Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Insolvency resolution process

vaishali singh (trainee) (395 Points)

22 May 2018

A corporate debtor having completed resolution process 12 months preceding the date of making application.explanation as to why is not entitled to make application?

Reply
Follow
Share

1 Replies

Kartikey Jain (Intern) (2382 Points)
Replied 24 May 2018

As per section 11 of the Insolvency & Bankruptcy Code, 2016:

“The following persons shall not be entitled to make an application to initiate corporate insolvency resolution process, namely:—

(a) a corporate debtor undergoing a corporate insolvency resolution process; or

(b) a corporate debtor having completed corporate insolvency resolution process twelve months preceding the date of making of the application; or

(c) a corporate debtor or a financial creditor who has violated any of the terms of resolution plan which was approved twelve months before the date of making of an application; or

(d) a corporate debtor in respect of whom a liquidation order has been made”

After Corporate Insolvency Resolution Process (CIRP) has been undertaken once and a resolution plan has been approved by the committee of creditors and the Adjudicating Authority(NCLT), Corporate Debtor needs to implement the Resolution plan to resolve its status.

It seems the intention of law makers is to give time of atleast 12 full months after CIRP completion for the reconstruction process to take its effect and to ensure that no more petitions are made against the Corporate Debtor during this period under IBC before NCLT which might hamper its revival and stability.