Background

Following the start of the corporate insolvency resolution procedure under Sections 7, 9, or 10 of the Insolvency Code, 2016, additional action will be taken before the Adjudicating Authority (NCLT).

The procedure before the NCLT must be governed by rules 20 to 24 and 26 of Part III of the NCLT Regulations, 2016 [until the rules under the Insolvency and Bankruptcy Code are issued] – rule 10 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
To oversee the bankruptcy resolution process, a Committee of Creditors (CoC) must be formed.

The actual work will be performed by a "resolution professional" under the supervision of the Committee of Creditors (CoC) and the Adjudicating Authority (NCLT).
A mandatory maximum time restriction of 330 days, including time spent in the legal procedure, is required to complete the resolution process.

Normally, the Corporate Insolvency Resolution Procedure (CIRP) must be completed within 180 days following the NCLT's application to commence the corporate insolvency process – section 12(1) of the Insolvency Code, 2016.

This period can be extended if the resolution professional files an application with the Adjudicating Authority, or if instructed by a resolution passed at a meeting of the Committee of Creditors (CoC) by a vote of sixty-six percent (66%) of the voting shares – section 12(2) of the Insolvency Code, 2016.
On receipt of such permission, the resolution professional must apply to the adjudicating body (NCLT) - Regulation 40 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulation, 2016.

On receipt of such an application, the Adjudicating Authority (NCLT) may grant no more than one extension of up to 90 days - section 12(3) of the Insolvency Code, 2016.
- The mandatory term for completing CIRP is 330 days, including time for appeal, stay, and so on. The Corporate Insolvency Resolution Process (CIRP) must be completed within 330 days of the insolvency commencement date, including any extension of the period of corporate insolvency resolution process granted under section 12 of the Insolvency Code and time spent in legal proceedings in relation to such resolution process of the corporate debtor – second proviso to section 12(3) of the Insolvency Code, inserted vide Insolvency and Bankruptcy Code.
This is to dissuade Corporate Debtors from pursuing appeals, modifications, and writ petitions in order to postpone CIRP.
In the case of a pending CIRP as of the date of the start of the Insolvency and Bankruptcy Code (Amendment) Act, 2019, a period of 90 days is given – Where a corporate debtor's insolvency resolution process is pending and has not been completed within the period referred to in the second proviso to section 12(3), such resolution process shall be completed within ninety days of the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019, w.e.f. 16-8-2019.

Timeline extension due to Covid-19 lockout – Regardless of the timelines contained in these regulations, but subject to the provisions of the Code, the period of lockdown imposed by the Central Government in the aftermath of the COVID-19 outbreak shall not be counted for the purposes of the timeline for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process – Regulation 40C of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
The method of resolving corporate insolvency has been made public.
The necessary information must be included in the public announcement of the corporate insolvency resolution procedure under the order referred to in section 13 of the Insolvency Code.

Public announcement style – The public notification will be issued in accordance with section 15(2) of the Insolvency Code.
Regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 specifies the conditions for public notice. Form A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 should be used for the public notification.

It should be published in one English newspaper and one regional newspaper. It should also be posted on the corporate debtor's and Board of Directors' websites (IBBI).
For this aim, IBBI has assigned the website www.ibbi.gov.in. The way in which the public notification is published on the designated website is detailed in IBBI circular No. IP(CIRP)/006/2018, dated 23-2-2018.

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