The document provides an overview of the key aspects of the Insolvency and Bankruptcy Code (IBC) of India. It summarizes the various laws that previously governed insolvency in India and the issues they posed. It then outlines the key features and objectives of the IBC, including establishing a time-bound process for insolvency resolution, promoting entrepreneurship and credit availability. The summary explains the various authorities established under the IBC and their roles, as well as the processes for corporate insolvency resolution, liquidation, voluntary liquidation and bankruptcy for individuals and firms.

2. • The Presidency Towns Insolvency
Act, 1909.
• The Provincial Insolvency Act,
1920.
• SARFAESI Act, 2002.
• Part VIA & VII & Section 391 of
Companies Act, 1956.
• Chapter XIX & Chapter XX of
Companies Act, 2013.
• Chapter XIII of Limited Liability
Partnership Act, 2008.
• RDDBFI Act, 1993.
• SICA Act, 1985.
Erstwhile laws & mechanism
Non-Legal Framework
 Selling of Debt to ARC.
 One time Settlement (OTS).
 Bilateral restructuring.
 JLF/CDR/SDR
“The Insolvency & Bankruptcy
Code, 2016”
“An act implemented by GOI to
override and nullify the
provisions of insolvency exist
under different individual laws.
Now this act will deal with
reorganisation and insolvency
resolutions of corporate persons
including Partnership Firms, LLP
& Individuals Concerns, in a
time bound manner for
eliminating the deterioration in
value of assets, promote
entrepreneurship, channelizing
financial deadlocks, availability
of credit while balancing the
interest of all the stakeholders
and to establish an Insolvency
and Bankruptcy Board in India
to deal with the matters of
insolvency resolution”
New Legal Framework
Now, consolidation of insolvency provisions under IBC, will surely be a useful
tool for the investors and creditors, and in future will improve the risk appetite
of the lenders, creditors and investors.
Overview of IBC

3. Insolvency & Bankruptcy Board
AdjudicatingAuthority-NCLT
Insolvency Professional Agency
Insolvency Professionals
Insolvency Entity
Committee of
Creditors
Information
Utilities
Insolvency & Bankruptcy Board (IBB)- a supreme authority/committee defined u/s 188
framed for implementing, monitoring and regulating the IBC; creating transparency &
governance in administration of IBC; will be involved in setting up the infrastructure &
accrediting Insolvency Professionals & Agency, Information Utilities & other Authorities.
Information Utilities (IUs)- a body registered with IBB u/s 210 of IBC, for the facilitation
of the financial & credit information of borrowers, it will accept, store and authenticate
the financial & credit information of borrowers from time to time and will create a single
database with readily accessibility for the authorized financial & operational creditors,
authorities of IBC and Court of law.
Information Professionals Agency (IPA)- an authority registered with the IBB u/s 201 of
IBC, for the registering insolvency professionals, promoting ethics and code of conduct
among professionals and protecting the interest of debtors, creditors or any other
aggrieved persons.
Information Professionals (IPs)- professionals registered with Insolvency Professionals
Agency u/s 207 of IBC, for executing the insolvency resolution, act as liquidator or
bankruptcy trustee; appointed by creditors of insolvency entity and having overriding
powers over the Board of Directors and conducting the resolution process in a transparent
manner.
Committee of Creditors (COC)- A committee of creditors involved for approving
resolution plan and governing transparency while resolution planning & implementation.
Insolvent Entity (IE)- An entity commits default in payment of debt due & payable to
financial, operational or other creditor.
Adjudicating Authority (AA)- National Company law Tribunal constitutes u/s 408 of
Companies Act, 2013 or DRT u/s 3 of RDBFA, 1993 for insolvency resolutions of corporate
insolvent entity; to entertain or dispose and insolvency application; approve, reject and
suggest changes in resolutions plans; resolving issues and protecting the interest of
aggrieved persons.
Overview of IBC

4. Default by Corporate Debtor
(Min amount INR 1 Lac)
 Non-payment of whole or any part of debt
becomes due and payable by the corporate debtor
amounts to “Default”. Minimum amount of
default for corporate insolvency resolution is ₹ 1
Lac, however Govt. may enhance this limit upto ₹
1 Crore.
 A corporate debtor undergoing or completed
resolution process in last 12 months is not eligible
for making an application u/s 7/9/10.
 After satisfying that, default has occurred,
Adjudicating Authority will either admit or reject
the application & in case of any mistake it will
give a notice to rectify the defect within 7 days of
notice.
 Corporate Insolvency Resolution process will start
from the date of admission of application by AA
and AA will appoint the interim resolution
professional by itself or the name proposed in the
application.
 COC will replace the interim professional with the
resolution professional within 7Days of
constitution of committee.
 Max time limit for the completion of process is
180 Days from date of admission of application,
however IP may request the AA to extend the
period by 90 days, subject to approval of COC by
casting 75% Voting Shares, it is also called
“MORATORIUM PERIOD”.
 IP has assigned the duty of safeguarding of
interest of creditors, preparing plan & IM and
conducting other necessary functions.
 Once the COC approve the plan prepared by IP,
then it will be submitted with AA for its
approvals.
 On the approval of plan by AA, it will be
implemented and executed with the moratorium
period
 In case of rejected of resolution by AA,
corporate entity will goes into liquidation
and it will be completed within maximum
time period allowed for resolution.
Overview of IBC
Filing an application u/s
7/9/10 of IBC before AA by
creditor or debtor.
AA shall within 7/14 days
either admit or reject the
application against the
corporate debtor.
Appointment of interim
resolution professional by
AA or applicant within 14
days of insolvency
commencement date.
Constitution of Committee
of creditors.
Affirmation or appointment
of Resolution professional
by casting 75% of voting
shares.
Approval of Resolution plan
and moratorium period by
COC with 75% voting shares.
Approval
by AA
Liquidation of
Entity
Implementation
of Plan
YES
NO

5. Payment of Cost of Insolvency
Resolution Process & Liquidation
Cost in full.
Overview of IBC
Secured
Creditor
comply with
provision of
Sec 52.
Workmen’s
due for
period of 24
months
Proceeds of Resolution/
Liquidation
Wages & unpaid dues owed to
employees for preceding 24M
(other than Workmen’s Due).
Financial Debts owed to
unsecured creditors
Central /
State Govt.
Dues for
preceding 2
years
Debts owed
to secured
creditor
(enforcement
of security)
Financial Debts owed to
unsecured creditors
Remaining Debts & Dues
Preference/Equity/ Partners
Liquidation Process
The Liquidator shall receive and collect
the claims of creditors within a period
of 30 days of commencement of
liquidation as per provisions of Sec 38
of IBC and liquidator shall verify the
same with the information or
document gathered from creditor and
information utilities.
After verification of claim insolvency
professional shall admit or reject the
claim and communicate the same to
creditor & corporate debtor within 7
days.
In case of rejection of claim by
liquidator, a creditor may appeal to AA
within 14 days of receipt of such
decision by creditor.
Section 53 of Insolvency & Bankruptcy
Code, 2016 has defined the order of
priority of distribution of assets or sale
proceeds of assets.
After complete liquidation of assets of
corporate debtor, liquidator shall make
an application to AA for the dissolution
of the entity & AA shall make an order
accordingly for dissolution of corporate
debtor.

6.  IBC also states the provision for
Liquidation of Corporate Entity on
voluntary basis.
 A Corporate entity which doesn’t
have committed any default in
payment of any debt and intends
to liquidate itself under the
provisions of IBC, 2016, can make
an application to Adjudicating
Authority for Voluntary
Liquidation.
 Majority of the directors have to
furnish an affidavit that:-
 Company has not any debt or it
will fully repay the debts from
sale proceeds.
 Company is not being liquidated
to defraud any person.
 Within 4 weeks of declaration,
company shall pass a special
resolution in General Meeting and
appoint a liquidator for the
company.
 Where, company owes any debt to
any person, creditors representing
2/3rd in value of debt shall
approve the resolution passed in
general meeting within 7 days of
passing resolution.
 Company is bound to inform ROC
for liquidation within 7 days of
resolution.
Overview of IBC
Section 55 of IBC stated the provision
and process for the Fast Track
Corporate Insolvency Resolution
Process for corporate entities.
Application for Fast Track Resolution
can be made only for corporate debtor
as specified by Govt. u/s 55, from time
to time.
Time period allowed for the Fast Track
Insolvency Resolution shall be
completed within 90 Days from
commencement date, however
Adjudicating Authority may extend it
for a period as it thinks fit, but not for
more than next 45 Days & it shall be
extended only once.
Application for Fast Track Corporate
Insolvency Resolution process can be
filed by creditor or corporate debtor
itself with the documentary evidence
of default available with the
Information Utilities or other means.
Once, the Adjudicating Authority will
admit the application for Fast Track
Corporate Resolution Process, then
resolution professional is bound to
follow the procedure as laid down for
Resolution Process under CHP II.

7. Overview of IBC
Debtor Eligible u/s 80
can apply for Fresh
Start for discharge of
qualifying debt by
filing an application.
Confirmation of Appointment or
Appointment of Resolution Professional
by Board as per provisions of Sec 82.
Resolution Professional shall examine
the application filed u/s 80 within 10
days of his appointment and submit a
report to AA, either recommending
acceptance of rejection of application
and also provide a copy to debtor.
AA may within 14 days of submission of
report by resolution professional pass an
order either admitting or rejection of
application u/s 81 and within 7 days of
passing order it shall provide a copy to
creditors mentioned in application.
Moratorium period of 180 days shall
commence from date of passing an
order by AA.
 Criteria defined u/s 80 for eligibility of
the debtor to apply for Fresh Start to
AA are:-
 Gross Annual Income doesn’t
exceed INR 60K;
 Aggregate Value of assets doesn’t
exceeds INR 25K;
 Aggregate Value of qualifying debts
doesn’t exceeds INR 35K;
 Not an undischarged bankrupt;
 Doesn’t own a dwelling unit;
 Fresh Start, Insolvency Resolution
or bankruptcy process is not
subsisting against him;
 No Fresh Start order has been
made in relation to him in
preceding 12 months.
 During Moratorium period:-
 Any pending legal action or
proceeding shall be deemed to
have been stayed;
 Subject to Sec 86, creditors shall
not initiate any legal action or
proceeding against the debtor;
 Debtor shall not act as director of
company or participate in
management of company;
 Not dispose of or alienate assets;
 Inform business partners about the
Fresh Start process against him.
 Any creditor being part of fresh start
and mentioned in order u/s 84, can file
its objection along with the documents
and information supporting the
objections. Resolution professional shall
examine the validity of objection and
make the necessary adjustments in the
amounts of claim.
 Finally AA shall pass a discharge order
on the basis of the final list of qualifying
debts prepared by professional.
Any Creditor mentioned in order u/s 84
may file his objections within 10 days of
receipt of order, which will be further
examine by Resolution professional.
Resolution professional shall prepare a
final list of qualifying debts and submit it
to AA at least 7days before end of
moratorium period & AA shall pass the
discharge order at end of period.

8. Overview of IBC
Commencement of interim moratorium
period on filing of application u/s
122/123; staying of all the legal
proceeding against the debtor.
In case Insolvency Professional is
proposed as Bankruptcy Trustee by
applicants u/s 122/123, then Board will
confirm that appointment within 10
days of receiving direction from AA,
otherwise it shall nominate & appoint
the Bankruptcy Trustee.
AA shall Pass Bankruptcy Order within 14
days of receiving of confirmation or
nomination of Bankruptcy Trustee u/s
125 & such order will be valid till the
discharge of debtor u/s 138.
On enforcing of Order u/s 126, estate of
bankrupt shall be vested in the
bankruptcy trustee and distributes
among creditors, subject to section 128.
Insolvency Resolution Process for
Individuals & Partnership Firms is
laid down under sections 94 to 120
of the Act, which is kindly similar to
the provisions for Corporate
Insolvency Resolution Process. It
will end on passing of discharge
order by AA u/s 119 of the Act.
Procedure laid down for bankruptcy
order is quite similar to resolution
process but having some different
time limits and procedures.
Bankruptcy Trustee shall prepare the list
of creditors within 14 days of
commencement date on the basis of
information disclosed by Bankrupt.
Summoning of meeting of creditors
within 21 days of commencement date
by Bankruptcy Trustee.
Filing of application by Debtor (122) or
Creditor(123) for the Bankruptcy Order,
subject to order passed by AA u/s
100/115/118, within a period of 3
Months of the date of order.
Trustee shall be the convener of
meeting of Creditors & shall decide
the quorum for conducting the
meeting and cannot adjourn the
meeting for more than 7 days.
Every Creditor or proxy of him have
the voting right in accordance of the
voting share decided by Board.
Bankruptcy Trustee shall conduct the
administration of Estate of bankrupt
in accordance of Chap V of the Act.
Bankruptcy Trustee shall apply to
AA for discharge order u/s 138
either on expiry of 1 year or
within 7days of approval by
Committee of Creditors and
bankrupt shall comply the Act.

9. Overview of IBC
The Insolvency & Bankruptcy Code, 2016 a biggest
reform of Govt. of India, which will unlock the potential
of lenders of banking system and will give a boost to
them to move forward in the Industry.
As of now, Indian Economy and Financial Sector in India
is suffering from a problem a huge NPAs in the balance
sheet of PSU/Private Banks due to slow down of
economy during 2012-2015 and various Global factors
like slow down of economy of China which lead to
reduction consumption of metals.
Sectors like Metals, Mining, Capital Goods, Electronics,
etc. which are highly correlated with the metals industry,
has faced the correction in prices of finished products
that lead to shut down of business by several companies
even big & established names of the Industry.
Now, IBC, 2016 will help the lender’s which has
provided huge amount of facility to Companies
belonging these sectors to recover their funds in a
timely and quick manner, so that these funds will be
recapitalise for further lending activities by banks.
Even will help the lenders to lend more confidently in
future and to take risk in a more efficient manner as they
now have a procedure for fast and timely recovery of
their funds in case of defaults.