Comments on proposed changes to Corporate Insolvency Resolution and Liquidation Framework under the IBC, 2016

It gives us immense pleasure to announce that CIFL – Centre for Insolvency and Financial Laws, Maharashtra National Law University Mumbai has submitted its comments on the ‘Proposed Changes to the Corporate Insolvency Resolution and Liquidation Framework under the IBC, 2016’ [released on December 23, 2021] to the Insolvency and Bankruptcy Board of India.

Our research team consisted of Kareena Sobti, Megha Kamboj, Monika Saini, Shubham Dhamnaskar and Yashaswi Pande. The team wrote the comments under the able guidance of our Centre Coordinator, Mr. Raghav Pandey.

The research team has provided comments on Part 2 to Part 5 of the Discussion Paper. Firstly, in case of avoidance proceedings, the team has recommended a change to the amendment proposed for Section 47 of the IBC, keeping in mind the rights of the minority shareholders. With respect to the time period for approval of resolution plans, the team has argued that the same can act as a useful indicative time period. However the requirement that the AA be required to record its reasons in writing where the time period is not followed does not stand to resolve the major reasons for delays in the approval of resolution plans. With regards to closure of a voluntary liquidation process, the team believes that not involving the AA in the process is a step in the right direction. The team has recommended that the provision for approval of creditors can be further detailed according to the time at which the process is withdrawn, and the liquidator should be made to submit an affidavit at the time of closure, to make the process more efficient. Lastly, in case of the IBC fund, the team has argued for regulators providing a detailed structure for the utilization of the fund.

This initiative is in furtherance of our aim to contribute to substantive discourse in the field of insolvency law by conducting high-quality research to assist policymakers.