A Bill further to amend the Insolvency and Bankruptcy Code, 2016.

BE it enacted by Parliament in the Seventy-second Year of the Republic of India as

follows:—

1. (1) This Act may be called the Insolvency and Bankruptcy Code (Amendment)

Act, 2021.

(2) It shall be deemed to have come into force on the 4th day of April, 2021.

2. In the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the

principal Act), in section 4, after the proviso, the following proviso shall be inserted,

namely:—

Short title and

commencement.

Amendment

of section 4.

LOK SABHA

————

The following Bill was introduced in Lok Sabha on 26th July, 2021:—

BILL NO. 104 OF 2021

vlk/kkj.k

EXTRAORDINARY

Hkkx II — [k.M 2

PART II — Section 2

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PUBLISHED BY AUTHORITY

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No. 13]

NEW DELHI, MONDAY, JULY 26, 2021/SHRAVANA 4, 1943 (SAKA)

bl Hkkx esa fHkUu i`"B la[;k nh tkrh gS ftlls fd ;g vyx ladyu ds :i esa j[kk tk ldsA

Separate paging is given to this Part in order that it may be filed as a separate compilation.

xxxGIDHxxx

xxxGIDExxx

jftLVªh lañ Mhñ ,yñ—(,u)04@0007@2003—21

REGISTERED NO. DL—(N)04/0007/2003—21

31 of 2016.

सी.जी.-डी.एल.-अ.-27072021-228495

CG-DL-E-27072021-228495

सी.जी.-डी.एल.-अ.-27072021-228495

CG-DL-E-27072021-228495

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

"Provided further that the Central Government may, by notification, specify

such minimum amount of default of higher value, which shall not be more than

one crore rupees, for matters relating to the pre-packaged insolvency resolution

process of corporate debtors under Chapter III-A.".

3. In section 5 of the principal Act,—

(i) after clause (2), the following clause shall be inserted, namely:—

'(2A) "base resolution plan" means a resolution plan provided by the

corporate debtor under clause (c) of sub-section (4) of section 54A;';

(ii) in clause (5), in sub-clause (b), after the words "corporate insolvency

resolution process", the words "or the pre-packaged insolvency resolution process,

as the case may be," shall be inserted;

(iii) in clause (11), after the words "corporate insolvency resolution

process", the words "or pre-packaged insolvency resolution process, as the case

may be" shall be inserted;

(iv) in clause (15), after the words "process period", the words "or by the

corporate debtor during the pre-packaged insolvency resolution process period,

as the case may be" shall be inserted;

(v) in clause (19), after the words "for the purposes of", the words and

figures "Chapter VI and" shall be inserted;

(vi) after clause (23), the following clauses shall be inserted, namely:—

'(23A) "preliminary information memorandum" means a memorandum

submitted by the corporate debtor under clause (b) of sub-section (1) of

section 54G;

(23B) "pre-packaged insolvency commencement date" means the date

of admission of an application for initiating the pre-packaged insolvency

resolution process by the Adjudicating Authority under clause (a) of

sub-section (4) of section 54C;

(23C) "pre-packaged insolvency resolution process costs" means—

(a) the amount of any interim finance and the costs incurred in

raising such finance;

(b) the fees payable to any person acting as a resolution

professional and any expenses incurred by him for conducting the

pre-packaged insolvency resolution process during the pre-packaged

insolvency resolution process period, subject to sub-section (6) of

section 54F;

the business of the corporate debtor as a going concern pursuant to

an order under sub-section (2) of section 54J;

(d) any costs incurred at the expense of the Government to

facilitate the pre-packaged insolvency resolution process; and

(e) any other costs as may be specified;

(23D) "pre-packaged insolvency resolution process period" means

the period beginning from the pre-packaged insolvency commencement date

and ending on the date on which an order under sub-section (1) of

section 54L, or sub-section (1) of section 54N, or sub-section (2) of section

54-O, as the case may be, is passed by the Adjudicating Authority;';

Amendment

of section 5.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

(vii) in clause (25), after the words, brackets and figures "of

sub-section (2) of section 25", the words, figures and letter "or pursuant to section

54K, as the case may be" shall be inserted;

(viii) in clause (27), after the words "corporate insolvency resolution

process", the words "or the pre-packaged insolvency resolution process, as the

case may be" shall be inserted.

4. In section 11 of the principal Act,—

(i) in clause (a), after the words "corporate insolvency resolution process",

the words "or a pre-packaged insolvency resolution process" shall be inserted;

(ii) after clause (a), the following clause shall be inserted, namely:—

"(aa) a financial creditor or an operational creditor of a corporate

debtor undergoing a pre-packaged insolvency resolution process; or";

(iii) after clause (b), the following clause shall be inserted, namely:—

"(ba) a corporate debtor in respect of whom a resolution plan has

been approved under Chapter III-A, twelve months preceding the date of

making of the application; or".

5. After section 11 of the principal Act, the following section shall be inserted,

namely:—

"11A. (1) Where an application filed under section 54C is pending, the

Adjudicating Authority shall pass an order to admit or reject such application,

before considering any application filed under section 7 or section 9 or section 10

during the pendency of such application under section 54C, in respect of the

same corporate debtor.

(2) Where an application under section 54C is filed within fourteen days of

filing of any application under section 7 or section 9 or section 10, which is

pending, in respect of the same corporate debtor, then, notwithstanding anything

contained in sections 7, 9 and 10, the Adjudicating Authority shall first dispose of

the application under section 54C.

(3) Where an application under section 54C is filed after fourteen days of

the filing of any application under section 7 or section 9 or section 10, in respect

of the same corporate debtor, the Adjudicating Authority shall first dispose of the

application under section 7 or section 9 or section10.

(4) The provisions of this section shall not apply where an application

under section 7 or section 9 or section 10 is filed and pending as on the date of the

commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2021.".

6. In section 33 of the principal Act, in sub-section (3), after the words "approved

by the Adjudicating Authority", the words, figures, brackets and letter "under

section 31 or under sub-section (1) of section 54L," shall be inserted.

7. In section 34 of the principal Act, in sub-section (1), after the words and figures

"under Chapter II", the words, figures and letter "or for the pre-packaged insolvency

resolution process under Chapter III-A" shall be inserted.

8. After Chapter III of the principal Act, the following Chapter shall be inserted,

namely:—

Amendment

of section 11.

Insertion of

new section

11A.

Disposal of

applications

under section

54C and under

section 7 or

section 9 or

section 10.

Amendment

of section 33.

Amendment

of section 34.

Insertion of

new Chapter

III-A.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

'CHAPTER III-A

PRE-PACKAGED INSOLVENCY RESOLUTION PROCESS

54A.(1) An application for initiating pre-packaged insolvency resolution

process may be made in respect of a corporate debtor classified as a micro, small

or medium enterprise under sub-section (1) of section 7 of the Micro, Small and

Medium Enterprises Development Act, 2006.

(2) Without prejudice to sub-section (1), an application for initiating

pre-packaged insolvency resolution process may be made in respect of a corporate

debtor, who commits a default referred to in section 4, subject to the following

conditions, that—

(a) it has not undergone pre-packaged insolvency resolution process

or completed corporate insolvency resolution process, as the case may be,

during the period of three years preceding the initiation date;

(b) it is not undergoing a corporate insolvency resolution process;

(d) it is eligible to submit a resolution plan under section 29A;

(e) the financial creditors of the corporate debtor, not being its related

parties, representing such number and in such manner as may be specified,

have proposed the name of the insolvency professional to be appointed as

resolution professional for conducting the pre-packaged insolvency

resolution process of the corporate debtor, and the financial creditors of the

corporate debtor, not being its related parties, representing not less than

sixty-six per cent. in value of the financial debt due to such creditors, have

approved such proposal in such form as may be specified:

Provided that where a corporate debtor does not have any financial

creditors, not being its related parties, the proposal and approval under this

clause shall be provided by such persons as may be specified;

(f) the majority of the directors or partners of the corporate debtor, as

the case may be, have made a declaration, in such form as may be specified,

stating, inter alia, that—

(i) the corporate debtor shall file an application for initiating

pre-packaged insolvency resolution process within a definite time

period not exceeding ninety days;

(ii) the pre-packaged insolvency resolution process is not being

initiated to defraud any person; and

(iii) the name of the insolvency professional proposed and

approved to be appointed as resolution professional under clause (e);

(g) the members of the corporate debtor have passed a special

resolution, or at least three-fourth of the total number of partners, as the

case may be, of the corporate debtor have passed a resolution, approving

the filing of an application for initiating pre-packaged insolvency resolution

process.

(3) The corporate debtor shall obtain an approval from its financial creditors,

not being its related parties, representing not less than sixty-six per cent. in value of

the financial debt due to such creditors, for the filing of an application for initiating

pre-packaged insolvency resolution process, in such form as may be specified:

Corporate

debtors

eligible for

pre-packaged

insolvency

resolution

process.

27 of 2006.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

Provided that where a corporate debtor does not have any financial creditors,

not being its related parties, the approval under this sub-section shall be provided

by such persons as may be specified.

(4) Prior to seeking approval from financial creditors under sub-section (3),

the corporate debtor shall provide such financial creditors with—

(a) the declaration referred to in clause (f) of sub-section (2);

(b) the special resolution or resolution referred to in clause (g) of

sub-section (2);

to in section 54K, and such other conditions as may be specified; and

(d) such other information and documents as may be specified.

54B. (1) The insolvency professional, proposed to be appointed as the

resolution professional, shall have the following duties commencing from the

date of the approval under clause (e) of sub-section (2) of section 54A, namely:—

(a) prepare a report in such form as may be specified, confirming

whether the corporate debtor meets the requirements of section 54A, and

the base resolution plan conforms to the requirements referred to in

clause (c) of sub-section (4) of section 54A;

(b) file such reports and other documents, with the Board, as may be

specified; and

(2) The duties of the insolvency professional under sub-section (1) shall

cease, if,—

(a) the corporate debtor fails to file an application for initiating

pre-packaged insolvency resolution process within the time period as

stated under the declaration referred to in clause (f) of sub-section (2) of

section 54A; or

(b) the application for initiating pre-packaged insolvency resolution

process is admitted or rejected by the Adjudicating Authority,

as the case may be.

(3) The fees payable to the insolvency professional in relation to the duties

performed under sub-section (1) shall be determined and borne in such manner as

may be specified and such fees shall form part of the pre-packaged insolvency

resolution process costs, if the application for initiation of pre-packaged insolvency

resolution process is admitted.

54C. (1) Where a corporate debtor meets the requirements of section 54A, a

corporate applicant thereof may file an application with the Adjudicating Authority

for initiating pre-packaged insolvency resolution process.

(2) The application under sub-section (1) shall be filed in such form,

containing such particulars, in such manner and accompanied with such fee as

may be prescribed.

(3) The corporate applicant shall, along with the application, furnish—

(a) the declaration, special resolution or resolution, as the case may

be, and the approval of financial creditors for initiating pre-packaged

insolvency resolution process in terms of section 54A;

Duties of

insolvency

professional

before

initiation of

pre-packaged

insolvency

resolution

process.

Application

to initiate

pre-packaged

insolvency

resolution

process.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

(b) the name and written consent, in such form as may be specified, of

the insolvency professional proposed to be appointed as resolution

professional, as approved under clause (e) of sub-section (2) of

section 54A, and his report as referred to in clause (a) of sub-section (1) of

section 54B;

corporate debtor that may be within the scope of provisions in respect of

avoidance of transactions under Chapter III or fraudulent or wrongful trading

under Chapter VI, in such form as may be specified;

(d) information relating to books of account of the corporate debtor

and such other documents relating to such period as may be specified.

(4) The Adjudicating Authority shall, within a period of fourteen days of the

receipt of the application, by an order,—

(a) admit the application, if it is complete; or

(b) reject the application, if it is incomplete:

Provided that the Adjudicating Authority shall, before rejecting an

application, give notice to the applicant to rectify the defect in the application

within seven days from the date of receipt of such notice from the Adjudicating

Authority.

(5) The pre-packaged insolvency resolution process shall commence from

the date of admission of the application under clause (a) of sub-section (4).

54D. (1) The pre-packaged insolvency resolution process shall be completed

within a period of one hundred and twenty days from the pre-packaged insolvency

commencement date.

(2) Without prejudice to sub-section (1), the resolution professional shall

submit the resolution plan, as approved by the committee of creditors, to the

Adjudicating Authority under sub-section (4) or sub-section (12), as the case

may be, of section 54K, within a period of ninety days from the pre-packaged

insolvency commencement date.

(3) 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.

54E. (1) The Adjudicating Authority shall, on the pre-packaged insolvency

commencement date, along with the order of admission under section 54C—

(a) declare a moratorium for the purposes referred to in sub-section (1)

read with sub-section (3) of section 14, which shall, mutatis

mutandis apply, to the proceedings under this Chapter;

(b) appoint a resolution professional—

(i) as named in the application, if no disciplinary proceeding is

pending against him; or;

(ii) based on the recommendation made by the Board, if any

disciplinary proceeding is pending against the insolvency professional

named in the application;

insolvency resolution process to be made by the resolution professional, in

such form and manner as may be specified, immediately after his appointment.

Declaration of

moratorium

and public

announcement

during pre-

packaged

insolvency

resolution

process.

Time-limit

for

completion of

pre-packaged

insolvency

resolution

process.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

(2) The order of moratorium shall have effect from the date of such order till

the date on which the pre-packaged insolvency resolution process period comes

to an end.

54F. (1) The resolution professional shall conduct the pre-packaged

insolvency resolution process of a corporate debtor during the pre-packaged

insolvency resolution process period.

(2) The resolution professional shall perform the following duties, namely:—

(a) confirm the list of claims submitted by the corporate debtor under

section 54G, in such manner as may be specified;

(b) inform creditors regarding their claims as confirmed under

clause (a), in such manner as may be specified;

specified;

(d) monitor management of the affairs of the corporate debtor;

(e) inform the committee of creditors in the event of breach of any of

the obligations of the Board of Directors or partners, as the case may be, of

the corporate debtor, under the provisions of this Chapter and the rules and

regulations made thereunder;

(f) constitute the committee of creditors and convene and attend all its

meetings;

(g) prepare the information memorandum on the basis of the

preliminary information memorandum submitted under section 54G and any

other relevant information, in such form and manner as may be specified;

(h) file applications for avoidance of transactions under Chapter III or

fraudulent or wrongful trading under Chapter VI, if any; and

(i) such other duties as may be specified.

(3) The resolution professional shall exercise the following powers, namely:—

(a) access all books of account, records and information available

with the corporate debtor;

(b) access the electronic records of the corporate debtor from an

information utility having financial information of the corporate debtor;

of the corporate debtor available with Government authorities, statutory

auditors, accountants and such other persons as may be specified;

(d) attend meetings of members, Board of Directors and committee of

directors, or partners, as the case may be, of the corporate debtor;

(e) appoint accountants, legal or other professionals in such manner

as may be specified;

(f) collect all information relating to the assets, finances and operations

of the corporate debtor for determining the financial position of the corporate

debtor and the existence of any transactions that may be within the scope

of provisions relating to avoidance of transactions under Chapter III or

fraudulent or wrongful trading under Chapter VI, including information

relating to—

(i) business operations for the previous two years from the date

of pre-packaged insolvency commencement date;

Duties and

powers of

resolution

professional

during pre-

packaged

insolvency

resolution

process.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

(ii) financial and operational payments for the previous two years

from the date of pre-packaged insolvency commencement date;

(iii) list of assets and liabilities as on the initiation date; and

(iv) such other matters as may be specified;

(g) take such other actions in such manner as may be specified.

(4) From the date of appointment of the resolution professional, the financial

institutions maintaining accounts of the corporate debtor shall furnish all

information relating to the corporate debtor available with them to the resolution

professional, as and when required by him.

(5) The personnel of the corporate debtor, its promoters and any other

person associated with the management of the corporate debtor shall extend all

assistance and cooperation to the resolution professional as may be required by

him to perform his duties and exercise his powers, and for such purposes, the

provisions of sub-sections (2) and (3) of section 19 shall, mutatis mutandis apply,

in relation to the proceedings under this Chapter.

(6) The fees of the resolution professional and any expenses incurred by

him for conducting the pre-packaged insolvency resolution process shall be

determined in such manner as may be specified:

Provided that the committee of creditors may impose limits and conditions

on such fees and expenses:

Provided further that the fees and expenses for the period prior to the

constitution of the committee of creditors shall be subject to ratification by it.

(7) The fees and expenses referred to in sub-section (6) shall be borne in

such manner as may be specified.

54G. (1) The corporate debtor shall, within two days of the pre-packaged

insolvency commencement date, submit to the resolution professional the

following information, updated as on that date, in such form and manner as may

be specified, namely:—

(a) a list of claims, along with details of the respective creditors, their

security interests and guarantees, if any; and

(b) a preliminary information memorandum containing information

relevant for formulating a resolution plan.

(2) Where any person has sustained any loss or damage as a consequence

of the omission of any material information or inclusion of any misleading

information in the list of claims or the preliminary information memorandum

submitted by the corporate debtor, every person who—

(a) is a promoter or director or partner of the corporate debtor, as the

case may be, at the time of submission of the list of claims or the preliminary

information memorandum by the corporate debtor; or

(b) has authorised the submission of the list of claims or the preliminary

information memorandum by the corporate debtor,

shall, without prejudice to section 77A, be liable to pay compensation to every

person who has sustained such loss or damage.

(3) No person shall be liable under sub-section (2), if the list of claims or the

preliminary information memorandum was submitted by the corporate debtor

without his knowledge or consent.

List of claims

and

preliminary

information

memorandum.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

(4) Subject to section 54E, any person, who sustained any loss or damage

as a consequence of omission of material information or inclusion of any misleading

information in the list of claims or the preliminary information memorandum shall

be entitled to move a court having jurisdiction for seeking compensation for such

loss or damage.

54H. During the pre-packaged insolvency resolution process period,—

(a) the management of the affairs of the corporate debtor shall continue

to vest in the Board of Directors or the partners, as the case may be, of the

corporate debtor, subject to such conditions as may be specified;

(b) the Board of Directors or the partners, as the case may be, of the

corporate debtor, shall make every endeavour to protect and preserve the

value of the property of the corporate debtor, and manage its operations as

a going concern; and

be, of the corporate debtor, shall exercise and discharge their contractual or

statutory rights and obligations in relation to the corporate debtor, subject

to the provisions of this Chapter and such other conditions and restrictions

as may be prescribed.

54-I. (1) The resolution professional shall, within seven days of the

pre-packaged insolvency commencement date, constitute a committee of creditors,

based on the list of claims confirmed under clause (a) of

sub-section (2) of section 54F:

Provided that the composition of the committee of creditors shall be altered

on the basis of the updated list of claims, in such manner as may be specified, and

any such alteration shall not affect the validity of any past decision of the

committee of creditors.

(2) The first meeting of the committee of creditors shall be held within seven

days of the constitution of the committee of creditors.

(3) The provisions of section 21, except sub-section (1) thereof, shall, mutatis

mutandis apply, in relation to the committee of creditors under this Chapter:

Provided that for the purposes of this sub-section, references to "resolution

professional" under sub-sections (9) and (10) of section 21, shall be construed as

references to "corporate debtor or the resolution professional".

54J.(1) Where the committee of creditors, at any time during the

pre-packaged insolvency resolution process period, by a vote of not less than

sixty-six per cent. of the voting shares, resolves to vest the management of the

corporate debtor with the resolution professional, the resolution professional

shall make an application for this purpose to the Adjudicating Authority, in such

form and manner as may be specified.

(2) On an application made under sub-section (1), if the Adjudicating

Authority is of the opinion that during the pre-packaged insolvency resolution

process—

(a) the affairs of the corporate debtor have been conducted in a

fraudulent manner; or

(b) there has been gross mismanagement of the affairs of the corporate

debtor,

it shall pass an order vesting the management of the corporate debtor with the

resolution professional.

Management

of affairs of

corporate

debtor.

Committee of

creditors.

Vesting

management

of corporate

debtor with

resolution

professional.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

(3) Notwithstanding anything to the contrary contained in this Chapter, the

provisions of—

(a) sub-sections (2) and (2A) of section 14;

(b) section 17;

(d) sections 19 and 20;

(e) sub-section (1) of section 25;

(f) clauses (a) to (c) and clause (k) of sub-section (2) of section 25; and

(g) section 28,

shall, mutatis mutandis apply, to the proceedings under this Chapter, from the

date of the order under sub-section (2), until the pre-packaged insolvency

resolution process period comes to an end.

54K. (1) The corporate debtor shall submit the base resolution plan, referred

to in clause (c) of sub-section (4) of section 54A, 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.

(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.

(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.

(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.

(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.

(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.

(7) The resolution professional shall provide to the resolution applicants,—

(a) the basis for evaluation of resolution plans for the purposes of

sub-section (9), as approved by the committee of creditors subject to such

conditions as may be specified; and

Consideration

and approval

of resolution

plan.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

(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.

(8) The resolution professional shall present to the committee of creditors,

for its evaluation, resolution plans which conform to the requirements referred to

in sub-section (2) of section 30.

(9) The committee of creditors shall evaluate the resolution plans presented

by the resolution professional and select a resolution plan from amongst them.

(10) Where, on the basis of such criteria as may be laid down by it,

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):

Provided that the criteria laid down by the committee of creditors under this

sub-section shall be subject to such conditions as may be specified.

(11) 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).

(12) 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:

Provided that 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.

(13) 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 sixty-six per cent. 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 sub-section (1) of section 53,

including the priority and value of the security interest of a secured creditor and

such other requirements as may be specified.

(14) 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.

(15) 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.

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.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

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.

54L. (1) If the Adjudicating Authority is satisfied that the resolution plan as

approved by the committee of creditors under sub-section (4) or sub-section (12),

as the case may be of section 54K, subject to the conditions provided therein,

meets the requirements as referred to in sub-section (2) of section 30, it shall,

within thirty days of the receipt of such resolution plan, by order, approve the

resolution plan:

Provided that 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.

(2) The order of approval under sub-section (1) shall have such effect as

provided under sub-sections (1), (3) and (4) of section 31, which shall, mutatis

mutandis apply, to the proceedings under this Chapter.

(3) Where the Adjudicating Authority is satisfied that the resolution plan

does not conform to the requirements referred to in sub-section (1), it may, within

thirty days of the receipt of such resolution plan, by an order, reject the resolution

plan and pass an order under section 54N.

(4) Notwithstanding anything to the contrary contained in this section,

where the Adjudicating Authority has passed an order under sub-section (2) of

section 54J and the resolution plan approved by the committee of creditors under

sub-section (4) or sub-section (12), as the case may be of section 54K, does not

result in the change in the management or control of the corporate debtor to a

person who was not a promoter or in the management or control of the corporate

debtor, the Adjudicating Authority shall pass an order—

(a) rejecting such resolution plan;

(b) terminating the pre-packaged insolvency resolution process and

passing a liquidation order in respect of the corporate debtor as referred to

in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1) of

section 33; and

costs, if any, shall be included as part of the liquidation costs for the

purposes of liquidation of the corporate debtor.

54M. Any appeal against an order approving the resolution plan under

sub-section (1) of section 54L, shall be on the grounds laid down in

sub-section (3) of section 61.

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

Approval of

resolution

plan.

Appeal against

order under

section 54L.

Termination

of pre-

packaged

insolvency

resolution

process.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

for avoidance of transactions under Chapter III or proceedings initiated

under section 66 and section 67A, if any.

(2) Where the resolution professional, at any time after the pre-packaged

insolvency commencement date, but before the approval of resolution plan under

sub-section (4) or sub-section (12), as the case may be of section 54K, intimates

the Adjudicating Authority of the decision of the committee of creditors, approved

by a vote of not less than sixty-six per cent. of the voting shares, to terminate the

pre-packaged insolvency resolution process, the Adjudicating Authority shall

pass an order under sub-section (1).

(3) Where the Adjudicating Authority passes an order under sub-section (1),

the corporate debtor shall bear the pre-packaged insolvency resolution process

costs, if any.

(4) Notwithstanding anything to the contrary contained in this section,

where the Adjudicating Authority has passed an order under sub-section (2) of

section 54J and the pre-packaged insolvency resolution process is required to be

terminated under sub-section (1), the Adjudicating Authority shall pass an

order—

(a) of liquidation in respect of the corporate debtor as referred to in

sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1) of section 33;

and

(b) declare that the pre-packaged insolvency resolution process costs,

if any, shall be included as part of the liquidation costs for the purposes of

liquidation of the corporate debtor.

54-O.(1) The committee of creditors, at any time after the pre-packaged

insolvency commencement date but before the approval of resolution plan under

sub-section (4) or sub-section (12), as the case may be of section 54K, by a vote

of not less than sixty-six per cent. 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.

(2) Notwithstanding anything to the contrary contained in Chapter II, where

the resolution professional intimates the Adjudicating Authority of the decision

of the committee of creditors under sub-section (1), the Adjudicating Authority

shall, within thirty days of the date of such intimation, pass an order to—

(a) terminate the pre-packaged insolvency resolution process and

initiate corporate insolvency resolution process under Chapter II in respect

of the corporate debtor;

(b) appoint the resolution professional referred to in clause (b) of

sub-section (1) of section 54E as the interim resolution professional, subject

to submission of written consent by such resolution professional to the

Adjudicating Authority in such form as may be specified; and

if any, shall be included as part of insolvency resolution process costs for

the purposes of the corporate insolvency resolution process of the corporate

debtor.

(3) Where the resolution professional fails to submit written consent under

clause (b) of sub-section (2), the Adjudicating Authority shall appoint an interim

resolution professional by making a reference to the Board for recommendation,

in the manner as provided under section 16.

Initiation of

corporate

insolvency

resolution

process.

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[PART II—

(4) Where the Adjudicating Authority passes an order under

sub-section (2)—

(a) such order shall be deemed to be an order of admission of an

application under section 7 and shall have the same effect;

(b) the corporate insolvency resolution process shall commence from

the date of such order;

Chapter III or proceedings initiated under section 66 and section 67A, if

any, shall continue during the corporate insolvency resolution process;

(d) for the purposes of sections 43, 46 and 50, references to "insolvency

commencement date" shall mean "pre-packaged insolvency commencement

date"; and

(e) in computing the relevant time or the period for avoidable

transactions, the time-period for the duration of the pre-packaged insolvency

resolution process shall also be included, notwithstanding anything to the

contrary contained in sections 43, 46 and 50.

54P. (1) Save as provided under this Chapter, the provisions of sections 24,

25A, 26, 27, 28, 29A, 32A, 43 to 51, and the provisions of Chapters VI and VII of

this Part shall, mutatis mutandis apply, to the pre-packaged insolvency resolution

process, subject to the following, namely:—

(a) reference to "members of the suspended Board of Directors or the

partners" under clause (b) of sub-section (3) of section 24 shall be construed

as reference to "members of the Board of Directors or the partners,

unless an order has been passed by the Adjudicating Authority under

section 54J";

(b) reference to "clause (j) of sub-section (2) of section 25" under

section 26 shall be construed as reference to "clause (h) of sub-section (2)

of section 54F";

reference to "section 54E";

(d) reference to "resolution professional" in sub-sections (1) and (4)

of section 28 shall be construed as "corporate debtor";

(e) reference to "section 31" under sub-section (3) of section 61 shall

be construed as reference to "sub-section (1) of section 54L";

(f) reference to "section 14" in sub-sections (1) and (2) of section 74

shall be construed as reference to "clause (a) of sub-section (1) of

section 54E";

(g) reference to "section 31" in sub-section (3) of section 74 shall be

construed as reference to "sub-section (1) of section 54L".

(2) Without prejudice to the provisions of this Chapter and unless the context

otherwise requires, where the provisions of Chapters II, III, VI and VII are applied

to the proceedings under this Chapter, references to—

(a) "insolvency commencement date" shall be construed as

references to "pre-packaged insolvency commencement date";

(b) "resolution professional" or "interim resolution professional",

as the case may be, shall be construed as references to the resolution

professional appointed under this Chapter;

as references to "pre-packaged insolvency resolution process"; and

Application of

provisions of

Chapters II,

III, VI and VII

to this

Chapter.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

(d) "insolvency resolution process period" shall be construed as

references to "pre-packaged insolvency resolution process period".'.

9. In section 61 of the principal Act, for sub-section (4), the following sub-sections

shall be substituted, namely:—

"(4) An appeal against a liquidation order passed under section 33, or

sub-section (4) of section 54L, or sub-section (4) of section 54N, may be filed on

grounds of material irregularity or fraud committed in relation to such a liquidation

order.

(5) An appeal against an order for initiation of corporate insolvency

resolution process passed under sub-section (2) of section 54-O, may be filed on

grounds of material irregularity or fraud committed in relation to such an order." .

10. In section 65 of the principal Act, after sub-section (2), the following

sub-section shall be inserted, namely:—

"(3) If any person initiates the pre-packaged insolvency resolution process—

(a) fraudulently or with malicious intent for any purpose other than

for the resolution of insolvency; or

(b) with the intent to defraud any person,

the Adjudicating Authority may impose upon such person a penalty which shall

not be less than one lakh rupees, but may extend to one crore rupees.".

11. After section 67 of the principal Act, the following section shall be inserted,

namely:—

"67A. On and after the pre-packaged insolvency commencement date, where

an officer of the corporate debtor manages its affairs with the intent to defraud

creditors of the corporate debtor or for any fraudulent purpose, the Adjudicating

Authority may, on an application by the resolution professional, pass an order

imposing upon any such officer, a penalty which shall not be less than one lakh

rupees, but may extend to one crore rupees.".

12. In section 77 of the principal Act, the Explanation shall be omitted.

13. After section 77 of the principal Act, the following section shall be inserted,

namely:—

"77A. (1) Where—

(a) a corporate debtor provides any information in the application

under section 54C which is false in material particulars, knowing it to

be false or omits any material fact, knowing it to be material; or

(b) a corporate debtor provides any information in the list of

claims or the preliminary information memorandum submitted under

sub-section (1) of section 54G which is false in material particulars,

knowing it to be false or omits any material fact, knowing it to be

material; or

permitted the furnishing of such information under sub-clauses (a)

and (b),

such corporate debtor or person, as the case may be, shall be punishable with

imprisonment for a term which shall not be less than three years, but which may

Amendment

of section 61.

Amendment

of section 65.

Insertion of

new section

67A.

Fraudulent

management

of corporate

debtor during

pre-packaged

insolvency

resolution

process.

Omission of

Explanation

to section 77.

Insertion of

new section

77A.

Punishment

for offences

related to pre-

packaged

insolvency

resolution

process.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

extend to five years or with fine which shall not be less than one lakh rupees, but

which may extend to one crore rupees, or with both.

(2) If a director or partner of the corporate debtor, as the case may be,

deliberately contravenes the provisions of Chapter III-A, such person shall be

punishable with imprisonment for not less than three years, but which may extend

to five years, or with fine which shall not be less than one lakh rupees, but which

may extend to one crore rupees, or with both.

Explanation.—For the purposes of this section and sections 75, 76 and 77,

an application shall be deemed to be false in material particulars in case the facts

mentioned or omitted in the application, if true, or not omitted from the application,

as the case may be, would have been sufficient to determine the existence of a

default under this Code.".

14. In section 208 of the principal Act,—

(i) after clause (c), the following clause shall be inserted, namely:—

"(ca) pre-packaged insolvency resolution process under Chapter III-A

of Part II;";

(ii) after sub-section (1), the following sub-section shall be inserted,

namely:—

"(1A) Where the name of the insolvency professional proposed to be

appointed as a resolution professional, is approved under clause (e) of

sub-section (2) of section 54A, it shall be the function of such insolvency

professional to take such actions as may be necessary to perform his

functions and duties prior to the initiation of the pre-packaged insolvency

resolution process under Chapter III-A of Part II.".

15. In section 239 of the principal Act, in sub-section (2), after clause (fc), the

following clauses shall be inserted, namely:—

"(fd) the form, particulars, manner and fee for making application before the

Adjudicating Authority under sub-section (2) of section 54C;

(fe) the conditions and restrictions with which the promoters, members,

personnel and partners of the corporate debtor shall exercise and discharge

contractual or statutory rights and obligations under clause (c) of section 54H;".

16. In section 240 of the principal Act, in sub-section (2),—

(i) after clause (e), the following clause shall be inserted, namely:—

"(ea) the other costs under sub-clause (e) of clause (23C) of

section 5;";

(ii) after clause (zk), the following clauses shall be inserted, namely:—

"(zka) such number of financial creditors and the manner of proposing

the insolvency professional, and the form for approving such insolvency

professional by the financial creditors under clause (e), the persons who

shall provide approval under the proviso to clause (e), the form for making

a declaration under clause (f) of sub-section (2) of section 54A;

(zkb) the form for obtaining approval from financial creditors under

sub-section (3), and the persons who shall provide approval under the

proviso to sub-section (3) of section 54A;

(zkc) the other conditions for the base resolution plan under

clause (c), and such information and documents under clause (d) of

sub-section (4) of section 54A;

Amendment

of section

208.

Amendment

of section

239.

Amendment

of section

240.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

(zkd) the form in which the report is to be prepared under clause (a),

such reports and other documents under clause (b), and such other duties

under clause (c) of sub-section (1), and the manner of determining and

bearing the fees in sub-section (3) of section 54B;

(zke) the form for providing written consent of the insolvency

professional under clause (b), the form for declaration under clause (c), the

information relating to books of account and such other documents relating

to such period under clause (d) of sub-section (3) of section 54C;

(zkf) the form and manner for making application for termination of

the pre-packaged insolvency resolution process under sub-section (3) of

section 54D;

(zkg) the form and manner of making public announcement under

clause (c) of sub-section (1) of section 54E;

(zkh) the manner of confirming the list of claims under clause (a), the

manner of informing creditors under clause (b), the manner of maintaining

an updated list of claims under clause (c), the form and manner of preparing

the information memorandum under clause (g), and such other duties under

clause (i) of sub-section (2) of section 54F;

(zki) such other persons under clause (c), the manner of appointing

accountants, legal or other professionals under clause (e), such other matters

under sub-clause (iv) of clause (f) and the manner of taking other actions

under clause (g) of sub-section (3) of section 54F;

(zkj) the manner of determination of fees and expenses as

may be incurred by the resolution professional under sub-section (6) of

section 54F;

(zkk) the manner of bearing fees and expenses under sub-section (7)

of section 54F;

(zkl) the form and manner of list of claims and preliminary information

memorandum under sub-section (1) of section 54G;

(zkm) the conditions under clause (a) of section 54H;

(zkn) the manner of alteration of the composition of the committee of

creditors under the proviso to sub-section (1) of section 54-I;

(zko) the form and manner of making application under sub-section (1)

of section 54J;

(zkp) the manner of inviting prospective resolution applicants under

sub-section (5) of section 54K;

(zkq) the 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;

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

(zkv) the other requirements under sub-section (13) of section 54K;

(zkw) the form for submission of written consent under clause (b) of

sub-section (2) of section 54-O;".

17. In section 240A of the principal Act, in sub-section (1), after the words

"corporate insolvency resolution process", the words "or pre-packaged insolvency

resolution process" shall be inserted.

18. (1) The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021 is

hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken under the

said Ordinance shall be deemed to have been done or taken under the provisions of this

Act.

Amendment

of section

240A.

Repeal and

savings.

Ord. 3 of

2021.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

STATEMENT OF OBJECTS AND REASONS

The Insolvency and Bankruptcy Code, 2016, was enacted to consolidate and amend

the laws relating to reorganisation and insolvency resolution of corporate persons, partnership

firms, individuals and to achieve the desired objectives under it. The Code was amended in

the past to deal with the emerging market realities and to achieve certainty to the various

processes under the law.

2. COVID-19 pandemic has impacted businesses, financial markets and economies all

over the world, including India. The Government has been taking several measures to mitigate

the distress caused by the pandemic, inter alia, increasing the minimum amount of default to

one crore rupees for initiation of corporate insolvency resolution process and suspension of

filing of corporate insolvency resolution applications in respect of the defaults arising during

the period of one year between 25th March, 2020 and 24th March, 2021. The Micro, Small and

Medium Enterprises sector is critical to the economy considering their significant contribution

to our gross domestic product and generation of employment to a sizeable population. It

has, therefore, been considered necessary to urgently address the specific requirements of

the sector by providing an efficient and alternative framework under the Code for quicker,

cost-effective insolvency resolution process that is least disruptive to the businesses,

ensuring, among other objectives, job preservation.

3. In the aforesaid circumstances, it has become necessary to amend the Code to

provide for pre-packaged insolvency resolution process. However, as the Parliament was

not in session and immediate action was required to be taken, the Insolvency and Bankruptcy

Code (Amendment) Ordinance, 2021, was promulgated by the President on the 4th day of

April, 2021.

4. The Insolvency and Bankruptcy Code (Amendment) Bill, 2021, that seeks to replace

the Ordinance, inter alia, provides for—

(a) specifying a minimum threshold of not more than one crore rupees for initiating

pre-packaged insolvency resolution process;

(b) disposal of simultaneous applications for initiation of corporate insolvency

resolution process and pre-packaged insolvency resolution process, pending against

the same corporate debtor;

pre-packaged insolvency resolution process for corporate persons that are Micro,

Small and Medium Enterprises;

(d) penalty for fraudulent or malicious initiation of pre-packaged insolvency

resolution process or with intent to defraud persons;

(e) penalty for fraudulent management of corporate debtor during pre-packaged

insolvency resolution process;

(f) punishment for offences related to pre-packaged insolvency resolution

process; and

(g) certain amendments to the relevant provisions, which are consequential in

nature.

5. The Bill seeks to achieve the above objectives.

NEW DELHI;

NIRMALA SITHARAMAN.

The 19th July, 2021.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

MEMORANDUM REGARDING DELEGATED LEGISLATION

Clause 15 of the Bill empowers the Central Government to make rules in respect

of the following matters, namely:—

(a) the form, particulars, manner and fee for making application before the

Adjudicating Authority under sub-section (2) of section 54C;

(b) the conditions and restrictions with which the promoters, members,

personnel and partners of the corporate debtor shall exercise and discharge

contractual or statutory rights and obligations under clause (c) of section 54H.

Clause 16 of the Bill confers power upon the Insolvency and Bankruptcy Board

of India to make regulations in respect of the following matters, namely:—

(a) the other costs under sub-clause (e) of clause (23C) of section 5;

(b) such number of financial creditors and the manner of proposing the

insolvency professional, and the form for approving such insolvency professional

by the financial creditors under clause (e), the persons who shall provide approval

under the proviso to clause (e), the form for making a declaration under clause (f)

of sub-section (2) of section 54A;

sub-section (3), and the persons who shall provide approval under the proviso to

sub-section (3) of section 54A;

(d) the other conditions for the base resolution plan under clause (c), and

such information and documents under clause (d) of sub-section (4) of

section 54A;

(e) the form in which the report is to be prepared under clause (a), such

reports and other documents under clause (b), and such other duties under

clause (c) of sub-section (1), and the manner of determining the fees under

sub-section (3) of section 54B;

(f) the form for providing written consent of the insolvency professional

under clause (b), the form for declaration under clause (c), the information relating

to books of account and such other documents relating to such period under

clause (d) of sub-section (3) of section 54C;

(g) the form and manner for making application for termination of the

pre-packaged insolvency resolution process under sub-section (3) of

section 54D;

(h) the form and manner of making public announcement under clause (c) of

sub-section (1) of section 54E;

(i) the manner of confirming the list of claims under clause (a), the manner of

informing creditors under clause (b), the manner of maintaining an updated list of

claims under clause (c), the form and manner of preparing the information

memorandum under clause (g), and such other duties under clause (i) of

sub-section (2) of section 54F;

(j) such other persons under clause (c), the manner of appointing

accountants, legal or other professionals under clause (e), such other matters

under sub-clause (iv) of clause (f) and the manner of taking other actions under

clause (g) of sub-section (3) of section 54F;

(k) the manner of determination of fees and expenses as may be incurred by

the resolution professional under sub-section (6) of section 54F;

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

(l) manner of bearing fees and expenses under sub-section (7) of

section 54F;

(m) the form and manner of list of claims and preliminary information

memorandum under sub-section (1) of section 54G;

(n) the conditions under clause (a) of section 54H;

(o) the manner of alteration of the composition of the committee of creditors

under the proviso to sub-section (1) of section 54-I;

(p) the form and manner of making application under sub-section (1) of

section 54J;

(q) the manner of inviting prospective resolution applicants under

sub-section (5) of section 54K;

(r) other conditions under sub-section (6) of section 54K;

(s) 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;

(t) the conditions under the proviso to sub-section (10) of section 54K;

(u) the manner and conditions under sub-section (11) of section 54K;

(v) the form and manner of filing application under the proviso to

sub-section (12) of section 54K;

(w) other requirements under sub-section (13) of section 54K; and

(x) the form for submission of written consent under clause (b) of

sub-section (2) of section 54-O.

2. The matters in respect of which the rules and regulations may be made are

matters of procedure and administrative detail, and as such, it is not practical to

provide for them in the proposed Bill itself. The delegation of legislative power is,

therefore, of a normal character.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

ANNEXURE

EXTRACTS FROM THE INSOLVENCY AND BANKRUPTCY CODE, 2016

(31 OF 2016)

PART II

INSOLVENCY RESOLUTION AND LIQUIDATION FOR CORPORATE PERSONS

CHAPTER I

PRELIMINARY

4. This Part shall apply to matters relating to the insolvency and liquidation of corporate

debtors where the minimum amount of the default is one crore rupees:

Provided that the Central Government may, by notification, specify the minimum amount

of default of higher value which shall not be more than one crore rupees.

5. In this Part, unless the context otherwise requires,—

(5) "corporate applicant" means—

(b) a member or partner of the corporate debtor who is authorised to make

an application for the corporate insolvency resolution process under the

constitutional document of the corporate debtor; or

(11) "initiation date" means the date on which a financial creditor, corporate

applicant or operational creditor, as the case may be, makes an application to the

Adjudicating Authority for initiating corporate insolvency resolution process;

(15) "interim finance" means any financial debt raised by the resolution

professional during the insolvency resolution process period and such other debt as

may be notified;

(19) "officer" for the purposes of Chapter VII of this Part, means an officer who

is in default, as defined in clause (60) of section 2 of the Companies Act, 2013 or a

designated partner as defined in clause (j) of section 2 of the Limited Liability Partnership

Act, 2008, as the case may be;

(25) "resolution applicant" means a person, who individually or jointly with any

other person, submits a resolution plan to the resolution professional pursuant to the

invitation made under clause (h) of sub-section (2) of section 25;

(27) "resolution professional", for the purposes of this Part, means an insolvency

Application

of this Part.

Definitions.

18 of 2013.

6 of 2009.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

professional appointed to conduct the corporate insolvency resolution process and

includes an interim resolution professional; and

11. The following persons shall not be entitled to make an application to initiate

corporate insolvency resolution process under this Chapter, namely:—

(a) a corporate debtor undergoing a corporate insolvency resolution process; or

CHAPTER III

LIQUIDATION PROCESS

33. (1)*

(3) Where the resolution plan approved by the Adjudicating Authority is contravened

by the concerned corporate debtor, any person other than the corporate debtor, whose

interests are prejudicially affected by such contravention, may make an application to the

Adjudicating Authority for a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of

clause (b) of sub-section (1).

34. (1) Where the Adjudicating Authority passes an order for liquidation of the corporate

debtor under section 33, the resolution professional appointed for the corporate insolvency

resolution process under Chapter II shall, subject to submission of a written consent by the

resolution professional to the Adjudicatory Authority in specified form, shall act as the

liquidator for the purposes of liquidation unless replaced by the Adjudicating Authority

under sub-section (4).

61. (1)

(4) An appeal against a liquidation order passed under section 33 may be filed on

grounds of material irregularity or fraud committed in relation to such a liquidation order.

77. Where—

(a) a corporate debtor provides information in the application under section 10

which is false in material particulars, knowing it to be false and omits any material fact,

knowing it to be material; or

(b) any person who knowingly and wilfully authorised or permitted the furnishing

of such information under sub-clause (a),

such corporate debtor or person, as the case may be, shall be punishable with imprisonment

for a term which shall not be less than three years, but which may extend to five years or with

fine which shall not be less than one lakh rupees, but which may extend to one crore rupees,

or with both.

Explanation.—For the purposes of this section and sections 75 and 76, an application

shall be deemed to be false in material particulars in case the facts mentioned or omitted in the

application, if true, or not omitted from the application as the case may be, would have been

sufficient to determine the existence of a default under this Code.

Persons not

entitled to

make

application.

Initiation of

liquidation.

Appointment

of liquidator

and fee to be

paid.

Appeals and

Appellate

Authority.

Punishment

for providing

false

information

in application

made by

corporate

debtor.

240A.(1) Notwithstanding anything to the contrary contained in this Code, the

provisions of clauses (c) and (h) of section 29A shall not apply to the resolution applicant in

respect of corporate insolvency resolution process of any micro, small and medium enterprises.

————

UTPAL KUMAR SINGH

Secretary General

Application

of this Code

to micro,

small and

medium

enterprises.

MGIPMRND—454LS—27-07-2021.

UPLOADED BY THE MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD,

NEW DELHI–110002 AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS,

DELHI–110054.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—SEC.2]

JAGANATHA

N ANANTHA

KUMAR

Digitally signed by

JAGANATHAN ANANTHA

KUMAR

Date: 2021.07.27 19:56:06

+05'30'