**Report on the Insolvency and Bankruptcy Board of India Liquidation Process Second Amendment Regulations, 2021**
**1. Executive Summary:**
This report analyzes the Insolvency and Bankruptcy Board of India (IBBI) Liquidation Process Second Amendment Regulations, 2021, as notified on September 30, 2021. This amendment modifies the original IBBI Liquidation Process Regulations, 2016. The core purpose of the amendment is to refine and clarify certain aspects of the liquidation process, likely to improve efficiency and stakeholder participation. Key changes include revisions to the consultation committee's role, procedures related to sales and auctions during liquidation, and reporting requirements for liquidators.
**2. Introduction:**
This report aims to provide a comprehensive overview of the IBBI Liquidation Process Second Amendment Regulations, 2021, based solely on the provided policy text. It identifies key changes, assesses their potential impact, and highlights implications for relevant stakeholders in the industry.
**3. Policy Overview:**
* This document amends the Insolvency and Bankruptcy Board of India Liquidation Process Regulations, 2016.
* **Core Objective(s):** Based on the provided text, the core objectives of this amendment appear to be to:
* Streamline the liquidation process.
* Clarify the role and responsibilities of the liquidator and consultation committee.
* Modify procedures related to asset sales, particularly auctions.
* Enhance transparency and reporting during the liquidation process.
**4. Background and Rationale:**
* **Rationale for Amendment:** The specific amendments suggest a need to address certain inefficiencies or ambiguities within the original 2016 regulations. The changes to the consultation committee suggest a desire to refine its advisory role, potentially to improve the efficiency of decision-making during liquidation. The changes related to auction processes indicate an effort to balance participation with practical considerations, such as upfront costs. The modifications to reporting requirements suggest an aim to increase transparency and accountability.
**5. Key Provisions / Changes:**
The following outlines the key changes introduced by the amendment:
* **Regulation 2 (Definition Changes):**
* *Change:* Omits "to contributories" from subclause (vii) of clause (ea) of subregulation 1.
* *Effect:* The removal of the term "to contributories" likely refines the scope of some defined term related to stakeholders in the liquidation process. Without knowing what term is being defined, it's difficult to asses the impact but it narrows a particular element of the definition.
* **Regulation 2B (Omission of references):**
* *Change:* Removes "subsections 1 and 4 of" from subregulation 1.
* *Effect:* This likely simplifies a reference to a section or subsection within the broader Insolvency and Bankruptcy Code, potentially clarifying the application of the regulation.
* **Regulation 15 (Asset Sales):**
* *Change:* Replaces "in accordance with Chapter III of Part II" with "under Part II" in clause (e) of subregulation 2.
* *Effect:* Simplifies a reference related to asset sales.
* **Regulation 31A (Consultation Committee):**
* *Change:* Substituted subregulations 1 and 4 and an insertion in subregulation 10.
* *Effect:*
* **Subregulation 1 Substitution:** Specifies that the liquidator must constitute a consultation committee within 60 days of the liquidation commencement date to advise on professional appointments and their remuneration, and asset sales (manner, pre-bid qualifications, reserve price, earnest money, and marketing). It further mandates decisions taken before the committee's constitution must be presented to it at the first meeting. *Effect*: Formalizes and emphasizes the advisory role of the consultation committee from an earlier stage and requires transparency regarding prior decisions.
* **Subregulation 4 Substitution:** Changes how representatives are selected if a class of stakeholders fails to nominate them. Now, representatives are selected by a majority of the voting share of the class, present and voting. *Effect*: Provides a clear mechanism for representative selection in cases of failure of nomination.
* **Subregulation 10 Insertion:** Requires a liquidator to mention in the next progress report if a consultation was done in writing with the consultation committee. *Effect*: Increased transparency of consultation with the committee.
* **Regulation 44 (Omission of References):**
* *Change:* Omits "Chapter III of" from subregulation 1.
* *Effect:* Simplifies a reference to a chapter within the Liquidation Process Regulations.
* **Regulation 47 (Model Timelines):**
* *Change:* Removes "and announcement to public" from Sl. No. 9 in column 3 (regarding model timelines).
* *Effect:* May alter the prescribed timeline for public announcements related to the liquidation process.
* **Schedule I (Auction Process):**
* *Change:* Inserts provisos to clause 3, substitutes clause 5, and inserts clause 11A in paragraph 14.
* *Effect:*
* **Clause 3 Provisos:** Prohibits non-refundable deposits or fees for auction participation and limits the earnest money deposit to 10% of the reserve price. *Effect:* Reduces barriers to entry for potential bidders in auctions.
* **Clause 5 Substitution:** Replaces "make a public announcement" with "issue a public notice." *Effect*: Seemingly clarifies the form of notice.
* **Clause 11A Insertion:** Requires the liquidator to inform the highest bidder of the reasons for rejection of their bid and mention the rejection in the next progress report. *Effect:* Enhances transparency and provides feedback to bidders.
* **Schedule II (Form H - Reporting):**
* *Change:* Omits Sl. No. 19, substitutes announcement with notice in Sl. No. 23 and 24.
* *Effect:* Simplifies report format.
**6. Target Audience and Stakeholders:**
Based on the provided text, the primary target audience and stakeholders affected by these amendments include:
* Liquidators
* Insolvency Professionals
* Creditors (Financial and Operational)
* Corporate Debtors undergoing Liquidation
* Potential Bidders in Liquidation Auctions
* Consultation Committee Members
**7. Implementation Aspects (Inferred):**
* **Responsible Agency:** The Insolvency and Bankruptcy Board of India (IBBI) is the responsible body for implementing and overseeing these regulations.
* **Timelines:** The amendments come into force on the date of their publication in the Official Gazette (September 30, 2021). The liquidator is required to constitute a consultation committee within sixty days from the liquidation commencement date.
* **Procedures:** Liquidators need to adjust their processes regarding auction participation fees, reporting requirements, and consultation committee constitution and operation. They are also responsible for informing rejected bidders of the reasons for rejection.
**8. Expected Outcomes / Impact of Changes:**
The intended outcomes of these amendments likely include:
* Increased transparency and accountability in the liquidation process.
* Greater stakeholder participation and more effective consultation.
* Reduced barriers to entry for potential bidders in liquidation auctions.
* More efficient and streamlined liquidation proceedings.
**9. Conclusion:**
The IBBI Liquidation Process Second Amendment Regulations, 2021, represent a significant refinement of the existing liquidation framework. By addressing potential ambiguities, streamlining processes, and enhancing transparency, these amendments are likely to improve the overall efficiency and fairness of the liquidation process, benefitting all stakeholders involved.
Key Entities Referenced
Insolvency and Bankruptcy Board of India: An organization that is responsible for the regulation and development of the insolvency and bankruptcy process in India.
Insolvency and Bankruptcy Code, 2016: A law in India that provides a framework for the resolution of insolvency and bankruptcy cases.
Insolvency and Bankruptcy Board of India Liquidation Process Regulations, 2016: Regulations established by the Insolvency and Bankruptcy Board of India, outlining the procedures for liquidation processes.
Insolvency and Bankruptcy Board of India Liquidation Process Second Amendment Regulations, 2021: Amendments made in 2021 to the Insolvency and Bankruptcy Board of India Liquidation Process Regulations, 2016.
New Delhi: The location where the notification was issued.
Official Gazette: The official government publication where the regulations are published.
Dr. M. S. SAHOO: Chairperson of the Insolvency and Bankruptcy Board of India.
Insolvency and Bankruptcy Board of India Liquidation Process Amendment Regulations, 2021: Previous amendments to the Liquidation Process Regulations.
Mayapuri, New Delhi: Location of the Government of India Press.
Delhi: Location of the Controller of Publications
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
xxxGIDHxxx
सी.जी.-डी.एलxx.x-GअID.-E3x0xx0 92021-230083
CG-DL-E-30092021-230083
ऄसाधारण
EXTRAORDINARY
भाग III—खण् ड 4
PART III—Section 4
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 428] नइ ददल्ली, बृहस्ट्प जतवार, जसतम्ब र 30, 2021/अजव न 8, 1943
No. 428] NEW DELHI, THURSDAY, SEPTEMBER 30, 2021/ASVINA 8, 1943
भारतीय ददवाला और िोधन ऄक्षमता बोड ड
ऄजधसचू ना
नइ ददल्ली, 30 जसतम्बर, 2021
भारतीय ददवाला और िोधन ऄक्षमता बोड ड (समापन प्रदिया)
(दसू रा सिं ोधन) जवजनयम, 2021
स.ं अइ.बी.बी.अइ/2021-22/िी.एन/अर.इ.िी.079.—भारतीय ददवाला और िोधन ऄक्षमता बोडड, ददवाला
और िोधन ऄक्षमता संजहता, 2016 (2016 का 31) की धारा 240 के साथ पठित धारा 196 की ईपधारा (1) के खंड (न)
द्वारा प्रदत्त िजियों का प्रयोग करत े हुए, भारतीय ददवाला और िोधन ऄक्षमता बोडड (समापन प्रदिया) जवजनयमन, 2016
का और संिोधन के जलए जनम्नजलजखत जवजनयम बनाता ह,ै ऄथाडत्:-
1. (1) आन जवजनयमों का संजक्षप्त नाम भारतीय ददवाला और िोधन ऄक्षमता बोडड (समापन प्रदिया) (दसू रा संिोधन)
जवजनयम, 2021 ह ै।
(2) ये रािपत्र में प्रकािन की तारीख से प्रवृत्त होंग े।
2. भारतीय ददवाला और िोधन ऄक्षमता बोडड (समापन प्रदिया) जवजनयमन 2016 (जिन्ह ें आसमें आसके पश्चात् मलू
जवजनयम कहा गया ह)ै , के जवजनयम 2 के ईप-जवजनयम (1) के खंड (ङक) के ईपखंड (vii) म,ें “ऄंिदाताओं को” िब्दों का
लोप दकया िाएगा ।
3. मूल जवजनयमों के जवजनयम 2ख के ईप-जवजनयम (1) में, “ईपधारा (1) और ईपधारा (4)” िब्दों, कोष्ठकों और ऄंकों
का लोप दकया िाएगा ।
4. मूल जवजनयमों के जवजनयम 15 के ईप-जवजनयम (2) के खडं (ङ) में, “भाग 2 के ऄध्याय 3 के ऄनुसार” िब्दों और
ऄंकों के स्ट्थान पर “भाग 2 के ऄधीन” िब्द और ऄंक रखे िाएंग े।
5565 GI/2021 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
5. मूल जवजनयमों के जवजनयम 31क में,-
(i). ईप-जवजनयम (1) के स्ट्थान पर जनम्नजलजखत ईप-जवजनयम रखा िाएगा, ऄथाडत:् -
“(1) पठरसमापक, समापन प्रारंभ होन े की तारीख से साि ददन के भीतर, जनम्नजलजखत स े संबंजधत जवषयों पर ईसे
सलाह देने के जलए, जवजनयम 31 के ऄधीन तैयार की गइ जहतधारकों की सूची पर अधाठरत एक परामिड सजमजत
का गिन करेगा –
(क) जवजनयम 7 के ऄधीन व्यावसाजयकों की जनयुजि और ईनका पाठरश्रजमक;
(ख) जवजनयम 32 के ऄधीन जबिी, जिसके ऄतं गतड जबिी की रीजत, बोली-पूवड ऄहतड ाएं, अरजक्षत कीमत,
ऄजिम िमा की रकम और जवपणन रणनीजत भी ह ै:
परन्तु पठरसमापक द्वारा परामिड सजमजत के गिन से पूवड दकए गए जवजनश्चय (जवजनश्चयों) को
परामिड सजमजत के समक्ष ईसकी प्रथम बैिक म ें ईसकी िानकारी के जलए रखा िाएगा ।”;
(ii) ईप-जवजनयम (4) के स्ट्थान पर, जनम्नजलजखत ईप-जवजनयम रखा िाएगा, ऄथाडत:् -
“(4) यदद दकसी वग ड के जहतधारक, ईप-जवजनयम (3) के ऄधीन ऄपने प्रजतजनजधयों को नामजनर्ददष्ट करन े
में ऄसफल होते ह ैं तो ऐसे प्रजतजनजधयों का चयन, ईस वगड के ईपजस्ट्थत और मतदान करने वाले मतदान
ऄंि के बहुमत द्वारा दकया िाएगा ।”;
(iii) ईप-जवजनयम (10) के परन्तुक म,ें “लेखबद्ध करेगा” िब्दों के पश्चात ् “और ऄगली प्रगजत ठरपोर् ड म ें ईसका
ईल्लेख करेगा” िब्द ऄंतःस्ट्थाजपत दकए िाएंग े ।
6. मूल जवजनयमों के जवजनयम 44 के ईप-जवजनयम (1) म,ें “के ऄध्याय 3” िब्दों और ऄंक का लोप दकया िाएगा ।
7. मूल जवजनयमों के जवजनयम 47 में, समापन प्रदिया के जलए अदिड समय-सीमा से संबंजधत सारणी म,ें िम सं. 9 के
सामने स्ट्तंभ (3) में, “और सावडिजनक ईद्घोषणा करना” िब्दों का लोप दकया िाएगा ।
8. मूल जवजनयमों की ऄनुसूची I के पैरा 1 म,ें-
(i) खडं (3) में, जनम्नजलजखत परन्तुक ऄतं ःस्ट्थाजपत दकए िाएगं े, ऄथाडत्:-
“परन्तु पठरसमापक, समापन प्रदिया के ऄधीन दकसी नीलामी में भाग लेने के जलए दकसी ऄप्रजतदेय
जनक्षेप या फीस का संदाय करन े की ऄपक्षे ा नहीं करेगा:
परन्त ुयह और दक ऄजिम िमा, अरजक्षत कीमत के दस प्रजतित से ऄजधक नहीं होगा ।”
(ii) खंड (5) में, “सावडिजनक घोषणा करेगा” िब्दों के स्ट्थान पर “सावडिजनक सूचना िारी करेगा” िब्द रख े
िाएंगे।
(iii) खडं (11) के पश्चात्, जनम्नजलजखत खडं ऄंतःस्ट्थाजपत दकया िाएगा, ऄथाडत्:-
“(11क) िहां पठरसमापक दकसी नीलामी प्रदिया में ईच्चतर बोली को खाठरि करता ह ै वहां वह ईच्चतर
बोलीकताड को ऐसी खाठरिी के जलए कारण सूजचत करेगा और ऄगली प्रगजत ठरपोर्ड म ें ईसका ईल्लेख
करेगा।”
9. मलू जवजनयमों की ऄनुसूची II में, प्ररूप ि के पैरा 2 की सारणी में –
(i) िम स.ं 19 और ईसकी प्रजवजष्टयों का लोप दकया िाएगा ।
(ii) िम सं. 23 और िम स.ं 24 के सामने स्ट्तंभ (2) में, “ईद्घोषणा” िब्द के स्ट्थान पर “सूचना” िब्द रखा िाएगा।
डॉ. एम. एस. साहू, ऄध्यक्ष
[जवज्ञापन-III/4/ऄसा./291/2021-22]
ठर्प्पण : भारतीय ददवाला और िोधन ऄक्षमता बोडड (समापन प्रदिया) जवजनयमन, 2016, भारत के रािपत्र, ऄसाधारण,
भाग III, खंड 4 सं. 460, तारीख 15 ददसम्बर, 2016 में ऄजधसूचना सं. अइ.बी.बी.अइ./
2016-17/िी.एन./अर.इ.िी.005, तारीख 15 ददसम्बर, 2016 द्वारा प्रकाजित दकए गए थे और ईनम ें ऄंजतम[भाग III—खण् ड 4] भारत का रािपत्र : ऄसाधारण 3
संिोधन भारत के रािपत्र, ऄसाधारण, भाग III, खडं 4 सं. 91, तारीख 4 माचड, 2021 म ें ऄजधसूचना
सं. अइ.बी.बी.अइ./2020-21/िी.एन./अर.इ.िी.069, तारीख 4 माचड, 2021 द्वारा प्रकाजित भारतीय
ददवाला और िोधन ऄक्षमता बोडड (समापन प्रदिया) (संिोधन) जवजनयम, 2021 द्वारा दकया गया था ।
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
NOTIFICATION
New Delhi, the 30th September, 2021
Insolvency and Bankruptcy Board of India (Liquidation Process)
(Second Amendment) Regulations, 2021
No. IBBI/2021-22/GN/REG079.- 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 Code, 2016 (31 of 2016), the
Insolvency and Bankruptcy Board of India hereby makes the following regulations further to amend the
Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, namely: -
1. (1) These Regulations may be called the Insolvency and Bankruptcy Board of India (Liquidation
Process) (Second Amendment) Regulations, 2021.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (hereinafter
referred to as the principal regulations), in regulation 2, in sub-regulation (1), in clause (ea), in sub-clause
(vii), the words “to contributories” shall be omitted.
3. In the principal regulations, in regulation 2B, in sub-regulation (1), the words, figures and brackets “sub-
sections (1) and (4) of” shall be omitted.
4. In the principal regulations, in regulation 15, in sub-regulation (2), in clause (e), for the words and
figures “in accordance with Chapter III of Part II”, the words and figure “under Part II” shall be substituted.
5. In the principal regulations, in regulation 31A -
(i) for sub-regulation (1), the following sub-regulation shall be substituted, namely:-
“(1) The liquidator shall constitute a consultation committee within sixty days from the liquidation
commencement date, based on the list of stakeholders prepared under regulation 31, to advise him on
matters relating to-
(a) appointment of professionals and their remuneration under regulation 7;
(b) sale under regulation 32, including manner of sale, pre-bid qualifications, reserve price, amount of
earnest money deposit, and marketing strategy:
Provided that the decision(s) taken by the liquidator prior to the constitution of consultation
committee shall be placed before the consultation committee for information in its first meeting.”;
(ii) for sub-regulation (4), the following sub-regulation shall be substituted, namely:-
“(4) If the stakeholders of any class fail to nominate their representatives, under sub-regulation (3), such
representatives shall be selected by a majority of voting share of the class, present and voting.”;
(iii) in sub-regulation (10), in the proviso, after the words “in writing”, the words “and mention it in the
next progress report” shall be inserted.
6. In the principal regulations, in regulation 44, in sub-regulation (1), the words “Chapter III of” shall be
omitted.
7. In the principal regulations, in regulation 47, in the table relating to model timelines for liquidation
process, in column (3), against Sl. No. 9, the words “and announcement to public” shall be omitted.
8. In the principal regulations, in Schedule I, in paragraph 1-4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
(i) in clause (3), the following provisos shall be inserted, namely: -
“Provided that the liquidator shall not require payment of any non-refundable deposit or fee for
participation in an auction under the liquidation process:
Provided further that the earnest money deposit shall not exceed ten percent. of the reserve price.”.
(ii) in clause (5), for the words, “make a public announcement”, the words, “issue a public notice” shall be
substituted.
(iii) after clause (11), the following clause shall be inserted, namely:-
“(11A) Where the liquidator rejects the highest bid in an auction process, he shall intimate the reasons for
such rejection to the highest bidder and mention it in the next progress report.”.
9. In the principal regulations, in Schedule II, in Form H, in para 2, in the table-
(i) the Sl. No.19 and the entries thereof shall be omitted.
(ii) in column (2), against Sl. No. 23 and Sl. No. 24, for the word “announcement”, the word “notice” shall
respectively be substituted.
Dr. M. S. SAHOO, Chairperson
[ADVT.-III/4/Exty./291/2021-22]
Note: The Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 were
published vide notification No. IBBI/2016-17/GN/REG005 dated 15th December, 2016 in the
Gazette of India, Extraordinary, Part III, Section 4, vide No. 460 on 15th December, 2016 and were
last amended by Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment)
Regulations, 2021 vide notification No. IBBI/2020-21/GN/REG069 dated the 04th March, 2021 in
the Gazette of India, Extraordinary, Part III, Section 4, vide No. 91 on 04th March, 2021.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.