The Insolvency and Bankruptcy Board of India ("IBBI") on September 24, 2024 amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations") vide the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2024 ("CIRP Amendment Regulations").
Regulation 16A which deals with appointment of the authorised representative for any class of creditors has been amended as follows:
1. Sub-regulation (1) provides that the interim resolution professional ("IRP") will select the insolvency professional, who is the choice of the highest number of financial creditors in the class in Form CA received under regulation 12(1), to act as the authorised representative of such creditors. The proviso to sub-regulation (1) has been amended to provide that the choice of an insolvency professional to act as an authorised representative by a financial creditor in a class in Form CA shall not be considered, if the Form CA is received after the time stipulated in the public announcement; and
2. Sub-regulation (2) requires the IRP to apply to the Adjudicating Authority for appointment of the authorised representative selected in the manner mentioned above, within 2 (two) days of verification of claims received from creditors under regulation 12(1). Sub-regulation (2) has been amended to insert a proviso, which provides for the insolvency professional selected in the manner mentioned above to act as the interim representative for a class of creditors till the time the application for appointment of the authorised representative for such class of creditors is pending approval before the Adjudicating Authority. Such interim representative shall have all rights and duties as would have been exercised by an authorised representative and will be entitled to attend all the meetings of the committee of creditors.
The aforesaid amendment provides much needed clarity on the aspect of appointment of the authorised representative for any class of creditors, especially in cases where the application for appointment is pending before the Adjudicating Authority. In view of the amendment, the insolvency professional selected by the financial creditors in the manner provided in the CIRP Regulations can act as the interim representative till receipt of approval from the Adjudicating Authority and exercise all rights and duties as that of an authorised representative.
The CIRP Amendment Regulations came into force on September 24, 2024 and can be accessed, here.
Please also find a copy of the CIRP Regulations (amended till February 15, 2024), here.
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