Liquidation Process (Second Amendment) Regulations 2021

Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2021- NOTIFICATION

No. IBBI/2021-22/GN/REG079.- In exercise of the powers conferred by clause (t) of sub-section (1) of section 196 read with section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Insolvency and Bankruptcy Board of India hereby makes the following regulations further to amend the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, namely: –

1. (1) These Regulations may be called the Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2021.
   (2) They shall come into force on the date of their publication in the Official Gazette.
   
2. In the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (hereinafter referred to as the principal regulations), in regulation 2, in sub-regulation (1), in clause (ea), in sub-clause (vii), the words “to contributories” shall be omitted.
   
3. In the principal regulations, in regulation 2B, in sub-regulation (1), the words, figures and brackets “subsections (1) and (4) of” shall be omitted.
   
4. In the principal regulations, in regulation 15, in sub-regulation (2), in clause (e), for the words and figures “in accordance with Chapter III of Part II”, the words and figure “under Part II” shall be substituted.
   
5. In the principal regulations, in regulation 31A –
   
   (i) for sub-regulation (1), the following sub-regulation shall be substituted, namely:-
   
   “(1) The liquidator shall constitute a consultation committee within sixty days from the liquidation commencement date, based on the list of stakeholders prepared under regulation 31, to advise him on matters relating to-
   
   (a) appointment of professionals and their remuneration under regulation 7;
   (b) sale under regulation 32, including manner of sale, pre-bid qualifications, reserve price, amount of earnest money deposit, and marketing strategy:
   Provided that the decision(s) taken by the liquidator prior to the constitution of consultation committee shall be placed before the consultation committee for information in its first meeting.”;
   
   (ii) for sub-regulation (4), the following sub-regulation shall be substituted, namely:-
   “(4) If the stakeholders of any class fail to nominate their representatives, under sub-regulation (3), such representatives shall be selected by a majority of voting share of the class, present and voting.”;
   
   (iii) in sub-regulation (10), in the proviso, after the words “in writing”, the words “and mention it in the next progress report” shall be inserted.
   
6. In the principal regulations, in regulation 44, in sub-regulation (1), the words “Chapter III of” shall be omitted.
   
7. In the principal regulations, in regulation 47, in the table relating to model timelines for liquidation process, in column (3), against Sl. No. 9, the words “and announcement to public” shall be omitted.
   
8. In the principal regulations, in Schedule I, in paragraph 1-
   
   (i) in clause (3), the following provisos shall be inserted, namely: –
   
   “Provided that the liquidator shall not require payment of any non-refundable deposit or fee for participation in an auction under the liquidation process:
   Provided further that the earnest money deposit shall not exceed ten percent. of the reserve price.”.
   
   (ii) in clause (5), for the words, “make a public announcement”, the words, “issue a public notice” shall be substituted.
   
   (iii) after clause (11), the following clause shall be inserted, namely:-
   “(11A) Where the liquidator rejects the highest bid in an auction process, he shall intimate the reasons for such rejection to the highest bidder and mention it in the next progress report.”.
   
9. In the principal regulations, in Schedule II, in Form H, in para 2, in the table-
   (i) the Sl. No.19 and the entries thereof shall be omitted.
   (ii) in column (2), against Sl. No. 23 and Sl. No. 24, for the word “announcement”, the word “notice” shall respectively be substituted.

Note: The Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 were published vide notification No. IBBI/2016-17/GN/REG005 dated 15th December, 2016 in the Gazette of India, Extraordinary, Part III, Section 4, vide No. 460 on 15th December, 2016 and were last amended by Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2021 vide notification No. IBBI/2020-21/GN/REG069 dated the 04th March, 2021 in the Gazette of India, Extraordinary, Part III, Section 4, vide No. 91 on 04th March, 2021.

Notification

Also Read: 

• Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations 2021- NOTIFICATION
• IBBI’s Electronic Platform for hosting Public Notices of Auctions of Liquidation Assets under the IBBI (Liquidation Process) Regulations, 2016

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