Ibc 2016

INSOLVENCY & BANKRUPTCY
CODE, 2016 (IBC, 2016)

DR KAPIL BANSAL
GLA UNIVERSITY
MATHURA
Under Insolvency & Bankruptcy code (IBC, 2016):
 Voluntary winding up (as per IBC,2016)
 In case of Insolvency Under IBC, 2016 for

initiating CIRP(corporate insolvency
resolution process)
CIRP(Corporate Insolvency
Resolution Process) Under IBC,
2016
Corporate Insolvency Resolution
Process Under IBC, 2016
FILING OF PETITION ACCEPTANCE OR
TO NCLT BY REJECTION OF
CREDITORS AGAINST PETITION BY NCLT WI
CD 14 DAYS
IP’s WILL make an IRP APPOINTMENT

(INSOLVENCY
RESOLUTION PLAN) WI OF IP’s BY NCLT
180+ 90 days (REFER IBBI)
APPOINTMENT OF APPROVAL OF
COC (COMMITTEE OF IRP (PLAN) BY
CREDITORS) by IP’s COC
IF THE PLAN SUBMISSION OF

FAILS? PLAN TO NCLT
LIQUIDATIO
Introduction
• The Insolvency and Bankruptcy Code, 2016
(IBC) is the bankruptcy law of India and one
stop solution,
• It seeks to consolidate the existing framework
by creating a single law for insolvency and
bankruptcy.
• It was previously a long process
• It was notified in the official Gazette on 28 May’
2016
Key features
• Insolvency Resolution
• Insolvency Regulator(IBBI) SITE OF IBBI.docx
• Insolvency Professionals
• Bankruptcy and Insolvency Adjudicator
Insolvency Resolution process
• The Code outlines separate insolvency
resolution processes for individuals,
companies and partnership firms. The process
may be initiated by either the debtor or the
creditors
Insolvency Regulator
• The Code establishes the Insolvency and
Bankruptcy Board of India, to oversee the
insolvency proceedings in the country.
Insolvency Professionals
• The insolvency process will be managed by
licensed professionals. These professionals will
also control the assets of the debtor during
the insolvency process.
Bankruptcy and Insolvency Adjudicator
• National Company Law Tribunal (NCLT) would
deal with matters relating to corporate
insolvency, Limited Liability Partnership.
• Debt Recovery Tribunal (DRT) would deal with

individual insolvency and Unlimited partnership.
DRT
• There are 39 DRTs and 5 DRATs, which are
single Member Tribunals.
• The e-DRT project has been implemented in
all DRTs and DRATs.
Objectives of IBC
• It empowers all classes of creditors (secured
and unsecured lenders, employees, trade
creditors, regulatory authorities) to trigger a
resolution process in case of non-payment of a
valid claim.
Objectives of IBC
• Provides for immediate suspension of the
Board of Directors and promoters’ powers.
Provides for an insolvency professional to take
control of the Corporate debtor
Who can file for corporate Insolvency resolution process?
• Financial creditor (eg. Loan)

• Operational creditor (eg. Claim for goods and
services and employment)
The Code prescribes penalties for false and

frivolous petitions.
Duties of IP’s
– To collect all information relating to the

assets, finances and operations of the
corporate debtor for determining its
financial position
– To receive and collate all the claims
submitted by creditors
– To constitute a committee of creditors
– Take custody of assets and monitor the
assets.
EXAMPLES
• Essar steel
• Bhushan Steel
• Jet Airways
• Reliance communications
What will happen if the resolution
plan fails?
Answer: Liquidation/winding up
Liquidation is triggered in case the following
circumstances arise:
• Resolution plan fails

• Creditors’ committee does not reach an
agreement during the stipulated period
of 180 days or any extended period
thereof
• Creditors’ committee decides to proceed
with liquidation
• Corporate debtor fails to adhere to the
terms of the approved resolution plan.
•
News ET
• A total of 190 corporate insolvency
proceedings since the IBC came into
force have ended with successful
resolution plans till December 31,
2019.
• However, in 57.7% of the
proceedings, the court has ordered
liquidation of the corporate debtors’
assets.
News ET
• Separately, 579 voluntary liquidation

proceedings have been initiated by
corporate debtors till the end of
2019.
News ET
• Read more at:
https://economictimes.indiatimes.com/https
://
economictimes.indiatimes.com/industry/bank
ing/finance/lenders-set-to-recover-43-1-from-i
nsolvency-proceedings/articleshow/74144226
.cms?utm_source=contentofinterest&utm_me
dium=text&utm_campaign=cppst
MCQ
• When did the Insolvency and Bankruptcy Code
2016 receive the President’s assent
• A. 5 August 2016
• B. 28 May 2016
• C. 5 May 2016
• D. 15 June 2016
MCQ
• What is the applicability of IBC
A. Companies
B. LLP
C. Partnership
D. Individuals
MCQ
• Which Legislations are getting repealed on
enforcement of IBC:
• The Presidency Towns Insolvency Act 1909
• Provincial Insolvency Act 1920
• Sick Industrial Companies (Special Provisions)
Act 1985.
MCQ
• What is the impact of IBC on other legislation:
• IBC does Not have any effect on other
legislations
• IBC has an overriding effect on other
legislations.
MCQ
• Who can initiate Corporate Insolvency
Resolution Process (CIRP):
• Only Corporate Debtor
• Financial Creditor and Operational Creditor.
• Financial Creditor, Operational Creditor and
Corporate Debtor.
• Corporate Debtor and Financial Creditor.

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INSOLVENCY & BANKRUPTCY

CODE, 2016 (IBC, 2016)

 Voluntary winding up (as per IBC,2016)

 In case of Insolvency Under IBC, 2016 for

IP’s WILL make an IRP APPOINTMENT

IF THE PLAN SUBMISSION OF

• Debt Recovery Tribunal (DRT) would deal with

• Financial creditor (eg. Loan)

The Code prescribes penalties for false and

– To collect all information relating to the

• Resolution plan fails

• Separately, 579 voluntary liquidation

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