RECENT AMENDMENTS TO CORPORATE INSOLVENCY RESOLUTION PROCESS REGULATIONS

[DR.MARIAPPAN GOVINDARAJAN]

Regulations

For the purposes of carrying out the corporate insolvency resolution process (‘CIRP’ for short) in the Insolvency and Bankruptcy Code, 2016 (‘Code’ for short) the Insolvency and Bankruptcy Board of India (‘Board’ for short) made the Insolvency and Bankruptcy Board of India (Corporate Insolvency Resolution Process) Regulations, 2016 which came into effect from 01.12.2016.  The said regulations were amended from time to time to meet out the successful conduct of corporate insolvency resolution process.

Recent amendments

The Board now amended the said regulations, vide Insolvency and Bankruptcy Board of India (Corporate Insolvency Resolution Process) (Amendment) Regulations, 2025 vide Notification No. F.No. IBBI/2024-25/GN/REG122, dated 03.02.2025 from which date these amendments would come into effect.

Insertions

The amendment inserted new Regulations viz.,-

• Regulation 4E – handing over the possession;
• Regulation 16C – Appointment of facilitators;
• Regulation 16D – Roles and responsibilities of facilitators;
• Regulation 18;
• Regulation 30C – Report on the status of development rights and permissions of real estate projects;
• Regulation 31(ac);
• Regulation 36A(4)(e) and proviso;
• Row No. 17 in Form G.

In addition to the above insertions of regulations the following regulations are substituted by new regulations-

• Regulation 36A (4) (c) and (d);
• Regulation 36B (4A);
• Regulation 38(4) and (5).

Regulation 4E

Regulation 4D provides that the Interim Resolution Professional (‘IRP’ for short)/Resolution Professional (‘RP’ for short) shall operate a separate bank account for each real estate project in case of CIRP of rea estate project.

The newly inserted Regulation 4E provides for handing over the possession to the allottee for registration of the property.  The said regulation provides that the resolution professional, after obtaining the approval of the committee with not less than 66% of total votes, shall hand over the possession of the plot, apartment, or building or any instruments agreed to be transferred under the real estate project and facilitate registration, where the allottee has requested for the same and has performed his part under the agreement.

Facilitators

The Regulations brought a new service provider to CIRP called as facilitator. 

Appointment of facilitators

• When to appoint - Where the number of creditors in a class exceeds 1000, the committee may, direct the IRP/RP to appoint an IP other than the IRP/RP and authorised representative, or any other person, as facilitator/

Conditions for appointment

• the appointment of facilitator shall be considered only if, after the first meeting of the committee, a sub-class comprising of at least 100 creditors out of the total number of creditors in a class, request for the inclusion of an agenda for such appointment along with the name of the proposed facilitator;
•  the total number of facilitators shall not exceed 5;
• the fee for facilitator for each sub-class shall be 20% of the fees specified for the authorised representative;
• such fee shall be part of the insolvency resolution process cost, as per Regulation 31(ac).

Replacement of the facilitator

The committee may replace the facilitator on the recommendation of a majority of the members of the sub-class.

Roles and responsibility of facilitators

The roles and responsibilities of the facilitator(s) shall include the following-

• facilitating communication between the authorised representative and the creditors of the sub-class;
• attending the meetings of the committee, as observers, to facilitate communication between creditors of the respective sub-class;
• providing information and clarifications to the creditors in a sub-class about the insolvency resolution process, as per advice of the authorised representative; and
• any other tasks assigned by the committee to improve representation and communication.

Meeting of the Committee

Regulation 18 provides the procedure for conducting the meeting of the Committee.  New Regulation 18(4) provides that where the corporate debtor has any real estate project, the committee may direct the RP to invite the ‘competent authority’ as defined under section 2(p) of the Real Estate (Regulation and Development) Act, 2016 related to such project to attend such meeting(s) of the committee, as the committee may decide, without voting rights, for providing inputs on matters associated with the development of such project.

Report on the status of the Development Project

The newly inserted Regulation 30C provides that in any real estate project, the RP shall-

• prepare a report detailing the status of development rights and permissions required for development of such project;
• submit the report to the committee for its comments; and
• submit to the Adjudicating Authority, the report along with the comments of the committee on or before the 60^th day from the insolvency commencement date.

Invitation for Expression of Interest

Regulation 36(4) provides the details that are to be included in the interest of Expression of interest.  Now a new sub regulation (e) to Regulation 36(4) was inserted which provides that the details of the corporate debtor's registration status as a micro, small, or medium enterprise in accordance with the Micro, Small and Medium Enterprises Development Act, 2006 are to be provided in the expression of interest.

A new proviso was also inserted to the newly inserted sub regulation (e).  The said proviso provides that where the corporate debtor has any real estate project, the committee, for an association or group of allottees in such real estate project, representing not less than 10% or 100 creditors out of the total number of creditors in a class, whichever is lower, may relax the following-

• eligibility criteria for submission of expression of interest provided in clause (a) above; and
• conditions regarding the refundable deposit.

Request for resolution plan

Regulation 36B provides the procedure to  issue the information memorandum, evaluation matrix and a request for resolution plans to every resolution applicant in the final list.  A new proviso was inserted to Regulation 36B(4A) which provides that where the corporate debtor has any real estate project, the committee may relax the requirement to provide for performance security for an association or group of allottees in such real estate project, representing not less than 10% or 100 creditors out of the total number of creditors in a class, whichever is lower.

Mandatory contents of resolution plan

Regulation 38 provides for the mandatory contents of resolution plan.  The Regulation 38(4) and (5) are substituted by a new regulation 38(4).  The newly substituted Regulation 38(4) provides for the setting up of a monitoring committee by the Committee of Creditors for monitoring and supervising the implementation of the resolution plan.  The monitoring committee may consist of the RP or any other insolvency professional, or any other person, including representatives of the committee and representatives of resolution applicant(s), as its members.

Where the RP 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.

The monitoring committee shall submit quarterly reports to the Adjudicating Authority regarding the status of implementation of resolution plan.

Form G

Form G is the invitation for expression of interest.  A new item has been inserted in this form as Roll No. 17 - Details of the corporate debtor’s registration status as MSME.