The Insolvency and Bankruptcy Board of India (IBBI) has issued a crucial clarification for all registered insolvency professionals regarding the submission of particulars and declarations in insolvency resolution applications filed by creditors.
According to the clarification, creditors have the authority to file applications for initiating the insolvency resolution process of personal guarantors to corporate debtors under Section 95 of the Code. The application can be submitted individually, jointly with other creditors, or through a resolution professional (RP) along with Form C of the IRP PGCD Rules.
In Circular No. IBBI/II/62/2023 dated December 21, 2023, the IBBI addresses the process under Section 95 of the Insolvency and Bankruptcy Code (Code) in conjunction with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 (IRP PGCD Rules).
According to the clarification, creditors have the authority to file applications for initiating the insolvency resolution process of personal guarantors to corporate debtors under Section 95 of the Code. The application can be submitted individually, jointly with other creditors, or through a resolution professional (RP) along with Form C of the IRP PGCD Rules.
When the application is submitted through an RP, the RP’s particulars and declarations are outlined in Part IV of Form C. In such cases, the Adjudicating Authority (AA) verifies the RP’s disciplinary record through the Insolvency and Bankruptcy Board of India’s database before appointing them as per the Order under sub-section (5) of Section 97 of the Code.
In instances where the creditor files the application, suggesting the name of the insolvency professional to be appointed as RP, the IBBI’s clarification states that the proposed RP must furnish particulars and a declaration in Part IV of Form C. This information will be presented to the AA for consideration.
This clarification, issued under the powers vested in the IBBI by Section 196 of the Code, aims to streamline the application process and enhance transparency in the appointment of insolvency professionals.
For further details, insolvency professionals are encouraged to refer to Circular No. IBBI/II/62/2023, available on the IBBI website.
For inquiries, please contact:
Sushanta Kumar Das
Deputy General Manager
Email: das.sushanta@ibbi.gov.in
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