TaxTMI 
TaxTMI 
Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019
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....ly to the bankruptcy process for personal guarantors to corporate debtors. 2. Definitions. In these regulations, unless the context otherwise requires, - (a) "associate" in relation to a creditor, a bankruptcy trustee or professionals appointed by the bankruptcy trustee shall have the same meaning as assigned to it in relation to a debtor in sub-section (2) of section 79, as may be applicable; (b) "bankruptcy process costs" shall mean - (i) the fees payable to the bankruptcy trustee; (ii) payments and expenses referred to in sub-regulation (1) of regulation 5, sub-regulation (4) of regulation 6, sub-clause (ii) of clause (c) and clause (f) of sub-regulation (3) of regulation 10, sub-regulation (3) of regulation 28, and sub-regulation (3) of regulation 31; (iii) such other costs and expenses directly relatable to the bankruptcy process, to the extent approved or ratified by the committee; (c) "Code" means the Insolvency and Bankruptcy Code, 2016 (31 of 2016); (d) "committee" means the committee of creditors as defined in sub-section (11) of section 79; (e) "corporate debtor" means a corporate person for whom the guarantor has given ....
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....ct of the corporate debtor. (2) A bankruptcy trustee, who has been an auditor of the guarantor at any time during the preceding three years, shall make a disclosure of remuneration received, year-wise for such audit, to the committee. (3) An insolvency professional, other than who has filed an application under section 122 or 123 on behalf of a guarantor or a creditor, as the case may be, shall provide a written consent in Form A to the Adjudicating Authority before his appointment as bankruptcy trustee in a bankruptcy process. 4. Fees of bankruptcy trustee. (1) The bankruptcy trustee shall be entitled to such fee and the fee shall be paid in such manner as decided by the committee. (2) In all cases other than those covered under sub-regulation (1), the bankruptcy trustee shall be entitled to a fee as a percentage of the amount realised from the estate of the bankrupt and of the amount distributed from such realisation, in accordance with Schedule I. 5. Appointment of professionals. (1) A bankruptcy trustee may appoint accountants, registered valuers, advocates or other professionals, as may be necessary, to assist him in the discharge of his duties, obligation....
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....nclude the following details- (a) a list of the assets and liabilities of the bankrupt as on the bankruptcy commencement date based on the books of the bankrupt: Provided that if the bankruptcy trustee has reasons to believe, to be recorded in writing, that the books of the bankrupt are not reliable, he shall also provide such estimates based on reliable records and data otherwise available to him. (b) the proposed plan of action in relation to administration of the estate, including the timeline in which it is proposed to be carried out and the estimated costs; (c) any further inquiry to be made in respect of the assets, business or affairs of the bankrupt; (d) details of the assets which are intended to be realised, including the following- (i) value of the assets, valued in accordance with regulation 33; (ii) intended manner of realisation of the assets and reasons thereof; (iii) expected amount of realisation; (iv) any other information that may be relevant for the realisation of the assets. (e) details of the excluded assets and other assets under sub-section (2) of section 155. (4) The preliminary report shall be confid....
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....ur of whom the property has been realised. (d) details of fee and remuneration due to and received by the bankruptcy trustee along with a description of the activities carried out by him; (e) details of the fee and remuneration paid to professionals appointed by the bankruptcy trustee along with a description of activities carried out by them; (f) other expenses incurred by the bankruptcy trustee in relation to the bankruptcy process; (g) status of any material litigation by or against the bankrupt; (h) filing of and developments in relation to disclaimer of onerous properties or leasehold interests under sections 160 and 162, or transactions under sections 164, 165 and 167. (i) accounts maintained by the bankruptcy trustee showing the receipts and payments made during the period of the report, as well as cumulative receipts and payments made since the bankruptcy commencement date; and (j) any other relevant aspect of the bankruptcy process. (4) The progress report for the fourth quarter of the financial year shall enclose audited accounts of the receipts and payments of the bankrupt for the financial year. (5) The progress reports shall be confidential d....
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....bankrupt; and (j) any other person connected or relevant to the bankruptcy process. (2) The bankruptcy trustee shall record and maintain the particulars of any consultation he had with the persons mentioned in sub-regulation (1). (3) Where the bankruptcy trustee after making reasonable efforts fails to obtain the information or cooperation from persons under sub-regulation (1), he may make an application to the Adjudicating Authority for appropriate directions as may be necessary for the conduct of the bankruptcy process. 13. Preservation of records. The bankruptcy trustee shall preserve a physical or electronic copy of the registers, books, reports, minutes of meetings and other records relating to bankruptcy process, including administration of estate of the bankrupt as per the record retention schedule as may be communicated by the Board in consultation with insolvency professional agencies. CHAPTER III CLAIMS 14. Future claims. (1) A person, who is entitled to distribution in the same manner as any other creditor, may submit a claim, which is not due and payable on the bankruptcy commencement date, to the bankruptcy trustee. (2) Subject to any cont....
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.... the list of creditors and the composition of the committee, if required, on the basis of the proof received under section 171. (4) The list of creditors, and any modification to the committee, mentioned in sub-regulation (3) shall be filed with the Adjudicating Authority within fifteen days from the last date for receipt of proofs of debt, under intimation to other creditors. (5) Any modification in the list of creditors under sub-regulation (3) shall not affect the validity of any decision taken in any meeting of the committee prior to such modification. (6) The list of creditors, as modified from time to time and filed with the Adjudicating Authority, shall be - (a) available for inspection by the persons who submitted claims with proof; (b) available for inspection by partners and guarantors of the bankrupt; (c) displayed on the website, if any, of the bankrupt. CHAPTER IV MEETINGS OF COMMITTEE AND VOTING 21. Notice for meeting. (1) A bankruptcy trustee may convene a meeting of the committee as and when he considers necessary and shall convene a meeting on a request by creditors having not less than thirty three percent of voting ....
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....of meeting. (1) The bankruptcy trustee shall preside over the meetings of the committee. (2) At the commencement of a meeting, the bankruptcy trustee shall take a roll call, when every participant, including those attending by proxy or through video conferencing, shall state, for the record, the following - (a) his name; (b) the capacity in which he is attending; (c) the creditor he is representing, if applicable; and (d) that he has received the agenda and all the relevant material for the meeting. (3) After the roll call, the bankruptcy trustee shall inform the participants of the names of all persons who are present for the meeting and confirm if the required quorum is complete. (4) The bankruptcy trustee shall ensure that the required quorum is present throughout the meeting. (5) From the commencement of the meeting till its conclusion, no person, other than the participants and any other person whose presence is required by the bankruptcy trustee, shall be allowed access to the meeting, without the permission of the bankruptcy trustee. (6) The bankruptcy trustee shall ensure that minutes are made in relation to each meeting of the creditors and ar....
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....trustee at least twenty-four hours prior to the meeting of committee. (3) A proxy may vote by electronic means on behalf of the creditor. CHAPTER V REALISATION OF ASSETS 27. Mode of sale. (1) The bankruptcy trustee shall ordinarily sell the assets of the bankrupt through an auction as specified in Part A of Schedule II. (2) The bankruptcy trustee may sell the assets by private sale, in the manner specified in Part B of Schedule II if- (a) the asset is perishable in nature; (b) the value of the asset is likely to deteriorate significantly if the sale is delayed; or (c) the selling price of the asset is higher than the reserve price of a failed auction. (3) The following persons shall not purchase or acquire any interest in the property of bankrupt, directly or indirectly, without permission of the Adjudicating Authority- (a) the bankruptcy trustee or any partner or director of the insolvency professional entity of which the bankruptcy trustee is a partner or director; (b) any professional appointed by the bankruptcy trustee for the bankruptcy process; (c) any creditor or associate of the bankrupt; and ....
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.... (1) of section 160, whichever is earlier. Explanation. - For the purpose of this regulation, a person interested in onerous property means - (a) any person who claims an interest in the disclaimed property; (b) any person who is under any liability in respect of the onerous property; or (c) where the disclaimed property is a dwelling house, any person who is in occupation of or entitled to occupy the dwelling house, on the date of filing of application. 30. Valuation of assets. (1) The bankruptcy trustee shall appoint a registered valuer to value the assets, which may or may not form part of the bankrupt's estate, when he is of the opinion that it is necessary or when a resolution to that effect has been passed by the committee. (2) The registered valuer appointed under sub-regulation (1) shall submit to the bankruptcy trustee the estimates of the realisable value of the asset computed in accordance with internationally accepted valuation standards, after physical verification of the assets of the bankrupt. (3) The bankruptcy trustee may appoint an additional registered valuer, for valuing the assets of the bankrupt if required in the circumstances of the c....
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.... or online banking transactions against the bank account. 33. Distribution of dividend to claimant of deceased creditor. (1) In the event an application is made by a claimant or heir of a deceased creditor for receiving dividend payable to such deceased creditor, the bankruptcy trustee shall satisfy himself as to the claimant's right and title to receive the dividend, and may call for evidence regarding such right or title. (2) On being satisfied of the veracity of the claim as per sub-regulation (1), the bankruptcy trustee may apply to the Adjudicating Authority for sanctioning the payment of such dividend or return to the claimant. 34. Distribution of dividend. (1) Subject to the provisions of sections 174 and 178, the bankruptcy trustee shall not commence distribution of dividend unless a preliminary report is filed with the Adjudicating Authority. (2) The bankruptcy process cost shall be deducted before any dividend is distributed under this regulation. 35. Return of amount. A creditor shall forthwith return any amount received by him in distribution, which he was not entitled to at the time of distribution, or subsequently. 36. Unclaimed proceeds....
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....O ACT AS BANKRUPTCY TRUSTEE (Under regulation 3(3) of the Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019) [Date] To The Adjudicating Authority [Name of Bench] From [Name of the Insolvency Professional] [Registration number of the Insolvency Professional] [Address of the Insolvency Professional registered with the Board] Subject: Written consent to act as bankruptcy trustee. 1. I, [name], an insolvency professional enrolled with [name of insolvency professional agency] and registered with the Board, note that I have been proposed to be appointed as bankruptcy trustee for the bankruptcy process of [name of the bankrupt]. 2. In accordance with regulation 3(3) of the Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019, I hereby give consent to the proposed appointment. 3. I declare and affirm as under: - (a) I am registered with the Board as an insolvency professional. (b) I am not subject to any disciplinary proceedings initiated by the Board or the Insolvency Professional Agency. (c) I do....
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.... E-mail Signature as my proxy to attend and vote for me and on my behalf at the meeting of the committee to be held on [insert date and time of meeting] at [insert venue of the meeting], and at any adjournment thereof in respect of the matters indicated in the notice of the meeting [provide details of the notice], as listed below: [insert matters as listed in the agenda] Signed this [insert date] day of [insert month] [insert year] Signature of creditor: Signature of proxy: SCHEDULE I FEES OF BANKRUPTCY TRUSTEE [Under regulation 4(2)] Amount of realisation in rupees (less bankruptcy process cost) Percentage of fee on the amount realised in the first six months in the next three months in the next three months thereafter On the first 25 lakh 10.00 7.50 5.00 3.75 On the next 50 lakh 7.50 5.00 3.75 2.80 On the next 1 crore 5.00 3.75 2.50 1.88 On the next 9 crore 3.75 2.80 1.88 1.41 On the next 40 crore 2.50 1.88 1.25 0.94 On the next 50 crore 1.25 0.94 0.68 0.51 On further sums realised 0.25 0.19 0.13 0.....