{"id":21913,"date":"2023-04-19T12:25:25","date_gmt":"2023-04-19T06:55:25","guid":{"rendered":"https:\/\/gstguntur.com\/?p=21913"},"modified":"2023-04-19T12:26:59","modified_gmt":"2023-04-19T06:56:59","slug":"petition-for-corporate-insolvency-resolution-process-cs-professional-study-material","status":"publish","type":"post","link":"https:\/\/gstguntur.com\/petition-for-corporate-insolvency-resolution-process-cs-professional-study-material\/","title":{"rendered":"Petition for Corporate Insolvency Resolution Process – CS Professional Study Material"},"content":{"rendered":"

Chapter 15 Petition for Corporate Insolvency Resolution Process – Corporate Restructuring Insolvency Liquidation & Winding Up Notes<\/a> is designed strictly as per the latest syllabus and exam pattern.<\/p>\n

Petition for Corporate Insolvency Resolution Process – Corporate Restructuring Insolvency Liquidation & Winding Up Study Material<\/h2>\n

Question 1.
\nExplain the steps to be followed for the \u201cCorporate Insolvency Resolution\u201d process with time lines. (June 2017, 8 marks)
\nAnswer:
\nSteps to be followed for the Corporate Insolvency Resolution Process (CIRP)
\nare as under:
\n(a) A financial creditor (himself or jointly with other financial creditors), an operational creditor or the corporate debtor (through Corporate applicant i.e. corporate debtor itself; or an authorised member, partner of corporate debtor; or a person who has control and supervision over the financial affairs of the corporate debtor) may initiate corporate insolvency resolution process in case a default is committed by corporate debtor. The financial creditor\/operational creditor or corporate debtor as the case may be initiate the CIRP by making an application to NCLT under Sections 7, 8 and 10 respectively.<\/p>\n

(b) Financial creditor on default and operational creditor after ten days from the date of delivery of demand notice can initiate CIRP.<\/p>\n

(c) A financial creditor and corporate debtor shall propose the name of IRP and operational creditor may propose the name of IRP.<\/p>\n

(d) NCLT within 14 days of receipt of application by order shall admit or reject application. Before rejecting, it should give notice to rectify the defects within 7 days of receipt of notice.<\/p>\n

(e) NCLT to declare moratorium, appoint Interim Resolution Professional (IRP) for a term not exceeding thirty days from the date of appointment and cause public notice.<\/p>\n

(f) An Insolvency Professional shall make a Public Announcement in newspaper in one English language and regional Language not later than three days from the date of his appointment. Public announcement shall contain the information such as hame and address of the corporate debtor under CIRP, name of the authority with which corporate debtor is registered. The last date for submission of claims and date on which CIRP will be closed.<\/p>\n

(g) \u2018Insolvency commencement date’ starts from the date of admission of application and it is to be completed within 180 days of commencement which can be extended by ninety days only one time by NCLT.<\/p>\n

\"Petition<\/p>\n

(h) Interim Resolution professional to constitute Committee of Creditors comprising of financial creditors within 30 days from the date of his appointment.<\/p>\n

(i) Management of affairs of corporate debtors as a going concern, powers of Board of Directors or the partner of debtor shall stand suspended and exercised only by the IRP.<\/p>\n

(j) Committee of creditors within 7 days of the constitution either resolve to appoint IRP as resolution professional (RP) or replace IRP with another RP.<\/p>\n

(k) All decisions of Committee of Creditors shall be taken by vote not less than 66% of voting share of financial creditors. All financial creditors shall be part of Committee of Creditors and if any financial creditor is a related party of corporate debtor, then such financial creditor will not have any right of representation, participation or voting. If 76% of voting share of financial creditors consider the case complex and require extension of time beyond 180 days, the NCLT can grant a one-time extension of up to 90 days.<\/p>\n

(l) Preparation of information memorandum by IRP for formulating Resolution Plan by resolution applicant. A resolution applicant means any person who submits resolution plan to the resolution professional. Upon receipt of resolution plans, Resolution Professional shall place it before the Committee of Creditors for its approval.<\/p>\n

(m) Resolution Applicant prepares the Resolution Plan based on the information memorandum.<\/p>\n

(n) Submission of Resolution Plan by Resolution Applicant to the Committee of Creditors by IRP and to be approved by 66% of voting share of financial creditors.<\/p>\n

(o) IRP to submit approved Resolution Plan to NCLT which shall approve or reject it and order liquidation.<\/p>\n

(p) The approved plan shall be binding on the corporate debtor, and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan.<\/p>\n

(q) Moratorium ends on the date of approval\u2019.<\/p>\n

(r) Appeal may be made to NCLAT against the order passed by NCLT within 30 days from date of an order approving or rejecting the resolution plan.<\/p>\n

\"Petition<\/p>\n

Question 2.
\nWho are entitled and who are not eligible to make application to adjudicating authority for corporate insolvency resolution process as per Insolvency and Bankruptcy Code, 2016? (Dec 2017, 5 marks)
\nAnswer:
\nFiling of an Application before the Adjudicating Authority:
\nAny of the following can file an application before the Adjudicating authorities:<\/p>\n