation costs under sub-regulation (1), the committee shall approve a plan providing for contribution for meeting the difference between the two. (4) The resolution professional shall submit the plan approved under sub-regulation (3) to the Adjudicating Authority while filing the approval or decision of the committee under section 30 or 33, as the case may be. Explanation.- For the purposes of this regulation, ‘liquidation costs’ shall have the same meaning as assigned to it in clause (ea) of sub-regulation (1) of regulation (2) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

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(1) While approving a resolution plan under section 30 or deciding to liquidate the corporate debtor under section 33, the committee may recommend that the liquidator may first explore sale of the corporate debtor as a going concern under clause (e) of regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 or sale of the business of the corporate debtor as a going concern under clause (f) thereof, if an order for liquidation is passed under section 33. (2) Where the committee recommends sale as a going concern, it shall identify and group the assets and liabilities, which according to its commercial considerations, ought to be sold as a going concern under clause (e) or clause (f) of regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. (3) The resolution professional shall submit the recommendation of the committee under sub-regulations (1) and (2) to the Adjudicating Authority while filing the approval or decision of the committee under section 30 or 33, as the case may be.

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While approving a resolution plan under section 30 or deciding to liquidate the corporate debtor under section 33, the committee may, in consultation with the resolution professional, fix the fee payable to the liquidator, if an order for liquidation is passed under section 33, for –                         (a) the period, if any, used for compromise or arrangement under section 230 of the Companies Act, 2013;                         (b) the period, if any, used for sale under clauses (e) and (f) of regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016; and                         (c) the balance period of liquidation.

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(1) The committee may instruct the resolution professional to make an application to the Adjudicating Authority under section 12 to extend the insolvency resolution process period. (2) The resolution professional shall, on receiving an instruction from the committee under this Regulation, make an application to the Adjudicating Authority for such extension.

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The following Table presents a model timeline of corporate insolvency resolution process on the assumption that the interim resolution professional is appointed on the date of commencement of the process and the time available is hundred and eighty days:​  

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TABLE FOR REGULATION 40
Section / Regulation Description of Activity Norm Latest Timeline
Section 16(1) Commencement of CIRP and appointment of IRP …. T
Regulation 6(1) Public announcement inviting claims Within 3 Days of Appointment of IRP T+3
Section 15(1)(c) / Regulations 6(2)(c) and 12 (1) Submission of claims For 14 Days from Appointment of IRP T+14
Regulation 12(2) Submission of claims Up to 90th day of commencement T+90
Regulation 13(1) Verification of claims received under regulation 12(1) Within 7 days from the receipt of the claim T+21
Verification of claims received under regulation 12 (2) T+97
Section 21(6A) (b) / Regulation 16A Application for appointment of AR Within 2 days from verification of claims received under regulation 12(1) T+23
Regulation 17(1) Report certifying constitution of CoC T+23
Section 22(1) / Regulation 19(2) 1st meeting of the CoC Within 7 days of filing of the report certifying constitution of the CoC, but with five days’ notice. T+30
Section 22(2) Resolution to appoint RP by the CoC In the first meeting of the CoC T+30
Section 16(5) Appointment of RP On approval by the AA ……
Regulation 17(3) IRP performs the functions of RP till the RP is appointed. If RP is not appointed by 40th day of commencement T+40
Regulation 27 Appointment of valuer Within 7 days of appointment of RP, but not later than 47th day ofcommencement. T+47
Section 12(A) / Regulation 30A Submission of application for withdrawal of application admitted Before issue of EoI W
CoC to dispose of the application Within 7 days of its receipt or 7 days of constitution of CoC, whichever is later. W+7
Filing application of withdrawal, if approved by CoC with 90% majority voting, by RP to AA Within 3 days of approval by CoC W+10
Regulation 35A RP to form an opinion on preferential and other transactions Within 75 days of the commencement T+75
RP to make a determination on preferential and other transactions Within 115 days of commencement T+115
RP to file applications to AA for appropriate relief Within 135 days of commencement T+135
Regulation 36 (1) Submission of IM to CoC Within 2 weeks of appointment of RP, but not later than 54th day of commencement T+54
Regulation 36A Publish Form G Within 75 days of commencement T+75
Invitation of EoI
Submission of EoI At least 15 days from issue of EoI (Assume 15 days) T+90
Provisional List of RAs by RP Within 10 days from the last day of receipt of EoI T+100
Submission of objections to provisional list For 5 days from the date of provisional list T+105
Final List of RAs by RP Within 10 days of the receipt of objections T+115
Regulation 36B Issue of RFRP, including Evaluation Matrix and IM Within 5 days of the issue of the provisional list T+105
Receipt of Resolution Plans At least 30 days from issue of RFRP (Assume 30 days) T+135
Regulation 39(4) Submission of CoC approved Resolution Plan to AA As soon as approved by the CoC T+165
Section 31(1) Approval of resolution plan by AA T=180
T+97]
Section 21(6A) (b) / Regulation 16A Application for appointment of AR Within 2 days from verification of claims received under regulation 12(1) T+23
Regulation 17(1) Report certifying constitution of CoC T+23
Section 22(1) / Regulation 19(2) 1st meeting of the CoC Within 7 days of filing of the report certifying constitution of the CoC, but with five days’ notice. T+30
Section 22(2) Resolution to appoint RP by the CoC In the first meeting of the CoC T+30
Section 16(5) Appointment of RP On approval by the AA ……
Regulation 17(3) IRP performs the functions of RP till the RP is appointed. If RP is not appointed by 40th day of commencement T+40
Regulation 27 Appointment of valuer Within 7 days of appointment of RP, but not later than 47th day ofcommencement. T+47
Section 12(A) / Regulation 30A Submission of application for withdrawal of application admitted Before issue of EoI W
CoC to dispose of the application Within 7 days of its receipt or 7 days of constitution of CoC, whichever is later. W+7
Filing application of withdrawal, if approved by CoC with 90% majority voting, by RP to AA Within 3 days of approval by CoC W+10
Regulation 35A RP to form an opinion on preferential and other transactions Within 75 days of the commencement T+75
RP to make a determination on preferential and other transactions Within 115 days of commencement T+115
RP to file applications to AA for appropriate relief Within 135 days of commencement T+135
Regulation 36 (1) Submission of IM to CoC Within 2 weeks of appointment of RP, but not later than 54th day of commencement T+54
Regulation 36A Publish Form G Within 75 days of commencement T+75
Invitation of EoI
Submission of EoI At least 15 days from issue of EoI (Assume 15 days) T+90
Provisional List of RAs by RP Within 10 days from the last day of receipt of EoI T+100
Submission of objections to provisional list For 5 days from the date of provisional list T+105
Final List of RAs by RP Within 10 days of the receipt of objections T+115
Regulation 36B Issue of RFRP, including Evaluation Matrix and IM Within 5 days of the issue of the provisional list T+105
Receipt of Resolution Plans At least 30 days from issue of RFRP (Assume 30 days) T+135
Regulation 39(4) Submission of CoC approved Resolution Plan to AA As soon as approved by the CoC T+165
Section 31(1) Approval of resolution plan by AA T=180