Regulation 38 - Mandatory contents of the resolution plan. - Insolvency and Bankruptcy Board of India (Insolvency Resolution Process For Corporate Persons) Regulations, 2016

38. Mandatory contents of the resolution plan. 7 [ (1) The amount payable under a resolution plan - (a) to the operational creditors shall be paid in priority over financial creditors; and (b) to the financial creditors, who have a right to vote under sub-section (2) of section 21 and did not vote in favour of the resolution plan, shall be paid in priority over financial creditors who voted in favour of the plan. ] 2 [(1A) A resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor.] 6 [ (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 9 [ Schedule-I ] ; (b) the management and control of the business of the corporate debtor during its term; and (c) adequate means for supervising its implementation. 8 [ (d) provides for the manner in which proceedings in respect of avoidance transactions, if any, under Chapter III or fraudulent or wrongful trading under Chapter VI of Part II of the Code, will be pursued after the approval of the resolution plan and the manner in which the proceeds, if any, from such proceedings shall be distributed: Provided that this clause shall not apply to any resolution plan that has been submitted to the Adjudicating Authority under sub-section (6) of section 30 on or before the date of commencement of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2022. ] 4 [ (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. ] 10 [ (4) The committee may consider the requirement of a monitoring committee for the implementation of the resolution plan. (5) Where the committee considers that a monitoring committee for the implementation of the resolution plan is required, it may, while approving the resolution plan, decide to constitute the same with the resolution professional or propose another insolvency professional, or any other person as its members: Provided that where the resolution professional is proposed to be part of the monitoring committee, the monthly fee payable to him shall not exceed the monthly fee received by him during the corporate insolvency resolution process. ] ************* Notes:- 1. Inserted vide Notification No. IBBI/2017-18/GN/REG019. Dated 07-11-2017 2. Inserted vide Notification No. IBBI/2017-18/GN/REG018. Dated 05-10-2017 3. Substituted vide Notification No. IBBI/2018-19/GN/REG031 dated 03-07-2018 before it was read as insolvency resolution process costs will be paid 4. Substituted vide Notification No. IBBI/2018-19/GN/REG031 dated 03-07-2018 before it was read as 1 [(3) A resolution plan shall contain details of the resolution applicant and other connected persons to enable the committee to assess the credibility of such applicant and other connected persons to take a prudent decision while considering the resolution plan for its approval. Explanation : For the purposes of this sub-regulation,- (i) details shall include the following in respect of the resolution applicant and other connected person, namely:- (a) identity; (b) conviction for any offence , if any, during the preceding five years; (c) criminal proceedings pending, if any; (d) disqualification, if any, under Companies Act, 2013, to act as a director; (e) identification as a willful defaulter, if any, by any bank or financial institution or consortium thereof in accordance with the guidelines of the Reserve Bank of India; (f) debarment, if any, from accessing to, or trading in, securities markets under any order or directions of the Securities and Exchange Board of India,; and (g) transactions, if any, with the corporate debtor in the preceding two years. ; (ii) the expression connected persons means- (a) persons who are promoters or in the management or control of the resolution applicant; (b) persons who will be promoters or in management or control of the business the corporate debtor during the implementation of the resolution plan; (c) holding company, subsidiary company, associate company and related party of the persons referred to in items (a) and (b) .] 5. Substituted vide Notification No. IBBI/2018-19/GN/REG032 dated 05-10-2018 before it was read as (1) A resolution plan shall identify specific sources of funds that will be used to pay the - (a) insolvency resolution process costs and provide that the 3 [ insolvency resolution process costs, to the extent unpaid, will be paid ] in priority to any other creditor; (b) liquidation value due to operational creditors and provide for such payment in priority to any financial creditor which shall in any event be made before the expiry of thirty days after the approval of a resolution plan by the Adjudicating Authority; and (c) liquidation value due to dissenting financial creditors and provide that such payment is made before any recoveries are made by the financial creditors who voted in favour of the resolution plan. 6. Inserted vide Notification No. IBBI/2019-20/GN/REG040 dated 24-01-2019 7. Substituted vide Notification No. IBBI/2019-20/GN/REG052 dated 27-11-2019 before it was read as 5 [ (1) The amount due to the operational creditors under a resolution plan shall be given priority in payment over financial creditors. ] 8. Inserted vide Notification No. IBBI/2022-23/GN/REG084 dated 14-06-2022 9. Substituted vide Notification No. IBBI/2022-23/GN/REG091 dated 13-09-2022 before it was read as, Schedule 10. Inserted vide Notification No. IBBI/2023-24/GN/REG113 dated 15-02-2024