Fast Track Insolvency Resolution Process for Corporate Persons under IBC

  • Blog|Insolvency and Bankruptcy Code|
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  • By Taxmann
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  • Last Updated on 25 January, 2021
There is a provision for Fast Track Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016 and is applicable to small corporates as defined in Section 55(2) of IBC Code 2016. These corporate debtors on whom this fast track Insolvency Resolution process could be applied are corporate debtors who have assets and income below a level as defined by the Central Government, or with such class of creditors or the amount of debt as notified by Central Government or of any other category as may be notified by Central Government. This fast track process is made part of IBC Code 2016 under IBBI (Insolvency Professionals) (Amendment) Regulations, 2018.
 

The fast track Corporate Insolvency Resolution Process could be completed within 90 days of its commencement however could be extended further by 45 days as per the decision of Adjudicating Authority. More than this, the extension of an Insolvency Resolution case is not allowed if it is being judged under fast track Corporate Insolvency Resolution Process.  An application for fast track process can be filed by a creditor or corporate debtor himself. He can submit the application accompanied with the proof of him not being a defaulter in means as specified by the IBBI and the proof of him being eligible for fast track insolvency resolution process as defined in section 57 of the Insolvency and Bankruptcy Code, 2016.   The resolution plan for fast track corporate insolvency resolution shall contain the details of resolution applicants and other stakeholders who would enable the committee to assess the credibility of the resolution applicant as per Regulation 37(3) of IBBI which again became part of IBC Code 2016 as per IBBI (Insolvency Professionals) (Amendment) Regulations, 2018. The resolution professional will submit all the resolution plans which comply with requirement as mention in the Insolvency and Bankruptcy Code, 2016. He shall also submit the details of all the transactions like preferential transaction as defined under section 43 of IBC Code 2016, under value transactions as defined under Section 45 and extortionate credit transactions as defined under section 50 of IBC Code 2016 and fraudulent transactions. He also must submit the copies of order of Adjudicating Authority in respect to these transactions as mentioned in Regulation 38(2) of IBBI of Fast Track Insolvency Resolution Process.  The process for conducting the corporate insolvency process is as defined under Chapter II of Part II of the Insolvency and Bankruptcy Code, 2016 and provisions related to offences and penalties applicable are as defined under Chapter VII of Part II of the Insolvency and Bankruptcy Code, 2016.  The procedure for Fast Track Insolvency Resolution Process is defined in IBBI Regulations 2017. As per this procedure the company shall appoint an insolvency resolution professional and a public announcement shall be made as per specified form A. Proof of claims shall be obtained and committee of creditors shall be formed. The meeting of these creditors shall be organized by Insolvency Professional who will then conduct the fast track process as per process defined in Fast Track Insolvency Resolution for Corporate Persons Regulation, 2017 which came into effect from 5th October 2017.

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