Consideration and approval of resolution plan [ Section 54K ] - Insolvency Resolution And Liquidation For Corporate Persons - IBC

Base resolution plan Means As per section 5 (2A) base resolution plan means a resolution plan provided by the corporate debtor under clause (c) of sub- section (4) of section 54A; Process of submitting of a resolution plan under Chapter IIIA in Part II of the Code Consideration and approval of resolution plan [ Section 54K ] Submit the Base resolution plan (1) The corporate debtor shall submit the base resolution plan , referred to in clause (c) of section 54A(4) , to the resolution professional within two days of the pre-packaged insolvency commencement date, and the resolution professional shall present it to the committee of creditors . [ Section 54K(1) ] Provide opportunity to corporate debtor (2) The committee of creditors may provide the corporate debtor an opportunity to revise the base resolution plan prior to its approval under sub-section (4) or invitation of prospective resolution applicants under sub-section (5), as the case may be. [ Section 54K(2) ] (3) The resolution plans and the base resolution plan, submitted under this section shall conform to the requirements referred to in sub-sections (1) and (2) of section 30 , and the provisions of sub-sections (1), (2) and (5) of section 30 shall, mutatis mutandis apply , to the proceedings under this Chapter. [ Section 54K(3) ] Committee of creditor may approve or may not approve for submission to Adjudicating Authority (4) The committee of creditors may approve the base resolution plan for submission to the Adjudicating Authority if it does not impair any claims owed by the corporate debtor to the operational creditors. [ Section 54K(4) ] (5) Where - (a) the committee of creditors does not approve the base resolution plan under sub-section (4); or (b) the base resolution plan impairs any claims owed by the corporate debtor to the operational creditors, the resolution professional shall invite prospective resolution applicants to submit a resolution plan or plans , to compete with the base resolution plan, in such manner as may be specified. [ Section 54K(5) read with Regulation 43 of IBBI (Pre-packaged Insolvency Resolution Process) Regulations, 2021 ] Submitting the resolution plan with approval of committee of creditors (6) The resolution applicants submitting resolution plans pursuant to invitation under sub-section (5), shall fulfil such criteria as may be laid down by the resolution professional with the approval of the committee of creditors, having regard to the complexity and scale of operations of the business of the corporate debtor and such other conditions as may be specified. [ Section 54K(6) ] (7) The resolution professional shall present to the committee of creditors, for its evaluation, resolution plans which conform to the requirements referred to in section 30(2) . [ Section 54K(8) ] (8) The committee of creditors shall evaluate the resolution plans presented by the resolution professional and select a resolution plan from amongst them. [ Section 54K(9) ] Select the Resolution Plan (9) Where the committee of creditors decides that the resolution plan selected under sub-section (9) is significantly better than the base resolution plan, such resolution plan may be selected for approval under sub-section (12) on the basis of such criteria as may be laid down by it, The criteria laid down by the committee of creditors under this sub-section shall be subject to such conditions as may be specified. [ Section 54K(10) ] (10) Where the resolution plan selected under sub-section (9) is not considered for approval or does not fulfil the requirements of sub-section (10), it shall compete with the base resolution plan, in such manner and subject to such conditions as may be specified, and one of them shall be selected for approval under sub-section (12). [ Section 54K(11) ] Selected Resolution plan sent for approval for submission to Adjudicating Authority (11) The resolution plan selected for approval under sub-section (10) or sub-section (11) , as the case may be, may be approved by the committee of creditors for submission to the Adjudicating Authority. where the resolution plan selected for approval under sub-section (11) is not approved by the committee of creditors , the resolution professional shall file an application for termination of the pre-packaged insolvency resolution process in such form and manner as may be specified. [ Section 54K(12) ] Approved the resolution plan by the credit committee (12) The approval of the resolution plan under sub-section (4) or sub-section (12), as the case may be, by the committee of creditors, shall be by a vote of not less than 66% of the voting shares, after considering its feasibility and viability, the manner of distribution proposed, taking into account the order of priority amongst creditors as laid down in section 53(1) , including the priority and value of the security interest of a secured creditor and such other requirements as may be specified. [ Section 54K(13) ] (13) While considering the feasibility and viability of a resolution plan, where the resolution plan submitted by the corporate debtor provides for impairment of any claims owed by the corporate debtor, the committee of creditors may require the promoters of the corporate debtor to dilute their shareholding or voting or control rights in the corporate debtor: Provided that where the resolution plan does not provide for such dilution, the committee of creditors shall, prior to the approval of such resolution plan under sub-section (4) or sub-section (12), as the case may be, record reasons for its approval. [ Section 54K(14) ] (14) The resolution professional shall submit the resolution plan as approved by the committee of creditors under sub-section (4) or sub-section (12), as the case may be, to the Adjudicating Authority . [ Section 54K(15) ] Information the resolution professional shall provide to the resolution applicants during the stage of submitting resolution plan by resolution applicant As per section 54K(7) The resolution professional shall provide to the resolution applicants, - (a) the basis for evaluation of resolution plans for the purposes of section 54K(9), as approved by the committee of creditors subject to such conditions as may be specified; and (b) the relevant information referred to in section 29 , which shall, mutatis mutandis apply, to the proceedings under this Chapter, in such manner as may be specified. Explanation I . For the removal of doubts, it is hereby clarified that, the corporate debtor being a resolution applicant under clause (25) of section 5, may submit the base resolution plan either individually or jointly with any other person. Explanation II . For the purposes of sub-sections (4) and (14), claims shall be considered to be impaired where the resolution plan does not provide for the full payment of the confirmed claims as per the updated list of claims maintained by the resolution professional. Time-limit for completion of pre-packaged insolvency resolution process [ Section 54D(2) (3) ] Without prejudice to sub- section (1), within a period of 90 days from the pre-packaged insolvency commencement date , the resolution professional shall submit the resolution plan, as approved by the committee of creditors, to the Adjudicating Authority under sub- section (4) or subsection (12), as the case may be, of section 54K , . [ Section 54D(2) ] Where no resolution plan is approved by the committee of creditors within the time period referred to in sub- section (2) , the resolution professional shall, on the day after the expiry of such time period, file an application with the Adjudicating Authority for termination of the pre-packaged insolvency resolution process in such form and manner as may be specified. [ Section 54D(3) ] Initiation of corporate insolvency resolution process. [ Section 54O(1) ] The committee of creditors, at any time after the pre-packaged insolvency commencement date but before the approval of resolution plan under section 54K(4) or 54K(12), by a vote of 66% . of the voting shares, may resolve to initiate a corporate insolvency resolution process in respect of the corporate debtor, if such corporate debtor is eligible for corporate insolvency resolution process under Chapter II. Approval order passed by the Adjudicating authority [ Section 54L(1) ] If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under under section 54K(4) or 54K(12) subject to the conditions provided therein, meets the requirements specified in S ection 30(2) , it shall, within thirty days of the receipt of such resolution plan, by order approve the resolution plan: The Adjudicating Authority shall, before passing an order for approval of a resolution plan under this sub- section , satisfy itself that the resolution plan has provisions for its effective implementation. Termination of pre-packaged insolvency resolution process [ Section 54N(1) ] Where the resolution professional files an application with the Adjudicating Authority, (a) under the proviso to sub- section (12) of section 54K ; or (b) under sub- section (3) of section 54D , the Adjudicating Authority shall, within thirty days of the date of such application, by an order, - (i) terminate the pre-packaged insolvency resolution process; and (ii) provide for the manner of continuation of proceedings initiated for avoidance of transactions under Chapter III or proceedings initiated under section 66 and section 67A , if any. Power to make regulations [ Section 240 ] (1) The Board may, by notification, make regulations consistent with this Code and the rules made thereunder, to carry out the provisions of this Code. (2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:- (zkp) the manner of inviting prospective resolution applicants under sub- section (5) of section 54K ; (zkq) other conditions under sub- section (6) of section 54K ; (zkr) the conditions under clause (a) and the manner of providing the basis for evaluation of resolution plans and the information referred to in section 29 under sub- section (7) of section 54K ; (zks) the conditions under the proviso to sub- section (10) of section 54K ; (zkt) the manner and conditions under sub- section (11) of section 54K ; (zku) the form and manner of filing application under the proviso to sub- section (12) of section 54K ; (zkv) other requirements under sub- section (13) of section 54K.