RECENT AMENDMENTS TO IBC REGULATIONS – PART IV

In this article we may see the amendments made in the IBBI (Liquidation Proceedings) (Fourth Amendment) Regulations, 2016 by the IBBI vide Notification No. IBBI/2026-27/GN/REG 151, dated 01.06.2026 which came into effect from 02.06.2026. Many amendments were made in liquidation proceedings regulations.  Some regulations were omitted, some new regulations were inserted and some regulations were substituted for the new one.

Omissions

The amendment omitted the following regulations-

• Regulation 2(1)(ea)(v) - costs incurred by the liquidator in carrying on the business of the corporate debtor as a going concern.
• Regulation 2(1)(ea)(vii) - the amount repayable under sub-regulation (3) of regulation 2A.
• Regulation 5(2) provides that the liquidator shall preserve a physical as well as an electronic copy of the reports and minutesreferred to in sub-regulation (1) for eight years after the dissolution of the corporate debtor. The amendment omitted the words ‘and minutes.’
• Regulation 12(2) - provide that where a stakeholder does not submit its claims during the liquidation process, the claims submitted by such a stakeholder, and duly collated by the interim resolution professional or resolution professional, as the case may be, during the corporate insolvency resolution process under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, shall be deemed to be submitted under section 38.
• Regulation 21A(i) – After the omission of words ‘be part of’ in the proviso to Regulation 21A(i) the said regulation provides that where a secured creditor does not intimate its decision withinfourteen daysfrom the liquidation commencement date, the assets covered under the security interest shall bedeemed to be relinquishedto the liquidation estate.
• The amendment omitted Regulation 31A which dealt with the Stakeholders’ Consultation Meeting.
• The amendment omitted Regulation 32B which dealt with the procedure for the conduct of meetings of the Consultation committee.
• The amendment omitted Regulation 34 (2)(b) which provides that the Asset Memorandum shall provide the following details in respect of the assets which are intended to be realized by way of sale value of the assets or business(s) under clauses (b) to (f) of regulation 32, valued in accordance with regulation 35, if intended to be sold under those clauses.
• Regulation 34 (5) provides that the liquidator shall share the asset memorandum with the Board and members of theConsultation committee having voting rights after receiving an undertaking from each member that such member shall maintain confidentiality of the information and shall not use such information to cause an undue gain or undue loss to itself or any other person.

The amendment omitted the words ‘members of the consultation’ and ‘having voting rights.’

• Regulation 35(3) provides that the Registered Valuers appointed under sub-regulation (2) shall independently submit to the liquidator the estimates of realisable value of the assets or business, as the case may be, computed in accordance with the such valuation standards as notified by the Board through circular, after physical verification of the assets of the corporate debtor.

The Amendment omitted the words ‘or business, as the case may be’.

• Regulation 35(4) provides that the average of two estimates received under sub-regulation (3) shall be taken as the value of the assets or business.
• Regulation 35(5) provides that where valuation is undertaken as per sub-regulation (2), the liquidator shall facilitate a meeting wherein registered valuers shall explain the methodology being adopted to arrive at valuation to the Consultation committee before finalisation of valuation reports.

The amendment omitted the word ‘Consultation’.

• Regulation 35(6) provides that the liquidator shall share the valuation reports with the members of the consultation committee after obtaining an undertaking that they shall maintain the confidentiality of such reports and shall not use these reports to cause an undue gain or undue loss to itself or any other person.

The amendment omitted the words ‘members of the consultation’.

• Regulation 35(7) provides that in case there is deviation of twenty five percent in the valuation of an asset class under sub-regulation (2) from valuation under regulation 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the liquidator shall facilitate a meeting wherein the registered valuers shall explain the reasons for the difference to the Consultation committee.

The amendment omitted the word ‘Consultation’.

• Regulation 37A(1) provides that a liquidator may assign or transfer a not readily realisable asset through a transparent process, with prior approval ofthe Shareholders Consultation committee in accordance with Regulation 31Afor a consideration to any person, who is eligible to submit a resolution plan for insolvency resolution of the corporate debtor.

The amendment omitted the words ‘Shareholders Consultation’ and ‘in accordance with Regulation 31A’.

• The Explanation to Regulation 40 (Liquidator to realise uncalled capital or unpaid capital contribution) provides that tor the purpose of this chapter and Schedule I, 'assets' include an asset, all assets, a set of assets or parcel of assets, businessas the case may be, which are being sold.

The amendment deleted the word ‘business’.

• Regulation 42(1) provides that subject to the provisions of section 53, the liquidator shall not commence distribution before the list of stakeholders and the asset memorandum has been filed with the Adjudicating Authority.

The amendment omitted the words ‘and the asset memorandum’.

• Regulation 44A provides that the liquidator shall, ²[with the approval] of the consultation committee, provide in the application along with the final report filed under regulation 45 for the manner in which proceedings in respect of avoidance transactions, if any, under Chapter III or fraudulent or wrongful trading under Chapter VI of Part II of the Code, will be pursued after the dissolution or closure of liquidation process and the manner in which the proceeds, if any, from such proceedings shall be distributed.

The amendment omitted the word ‘consultation’

• Regulation 45A (2) (e) provides that the liquidator shall preserve the records relating to or forming the basis of the constitution of consultation Committee and minutes of consultation committee meetings during liquidation process;

The amendment omitted the words ‘consultation’ and ‘consultation.

• Regulation 45A (2)(i) provides that the liquidator shall preserve the records relating to or forming the basis of Invitation, consideration and approval of plans / proposals / scheme received, in case of going concern sale in liquidation process or compromise or arrangement under section 230 of the Companies Act, 2013;

The Amendment omitted the words ‘going concern sale in liquidation process or’

• Regulation 45A(2)(n) provides that the liquidator shall preserve the records relating to or forming the basis of all reports, registers, documents such as preliminary progress reports, asset memorandum final report prior to dissolution, various registers and books, etc. mentioned in regulations 5 and 6 of these Regulations.

The amendment omitted the words ‘preliminary’ and ‘asset memorandum’.

• Regulation 45A (5) provides that the liquidator shall preserve the records relating to or forming the basis of preliminary report, asset memorandum.

The amendment omitted the words ‘preliminary report, asset memorandum’.

• Omissions in the schedule 1 (Mode of sale)-

• Sub-clause (1A) was omitted. The said clause provided that Subject to provisions of regulation 2B, the liquidator shall issue a public notice of an auction for sale under regulation 32 within forty-five days from the liquidation commencement date unless the consultation committee advises to extend the timeline.
• Sub-clause (1B) provides that the liquidator shall issue public notice for the next auction, in case of failure of the auction, within fifteen days from the last failed auction unless the consultation committee decidesto deviate from the specified time period.

The amendment omitted the word ‘consultation’.

• The amendment omitted the proviso to sub-clause (4) which provides that in cases where the reserve price of the failed auction of the asset was fixed as per the valuation under sub-regulation (1) of regulation 35, the liquidator may, on the advice of the consultation committee, reduce the reserve price up to twenty-five percent, once during the process.
• Clause 12B provides that the liquidator shall present the auction results, details of highest bidder, and the due diligence conducted on it to the consultation committee under Regulation 31A.

The amendment omitted the words ‘consultation’ and ‘under Regulation 31A’.

• The amendment omitted Schedule II which prescribes the forms to be filed in liquidation process.

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