In exercise of the powers conferred by clause t of sub section 1 of section 196 read with section 240 of the Insolvency and Bankruptcy

## Report on the Insolvency and Bankruptcy Board of India Insolvency Resolution Process for Corporate Persons Third Amendment Regulations, 2021 **1. Executive Summary:** This report analyzes the Insolvency and Bankruptcy Board of India (IBBI) Insolvency Resolution Process for Corporate Persons Third Amendment Regulations, 2021, based solely on the official gazette notification. This amendment, published on September 30, 2021, modifies the Insolvency Resolution Process for Corporate Persons Regulations, 2016. The key changes relate to the conduct of the committee of creditors, modifications to the invitation for expression of interest, modifications to the request for resolution plan, and the evaluation of resolution plans. These changes appear designed to provide greater clarity and efficiency in the corporate insolvency resolution process (CIRP). **2. Introduction:** The purpose of this report is to provide an informative overview of the Insolvency and Bankruptcy Board of India (IBBI) Insolvency Resolution Process for Corporate Persons Third Amendment Regulations, 2021. The analysis is based exclusively on the provided official gazette notification published on September 30, 2021. **3. Policy Overview:** * This is an *amendment* to the Insolvency and Bankruptcy Board of India Insolvency Resolution Process for Corporate Persons Regulations, 2016. * **Core Objective(s):** Based on the text, the core objective of the *amendment* appears to be to refine and improve the existing insolvency resolution process for corporate persons by introducing specific changes related to the committee of creditors, expression of interest, and resolution plan management. **4. Background and Rationale:** Since this document represents an amendment, the rationale lies in addressing perceived shortcomings or areas for improvement within the existing Insolvency Resolution Process for Corporate Persons Regulations, 2016. The specific issues addressed by this amendment, inferred from the text, include: * A need for guidelines to assist the committee of creditors and its members in fulfilling their duties. * A need to limit the number of modifications to the invitation for expression of interest and the request for resolution plan. * A need to clarify the process for modifying resolution plans and using challenge mechanisms. * A need to clearly define the criteria for resolution plan consideration. **5. Key Provisions / Changes:** The following details the changes introduced by the amendment text: * **Regulation 17 (Committee of Creditors):** * *Original Policy Being Changed:* Regulation 17 of the 2016 Regulations. * *New Rule/Provision:* A new sub-regulation (1A) is inserted, stating that the committee and its members must discharge their functions and exercise powers in compliance with guidelines issued by the Board regarding the CIRP. * *Difference/Effect:* This introduces a new layer of guidance, suggesting the Board will provide specific guidelines to shape the actions of the committee of creditors. This aims for standardization and potentially improved decision-making. * **Regulation 36A (Expression of Interest):** * *Original Policy Being Changed:* Regulation 36A of the 2016 Regulations. * *New Rule/Provision:* A new sub-regulation (4A) is inserted, stating that any modification to the invitation for expression of interest may be made in the same manner as the initial invitation. It includes a proviso limiting such modifications to *one* time only. * *Difference/Effect:* This change limits the number of modifications that can be made, thus creating a more stringent and predictable process for potential resolution applicants. * **Regulation 36B (Request for Resolution Plan):** * *Original Policy Being Changed:* Regulation 36B of the 2016 Regulations. * *New Rule/Provision:* A proviso is inserted after sub-regulation 5, limiting the number of modifications to *one* time only. * *Difference/Effect:* This amendment aims to streamline the submission and evaluation of resolution plans. * **Regulation 39 (Resolution Plan Evaluation):** * *Original Policy Being Changed:* Regulation 39 of the 2016 Regulations. * *New Rule/Provision:* Sub-regulation 1A is replaced. The resolution professional *may*, if envisaged in the request for resolution plan, a) allow modification of the resolution plan received under subregulation 1, but not more than once; or b) use a challenge mechanism to enable resolution applicants to improve their plans. A new sub-regulation 1B states that the committee *shall not* consider resolution plans received after the specified time, from ineligible persons, or those not compliant with section 30(2) and sub-regulation 1. * *Difference/Effect:* This introduces the *option* for the resolution professional to allow a single modification to the resolution plan or use a challenge mechanism. It also clarifies the grounds for *excluding* a resolution plan from consideration by the committee. **6. Target Audience and Stakeholders:** Based on the text, the primary target audience and stakeholders directly affected by these amendments include: * The Insolvency and Bankruptcy Board of India (IBBI) * Resolution Professionals * The Committee of Creditors * Corporate Debtors undergoing the CIRP * Prospective Resolution Applicants * Other stakeholders involved in the insolvency resolution process **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The IBBI is responsible for issuing guidelines related to the functions of the committee of creditors. Resolution Professionals and the Committee of Creditors are responsible for implementing the regulations concerning modifications to the Expression of Interest, Resolution Plan, and the consideration of Resolution Plans. * **Timelines/Procedures:** The amendment introduces specific limitations on the number of modifications allowed, aiming to streamline the CIRP. The committee must specify a time for submission of resolution plans, and any plans received after this time will not be considered. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes of these specific changes introduced by the amendment text are: * **Improved Governance:** The introduction of IBBI guidelines for the committee of creditors should enhance governance and standardization. * **Increased Efficiency:** Limiting modifications to the Expression of Interest and Resolution Plan aims to increase efficiency by preventing endless revisions and delays. * **Fairness and Transparency:** The clarification of the process for modifying resolution plans and using challenge mechanisms promotes fairness and transparency in the CIRP. * **Better Quality Resolution Plans:** By clarifying the grounds for exclusion of resolution plans, the amendment seeks to ensure that the committee only considers viable and compliant plans. **9. Conclusion:** The Insolvency and Bankruptcy Board of India Insolvency Resolution Process for Corporate Persons Third Amendment Regulations, 2021, represents a significant refinement of the existing CIRP framework. By clarifying the roles and responsibilities of key stakeholders and by introducing specific limitations on modifications and evaluation criteria, the amendments aim to improve the efficiency, transparency, and fairness of the insolvency resolution process for corporate persons. This ultimately benefits the stakeholders involved.

Key Entities Referenced