Fast track corporation insolvency resolution process [ Section 55 ] - Insolvency Resolution And Liquidation For Corporate Persons - IBC

Introduction A fast track insolvency resolution, as the name suggests, is a process wherein the insolvency resolution process shall be completed in an expeditious manner i.e., with 90 (ninety) days from the insolvency commencement date. The provisions of the IBBI (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 shall apply to the conduct of a fast track corporate insolvency resolution process. The provisions related to the fast track insolvency resolution are being covered under sections 55 to 58 of the Code. Fast track corporation insolvency resolution process [ Section 55 ] (1) A corporate insolvency resolution process carried out in accordance with this Chapter shall be called as fast track corporate insolvency resolution process. (2) An application for fast track corporate insolvency resolution process may be made in respect of the following corporate debtors, namely:- (a) a corporate debtor with assets and income below a level as may be notified by the Central Government; or (b) a corporate debtor with such class of creditors or such amount of debt as may be notified by the Central Government; or (c) such other category of corporate persons as may be notified by the Central Government. Applicability the provisions of fast track Corporate Resolution Process [ Notification S.O. 1911(E) date d14.06.2017 ] In exercise of the powers conferred by section 55(2) of the Insolvency and Bankruptcy Code, 2016 , the Central Government hereby notifies that an application for fast track corporate insolvency resolution process may be made in respect of the following corporate debtors, namely :- (a) a small company as defined under Section 2(85) of Companies Act, 2013 ; means a company, other than a public company,- ( i ) paid-up share capital of which does not exceed 50 lakh rupees or such higher amount as may be prescribed which shall not be more than 10 crore rupees ; and ( ii ) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed 2 crore rupees or such higher amount as may be prescribed which shall not be more than 100 crore rupees : Provided that nothing in this clause shall apply to- ( A ) a holding company or a subsidiary company; ( B ) a company registered under section 8; or ( C ) a company or body corporate governed by any special Act; or (b) a Startup (other than the partnership firm) as defined in the notification of the Government of India in the Ministry of Commerce and Industry number G. S .R. 127(E), dated the 19th February, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), dated the 19th February, 2019 and as amended from time to time; or (c) an unlisted company with total assets , as reported in the financial statement of the immediately preceding financial year, not exceeding 1 core rupees . Relevant Case Laws Sanjay Kumar Ruia Vs. Catholic Syrian Bank Ltd. Anr. 2019 (6) TMI 167 NCLAT order Dated 03.01.2019 The corporate debtor does not come within the category of corporate debtor in terms of clauses (a) or (b) or (c) of section 55(2) as its assets and income being not below a level, notified by the Central Government nor having class of creditors or amount of debt as notified by the Central Government. Therefore, section 55 cannot be invoked against the Corporate debtor.