NCLT 11012017

By
CS S DHANAPAL
Sr. Partner
M/s . S Dhanapal & Associates
A Firm of Practising Company Secretaries
S.DHANAPAL
Notified Sections
of
Companies Act, 2013
relating to NCLT
wef 01.06.2016
09.09.2016 &
15.12.2016
S.DHANAPAL
Partner, S Dhanapal & Associates
Sections Date Provisions
Clause (23) of section 2 15.12.2016 Definition of Company Liquidator

Sub-section (7) of section 01.06.2016 Legal action for false or incorrect information at the
7 [except clause (c) and time of incorporation
(d)]
Clause (c) and (d) of sub- 15.12.2016 Legal action for false or incorrect information at the
section (7) of section 7 time of incorporation
Sub-section (9) of section 15.12.2016 transfer of assets on winding up / dissolution of a
8 company
Second proviso to sub- 01.06.2016 Conversion of Public to Private Limited
section (1) of section 14
Sub-section (2) of section 01.06.2016 Conversion of Public to Private Limited
14
Section 48 15.12.2016 Variation of shareholder's rights
Sub-section (3) of section 01.06.2016 Rollover of existing redeemable preference shares

55
Proviso to Clause (b) of 01.06.2016 Changes in voting rights by Consolidation or sub-
sub-section (1) of section division of share Capital
61
S.DHANAPAL
Sub-sections (4) to (6) of 01.06.2016 Changes in terms of issue of Debentures to facilitate
section 62 Conversion into equity shares
Section 66 15.12.2016 Reduction of share capital
Sub-sections (9) to (11) of 01.06.2016 Action by Debenture trustees once the secured
section 71 Assets becomes insufficient
Section 75 01.06.2016 Action against company by defrauding depositors by
non payment
Section 97 01.06.2016 Power to call for AGM in case of failure by the
Company
Section 98 01.06.2016 Power to call for meetings other than AGM
Section 99 01.06.2016 Punishment for failure to comply with Tribunals

Direction regarding meetings
Sub-section (4) of section 01.06.2016 Order for inspection in case of failure by the
119 Company
Section 130 01.06.2016 Re-opening of accounts by authorities
Section 131 01.06.2016 Voluntary revision of financial statements
S.DHANAPAL
Second proviso to sub- 01.06.2016 Removal / change of auditor before due date and
section (4) and sub- suo moto action by NCLT for removal
section (5) of section 140
Sub-section (4) of section 01.06.2016 Removal of directors – representation & relaxation
169 of provisions in certain cases
Section 213 01.06.2016 Investigation into the affairs of the Company
Sub-section (2) of Section 01.06.2016 Appointment of inspectors

216
Section 218 01.06.2016 Protection of employees during investigation
Section 221 01.06.2016 Freezing of assets of Company on inquiry &

investigation
Section 222 01.06.2016 Imposition of restrictions upon securities
Sub-section (2) of section 15.12.2016 Action against company or directors on inspectors

224 report
Sub-sections (5) of section 01.06.2016 Action against company or directors on inspectors
224 report
Section 226 15.12.2016 Voluntary winding up of company etc., not to stop
investigation proceedings
S.DHANAPAL
Section 227 09.09.2016 Legal advisers and bankers not to disclose certain
information
Section 230 [except sub- 15.12.2016 Compromises, Arrangements and Amalgamations
section (11) and (12)], Section
231 to 233 and Section 235 to
240
Section 241 01.06.2016 Application to Tribunal for relief in cases of
oppression, etc
Section 242 [except clause (b) 01.06.2016 Powers of Tribunal
of sub-section (1), clause (c) &
(g) of
sub-section (2)]
clause (b) of sub-section (1) of 09.09.2016 Powers of Tribunal
Section 242
clauses (c) & (g) of sub-section 09.09.2016 Powers of Tribunal
(2) of Section 242
Section 243 to 245 01.06.2016 Consequence of termination or modification of
certain agreements, Right to apply under Section
241 and Class Action
S.DHANAPAL
Section 246 09.09.2016 Application of certain provisions to proceedings
under Section 241 or Section 245
Section 270 to 303 15.12.2016 Winding up provisions
Section 324 and 326 to 15.12.2016 Provisions applicable to every mode of winding up
365 and official liquidators
Proviso to section 370 15.12.2016 Continuation of pending legal proceedings
Section 372 15.12.2016 Power of court to stay or restrain proceedings
Section 373 15.12.2016 Suits stayed on winding up order
Section 375 15.12.2016 Winding up of unregistered companies
Section 376 15.12.2016 Power to wind up foreign companies, although

dissolved
Section 377 15.12.2016 Provisions of Chapter cumulative
Section 378 15.12.2016 Saving and construction of enactments confering

power to wind up partnership firm, association or
company etc in certain cases
S.DHANAPAL
Sub-section (2) of section 15.12.2016 Application of Sections 34 to 36 and Chapter XX
391
Reference of word 01.06.2016 Order for production of documents by Registrar
Tri unal in su -section
(2) of section 399
Section 415 to 433 01.06.2016 National company law tribunal and appellate
tribunal
Sub-section (1)(a) and (b) 01.06.2016 Transfer of pending proceedings
of section 434
Clause (c) of sub-section 15.12.2016 Transfer of certain pending proceedings
(1) of section 434
Sub-section (2) of section 01.06.2016 Appeal against CLB order
434
Section 441 01.06.2016 Compounding of offences
Section 466 01.06.2016 Dissolution of CLB & consequential provisions
S.DHANAPAL
Amalgamation & reduction of Share Capital
Class Action Suits
Oppression & Mismanagement
Re-opening & Revision of Financial Statements
Compounding of Offence
Refusal for Share registration & Rectification of Register of
Members
Insolvency & Bankruptcy Code, 2016
S.DHANAPAL
Partner, S Dhanapal & S.DHANAPAL
Associates
S.DHANAPAL
The new Act
CA 2013 opens up prescribes CA 2013 brings in
two new elaborate certain changes in
Presently Company dimension to disclosure norms the corporate
(Court) Rules 1959 mergers and and sending restructuring
provides for amalgamations information to all related provisions:
procedure. Under concerned
the new Act, authorities
Tribunal has
released the rules Cross border mergers By adding new
propositions
called
the companies
(compromises, Mergers outside By deviating from
arrangements and judiciary process certain established
judicial propositions
amalgamations)
rules, 2016
By codifying certain
judicial propositions
and common
practices
S.DHANAPAL
Particulars Companies Act, 1956 Companies Act, 2013
Section 391 230
Authority High Court NCLT
Approval by Members Majority of 3/4th in value Majority of 3/4th in value
/ Creditors
Voting In person / proxy In person / proxy / Postal
Ballot
Disclosures to latest financial position of the Additional disclosure of
Authority company, reduction of share capital if
latest auditors report, any included in the scheme
pendency of any investigation
proceedings etc
Effectiveness of the Shall not be effective unless a No such provision; but
order copy of the order is filed with requires the order to be
the ROC filed with ROC
S.DHANAPAL
Notice to be served on: Members, Creditors, Central
Government, Income Tax Authorities, RBI, SEBI, ROC, Liquidator,
Stock exchanges, Competition Commission of India, etc
Notice to be placed on website & published in Newspaper
Option to be provided for voting through proxy / postal ballot
S.DHANAPAL
1. Copy of draft scheme approved by Board of merging
companies
2. Confirmation for having filed the scheme with ROC
3. Report by directors of the merging companies,
explaining the effect of the scheme on Shareholders,
Key Management Personnel etc., laying out in
particular the share exchange ratio and specifying any
special valuation difficulties
4. Copy of valuation report, if any
5. Copy of Accounts drawn up to a date not preceding the
board meeting date (held for consideration of scheme)
by more than 6 months.
S.DHANAPAL
Auditors’ certificate Meeting of creditors may
regarding compliance be dispensed with by the
The scheme under
with accounting Tribunal, if at least 90% of
this section to
standards to be creditors (in value) agree to
clearly indicate an
submitted to Tribunal the scheme by way of an
before passing of order appointed date affidavit
from which it shall
be effective
Objections shall be made only by simplified procedure in relation

persons holding not less than 10% to a scheme of merger or
of the shareholding / having amalgamation between two or
outstanding debt amounting to more small companies or
not less than 5% of the total between a holding company
outstanding debt as per the latest and its wholly-owned subsidiary
audited financial statement company or such other class or
classes of companies as may be
prescribed
S.DHANAPAL
Procedure explained –
• Notice to be served on ROC and OL inviting suggestion within 30 days.
• Scheme to be approved by
- the respective members or class of members at a general meeting holding at least
ninety per cent of the total number of shares, and
- majority representing nine-tenths in value of the creditors or class of creditors of
respective companies
• Each company to file declaration of solvency with ROC.
• Copy of Scheme to be filed by transferee co. with CG, Registrar and OL
• ROC and OL to communicate objections/suggestion on the Scheme to the CG within

30 days else it will be presumed that they do ’t have any objections/suggestions. CG
will register the scheme thereafter.
S.DHANAPAL
Procedure explained – IF SCHEME U/S 233 IS NOT IN PUBLIC INTEREST
 CG may make any application to the Tribunal within 60 days to consider the
application under Section 232 if it is of the opinion that such a scheme is not in
public interest or in the interest of the creditors.
 On receipt of an application from the Central Government or from any person, if

the Tribunal, for reasons to be recorded in writing, is of the opinion that the
scheme should be considered as per the procedure laid down in section 232, the
Tribunal may direct accordingly or it may confirm the scheme by passing such
order as it deems fit.
 A copy of the order under sub-section (6) confirming the scheme shall be
communicated to the Registrar having jurisdiction over the transferee company
and the persons concerned and the Registrar shall register the scheme and issue a
confirmation thereof to the companies and such confirmation shall be
communicated to the Registrars where transferor company or companies were
situated.
S.DHANAPAL
Section 234 contains for the first time provisions regarding
merger or amalgamation with companies registered in
other countries.
Countries shall be notified from time to time by the Central

Government
Central Government may make rules, in consultation with

the Reserve Bank of India, in connection with mergers and
amalgamations provided under this section.
A foreign company, may with the prior approval of the

Reserve Bank of India, merge into a company registered
under this Act or vice versa.
The expression foreig co pa y means any company or

body corporate incorporated outside India whether having
a place of business in India or not.
S.DHANAPAL
 Section 235 - Power to acquire shares of shareholders
dissenting from scheme or contract approved by majority.
 Section 236 - Purchase of minority shareholding.
 Section 237 - Power of Central Government to provide for

amalgamation of companies in public interest.
 Section 238 - Registration of offer of schemes involving

transfer of shares.
 Section 239 - Preservation of books and papers of

amalgamated companies.
 Section 240 - Liability of officers in respect of offences

committed prior to merger, amalgamation, etc.
S.DHANAPAL
S.DHANAPAL
Before
Whom?
• Member(s) •Company
•Director(s)
• Depositor(s) • National •Auditor / firm
• Central Company Law •Expert / advisor/
Government Tribunal consultant
•Any other person
Who can Against

File? Whom?
S.DHANAPAL
Member(s) /
class of
them
Company Company
having share not having
capital share capital
100 / more ; or Member(s) singly 1/5th or more

/ jointly holding
10% / more; or
10% of issued
total number of
Which ever is less share capital members
S.DHANAPAL
Deposit holders
/ Central
Government
Depositor(s)
Central
or any class
Government
of them
Member(s) singly /
100 / more ; or If it believes that the
jointly holding 10%
affairs conducted in a
10% / more; or of total value of
manner prejudicial to
outstanding
Which ever is less public interest
deposits
S.DHANAPAL
If affairs of the company are being conducted in a manner prejudicial to the
interests of the company or its members or depositors application can be
made seeking following orders:
to restrain the company from committing an act which is ultra vires the
MOA & AOA
to restrain the company from committing breach of MOA & AOA
to declare a resolution altering the MOA & AOA as void if the resolution
was passed by suppression of material facts or obtained by mis-statement
to the members or depositors
to restrain the company and its directors from acting on such resolution
to restrain the company from doing an act which is contrary to the
provisions of this Act or any other law for the time being in force
to restrain the company from taking action contrary to any resolution
passed by the members
to claim damages or compensation or demand any other suitable action
to seek any other remedy
S.DHANAPAL
Issue Public Notice & newspaper
advertisement within 7 days
Place the public notice in company website
A copy of the application shall be served on

the ROC & RD
Shall serve a copy to Central Government

and take into considerations the
representations made by CG
S.DHANAPAL
Oppression & Mismanagement
S.DHANAPAL
The affairs of the Central Government is of
The material change has
the opinion that the affairs
company have been or taken place in the
of the company are being
are being conducted in a management or control of
conducted in a manner
manner the company, whether by
prejudicial to public interest
1. prejudicial to
the public interest 1. An alteration of
BOD;
2. prejudicial or
2. Manager;
oppressive to him
It may itself apply to
or any other 3. In the ownership
tribunal
member(s) of Company’s Shares
3. Prejudicial to 4. In its membership;

interest of the 5. Any other manner
Company
S.DHANAPAL
Member(s) /
class of
them
Company Company
having share not having
capital share capital
100 / more ; or Member(s) singly 1/5th or more

/ jointly holding
10% / more; or
10% of issued
total number of
Which ever is less share capital members
S.DHANAPAL
any member(s) holding not less than 1/10th of the issued
share capital of the company, subject to the condition that
the applicant(s) has paid all calls and other sums due on his
or their shares, shall also have right to apply u/s 241.
On an application, Tribunal shall waive all the

requirements & enable the members to apply under section
241
Where any members of a company are entitled to make an

application, any one or more of them having obtained the
consent in writing of the rest, may make the application on
behalf and for the benefit of all of them
S.DHANAPAL
S.DHANAPAL
Particulars Prevention of Oppression & Class Action Suits
Mismanagement u/s 245
u/s 241 to 244
Who can file? Member(s) Member(s)
Depositor(s)
Against Whom? Company & its Statutory Company
Appointees Director(s)
Auditor / firms
Experts
Advisors
Consultants
Any others
Matters for Any current / past activity / to Any current, past or future
which it can be prevent recurrence activity, including to desist
filed from one or more particular
action that have not been
taken
yet.
S.DHANAPAL
S.DHANAPAL
• Central Government
Who • Income Tax Authorities
can • SEBI
• Any other Statutory regulatory body / authority
ask? • Court of Competent jurisdiction
• Tribunal
• If relevant earlier accounts were prepared in fraudulent

When manner
can be • If the affairs of the Company were mismanaged during
the relevant period, casting a doubt on the reliability of
asked? financial statements
S.DHANAPAL
If it appears to the directors of the Company that the financial statement of the
Company or the reports of the Board do not comply with the provisions of
section 129 or section 134, the company can make an application to the Tribunal;
The tribunal shall make such orders as it thinks fit
The order copy passed by the Tribunal shall be filed with the
Registrar
Such revised financial statement or report shall not be prepared

or filed more than once in a financial year
S.DHANAPAL
S.DHANAPAL
 Any offence punishable under this Act with
fine only are compoundable by –
(a) the Tribunal; or
(b) Regional Director up to a limit of Rs.
5 lakhs
 If investigation has been already initiated or
is pending under this Act, then
compounding will not be granted.
S.DHANAPAL
Offences compoundable Offences not
only with the permission
Compoundable
of Special Court
• With imprisonment or • with imprisonment
fine, or only or
• With imprisonment or • with imprisonment and
fine or both also with fine
S.DHANAPAL
 Every application for the compounding of an offence
shall be made to the Registrar
Registrar will forward the same along with its

comments to Tribunal or the Regional Director or
any officer authorized by the Central Government
Notice to be given to the Registrar within 7 days

from the date on which the offence is so
compounded before or after the institution of any
prosecution
S.DHANAPAL
Companies Act, 2013 Companies Act, 1956
•
Power of Power of
Regional Regional
Director: Director:
maximum fine maximum fine
doesn t ex eed doesn t ex eed
Rs. 500,000 Rs. 50,000
Power of Power of
NCLT: CLB:
maximum maximum
fine exceed fine exceed
Rs. 500,000 Rs. 50,000
S.DHANAPAL
S.DHANAPAL
UNLISTED COMPANY:
 If partly paid up shares are being transferred and the transferee is known to
be financially incapable of paying balance calls.
 If partly paid up shares are being transferred to a minor incapable of entering

into a contract.
 In case due call money has not been paid by the transferor.
 When the transferor is a debtor of the company, and the company has a lien
on such shares.
 If instrument is incomplete, irregular and defective, and not properly

stamped.
 On other reasons, just and equitable and are in the general interests of the
company.
S.DHANAPAL
LISTED COMPANY:
 Where the transfer of security is in contravention of

any law composition of
 Where the Board of Director, may change, to such on

extent, because of transfer, which may affect interest
of company.
 Where the transfer is prohibited by any law
S.DHANAPAL
Appeal •Either dismiss / order
•Within 30 days of receipt
of the instrument, the •Transfer shares within
refusal shall be •Transferee may appeal to 10 days
Tribunal against refusal
intimated with reasons •Rectification of register
within 30 days from the
date of notice or 60 days •Company to pay
from date of submission damages
of instrument
Company to Action of
Intimate Tribunal
S.DHANAPAL
Application to Tribunal / a competent court outside
India (in case of foreign members) can be made in the
following instances
1. If name of any person, without sufficient cause is
removed / entered;
2. If default / unnecessary delay takes place; etc.
The Tribunal, after hearing either dismiss the appeal

or direct the transfer / transmission to be registered
within 10 days and order for rectification of the
register.
S.DHANAPAL
Insolvency
& Bankruptcy
Code, 2016
S.DHANAPAL
S.DHANAPAL
It has 255
Received
sections with
assent of the
eleven
President on
schedules for
28th May,
amendment to
2016
various acts
S.DHANAPAL
November 21, • Insolvency and Bankruptcy Board of India (Insolvency
2016 Professional Agencies) Regulations, 2016
• Insolvency and Bankruptcy Board of India (Model

November 21,
Bye-Laws and Governing Board of Insolvency
2016
Professional Agencies) Regulations, 2016
November 29, • Insolvency and Bankruptcy Board of India (Insolvency

2016 Professionals) Regulations, 2016
• Insolvency and Bankruptcy Board of India (Insolvency

December 1, 2016 Resolution Process for Corporate Persons)
Regulations, 2016
December 15, • Insolvency and Bankruptcy Board of India

2016 (Liquidation Process) Regulations, 2016
S.DHANAPAL
• Insolvency and Bankruptcy Board of India
August (Salary, Allowances and other terms and
conditions of service chairperson and
29, 2016 members) Rules, 2016
December • Insolvency and Bankruptcy (Application to

Adjudicating authority) Rules, 2016
1, 2016
S.DHANAPAL
Notification dated Notification dated
Notification dated Notification dated
30.11.2016 effective 09.12.2016 effective
05.08.2016 01.10.2016
from 01.12.2016 from 15.12.2016
• Section 188 to 194 • The head office of • clause (a) to clause • section 33 to section
(both inclusive) came the Insolvency and (d) of section 2 54
into effect Bankruptcy Board of (except with regard
India shall be at New to voluntary
Delhi liquidation or
Bankruptcy)
• section 4 to section
32
• section 60 to section
77
• section 198
• section 231
• section 236 to
section 238
• clause (a) to clause
(f) of sub-section (2)
of section 239
S.DHANAPAL
Notification dated 19.08.2016 Notification dated 01.11.2016 Notification dated 15.11.2016
•section 3 - •section 3 – •section 199 to section 207 [both

•clause (1); •clause (2) to clause (4); inclusive];
•clause (5); •clause (6) to clause (21); •sub-section (1) of section 208-
•clause (22); •clause (23) to clause (25); •clause (c);
•clause (26); •clause (27); •clause (e);
•clause (28); •clause (29) to clause (36); •sub-section (2) of section 208;
•clause (37); •section 196; •section 217 to section 220 [both
•section 221; •section 197; inclusive];
•section 222; •section 223; •section 251;
•section 225; •sub-section (2) of section 239- •section 253;
•section 226; •clause (ze) to (zh); •section 254; and
•section 230; •clause (zl) to (zm); •section 255.
•section 232; •sub-section (2) of section 240-

•section 233; •clause (a) to (zm);
•sub-section (1) and clause (zd) •clause (zu) to (zzzc);
of sub-section (2) of section 239; •section 244;
•sub-section (1) and clause (zt) of •section 246 to section 248 [both
sub-section (2) of section 240; inclusive];
•section 241; and •section 250; and
•section 242. •section 252.
S.DHANAPAL
S.DHANAPAL
Financial Creditor Board Operational Creditor
Any person to whom a financial A person to whom an
Insolvency & Bankruptcy
debt is owed and includes a operational debt is owed and
Board of India established
person to whom such debt has includes any person to whom
been legally assigned/ under sub-section(1) of such debt has been legally
transferred Section 188 assigned / transferred
Insolvency Professional Resolution Professional

A person enrolled u/s 206 with An Insolvency Professional
an insolvency professional appointed to conduct the
agency as its member and Corporate Insolvency Resolution
registered with the Board as an Process and includes an Interim
Insolvency professional u/s 207 Resolution Professional
Voting Share
Share of voting rights of a single financial
creditor in the committee of creditors which is
based on the proportion of the financial debt
owed to such financial creditor in relation to
the financial debt owed by the Corporate
debtor
S.DHANAPAL
• Insolvency Resolution Process
• Information Utilities
• Insolvency professionals and agencies
• Insolvency Regulator
• Adjudicatory Authorities
• Insolvency and Bankruptcy Fund
S.DHANAPAL
Initiation by
Creditor or
Debtor
Distribution of Filing of
Assets Application with
NCLT
Liquidation
Appointment of
interim IP
In case of Constitution of
Rejection Creditors
Committee
Resolution &
Approval of
plan
S.DHANAPAL
APPLICABILITY INITIATOR
Corporate debtors
with minimum
default of Rs.
1,00,000/- 1. Financial Creditor
2. Operation
Creditor
CG may prescribe a 3. Corporate Debtor
higher amount up to
Rs. 1,00,00,000/-
(One Crore)
S.DHANAPAL
 Application in Form 1
 Fees – Rs. 25,000/-
 Details of record of default, name of

resolution professional, any other detail shall
be furnished with application;
 Adjudication Authority (NCLT) within 14 days

ascertain the existence of default;
S.DHANAPAL
NCLT shall admit the NCLT shall dismiss
application if the application if
1. Default has occurred 1. Default has not occurred
2. Application is complete 2. Application is not complete
3. No disciplinary action pending 3. Disciplinary action is pending

against the Resolution Professional against the Resolution Professional
Prior to rejection, notice for

CIRP shall commence from the date
rectification of the defect within 7
of admission of application
days, shall be given to the applicant
S.DHANAPAL
On occurrence of default, the debtor shall be
delivered a demand notice along with invoice in
form 3 or Form 4
Within 10 days of receipt of demand notice, the

debtor shall bring to the notice of creditor
either:
Existence of dispute (if

Repayment of unpaid
any) & record of
operational debt along
pendency of suit /
with proof
arbitration
S.DHANAPAL
 If the Operational Creditor has not heard
from the debtor within 10 days of demand
notice, he may file for CIRP.
 Fees – Rs. 2,000/-
 Propose a resolution professional to act as
Interim Resolution Professional
 Adjudication Authority (NCLT) within 14 days
ascertain the existence of default;
S.DHANAPAL
NCLT shall admit the NCLT shall dismiss
application if the application if
1. Application is complete 1. Application is incomplete
2. No repayment of debts 2. There has been repayment of debts
3. Invoice / notice for payment delivered 3. Invoice / notice for payment is not
by the creditor delivered by the creditor
4. No record of dispute / no notice of 4. There is record of dispute / notice of

dispute received dispute received
5. No disciplinary proceeding pending 5. Disciplinary proceeding pending

against the Resolution Professional against the Resolution Professional
Prior to rejection, notice for rectification

Corporate Insolvency Resolution Process
of the defect within 7 days, shall be
shall commence
given to the applicant
S.DHANAPAL
 Fees - Rs. 25,000/-
 Details of books of accounts, proposed
interim resolution professional, etc shall be
furnished
 Within 14 days the Adjudicating Authority
(NCLT) shall either admit / dismiss the
application
 Prior to rejection, notice shall be given to
rectify errors within 7 days
 CIRP shall commence from the date of
admission of application
S.DHANAPAL
•Undergoing CIRP
•Completed CIRP 12 months
preceding application date
Corporate
Debtor •Who has violated any terms of
resolution plan preceding 12
months
•On whom liquidation is ordered
Financial •Who has violated any terms of

resolution plan preceding 12
Creditor months
S.DHANAPAL
Public Resolution
Moratorium
announcement Professional
Interim Resolution
Institution of suits,
Detailed info shall Professional shall
transferring of
be disclosed be appointed within
assets etc
14 days by NCLT
Effective till the In such manner as

Tenure shall not
date of completion prescribed in
exceed 30 days
of CIRP Regulations
S.DHANAPAL
 Management of affairs shall vest with IRP
 Powers of BOD shall stand suspended &
exercised by IRP
 IRP shall have access to all the corporate
documents
 Managers & officers shall report to IRP
 Financial institutions maintaining accounts
(auditors) shall act on the instructions of IRP
S.DHANAPAL
Claim:
Collect Info on assets a. A right to payment, whether /
& liabilities – collate not such right is reduced to
judgment, fixed, disputed,
all claims undisputed, legal, equitable,
secured or unsecured;
Constitute Creditors b. Right to remedy for breach of
contract under any law for the
Committee – Monitor time being in force, if such
assets & operations breach gives rise to a right to
payment, whether or not such
right is reduced to judgment,
Take Custody of assets - File fixed, matured, unmatured,
info with Information Utility (a disputed, undisputed,
person registered with the Board secured or unsecured
as Information Utility)
S.DHANAPAL
Time Limit Co-operation from Personnel
Personnel of the
180 days Corporate Debtor
(promoter, directors, manager,
(from the date of admission) KMP, employee etc.)
+ shall cooperate with the
90 days Interim Resolution
(extension by NCLT- if Professional
approved by 75% votes in
creditors committee meeting) Failing which, IRP can
apply to NCLT for
directions
S.DHANAPAL
1. To appoint accountant, legal / other professional
2. To enter into / amend contracts / transactions
3. To raise Interim finance

4. To issue instructions to personnel
5. Any other action as necessary
S.DHANAPAL
 After collation of Claims & determination of
financial position – Financial Creditors
Committee shall be constituted
 A Related Party, who is a creditor – shall not

have any right of representation, participation
/ voting in the committee meeting
 All the decisions of the Committee shall have

a minimum of 75% voting share
 Resolution professional to provide details /

info to the Committee within 7 days.
S.DHANAPAL
1st Meeting of Creditors Committee to be called within 7 days
of its constitution Bankruptcy Board to
approve the
appointment
Replace Interim If not heard from

Resolution Board within 10
Appoint of Professional days – NCLT shall
order the IRP to
Resolution
continue until the
Professional – Board confirms
with 75% voting
Re-appoint Communicate the
share
Interim decision to IRP,
Resolution NCLT, Corporate
Debtor
Professional
S.DHANAPAL
Meetings shall be conducted by Resolution Professional
Who can No rights to

Representation
attend Vote
Insolvency
1. Members of Professional can be
1. Members of
the suspended appointed by any
Committee;
BOD creditor to represent
2. Members of him
2. Partners
suspended BOD
3. One
3. Operational Fees for Insolvency
representative
Creditors & their Professional shall be
of operational born by the creditor
representatives
Creditor himself
S.DHANAPAL
 Preserve & protect assets;
 Immediate custody of assets;
 Represent & act on behalf of the Corporate
Debtor
 Raise interim finances;
 Appoint accountant, legal / other professionals;
 Maintain an updated list of claims;
 Convene & attend all meetings of creditors
committee;
 Prepare information memorandum;
 Invite prospective lenders, investors etc;
 Present all resolution plans at meetings;
 File application for avoidance of transactions; etc
S.DHANAPAL
Creditors Committee Meeting
Resolution Professional can be
With 75% voting shares approval
replaced any time
Adjudicating Authority (NCLT)
The name of proposed resolution professional shall be forwarded to NCLT
Bankruptcy Board of India

If any disciplinary proceeding pending against the
If approved – the new Resolution
new resolution professional – the existing RP shall
professional shall be appointed continue till the appointment of new RP
S.DHANAPAL
Items that need approval Procedure
 Raise interim finance in excess
of limits;  Approval in creditors
 Create security interest over committee
assets;
 Change capital structure;  With 75% voting shares
 change in ownership interest;
required
 Instructions to auditors for
debit transactions in excess of
limits;  Any action taken
 Undertake related party without approval is
transactions;
VOID & such action
 Amend constitutional
documents; shall be reported to the
 Delegate authority to any Bankruptcy Board
others;
 Dispose any shares;
 change in management; etc S.DHANAPAL
Information Submission of Adjudicating
Memorandum Resolution Plan Authority
•In electronic •Approval subject •Shall either

form; to 75% voting approve / reject
•Contents shares in the resolution
prescribed in creditors plan
regulations committee •If approved – the
•Resolution moratorium order
professional can shall cease to
attend the have effect &
meeting, but can •All the
not vote unless documents shall
he is a financial be forwarded to
creditor the Board
S.DHANAPAL
Who can file When can file Time Limit
•Creditor / •Corporate debtor •90 days

corporate debtor with assets & •(from the date of
•Along with income below admission)
requisite proofs level amp by CG; •+
amp by •Corporate debtor •90 days
Bankruptcy board with such class of
•(extension by
creditors / such
NCLT- if
amount amp by
approved by 75%
CG
votes in creditors
•Such other committee
category amp by meeting)
CG
S.DHANAPAL
Particulars Timelines(days)
Filing of Insolvency application – Details of what needs to be X

mentioned in the application has been specified
Adjudicating Authority- admission or rejection of application - X+14
Before rejecting an application, the Adjudicating Authority shall give a
notice to the applicant to rectify the defect in the application within 7
days. If admitted, Adjudicating Authority to declare moratorium
upon admission.
Insolvency Resolution Professional appointment (X+14) + 14
Constitution of Committee of Creditors (X+14) + 14 + 10
Appointment of final resolution professional
Submission of Resolution plan (X+14) + 180
If approved- Moratorium ceases to have effect
If rejected- Initiation of Liquidation
Insolvency Resolution Process Completion
Insolvency Resolution Process Extension (X+14) + 180 +90
S.DHANAPAL
S.DHANAPAL
Adjudicating authority does not receive
a resolution plan;
Resolution plan is rejected by

the Adjudicating authority;
Creditors Committee resolves

to liquidate;
If the approved resolution plan is contravened

by the corporate debtor;
S.DHANAPAL
Admission /
rejection of
claims
Determination
Verification
of value of
of claims claims
Appeal against
Consolidation
the decision of
of claims within
the liquidator
30 days of
within 14 days
commencement
if any claim is
of liquidation
rejected
S.DHANAPAL
• Transfer of property / interest to the benefit
of creditor
Preferential
Transaction • Shall not include transactions in ordinary
course of business
• To a related party - 2 years of insolvency

commencement
Relevant
Time • Person other than related party – one year
preceding the insolvency commencement
S.DHANAPAL
Application by
Avoid UT Relevant Time
Creditor
• UT – gift / • Related party – • If the liquidator /

transactions with within 2 years resolution
under value, not in preceding the professional fails
ordinary course of insolvency to report to the
business commencement; NCLT – creditor /
• Liquidator / member / partner
Resolution • Any person – may apply to NCLT
professional can within 1 year for such orders
apply to NCLT to preceding the
declare such insolvency
transactions as commencement;
void & reverse the
effect
S.DHANAPAL
Where assets are
completely
liquidated
Liquidator shall
apply to
Adjudicating
authority
The order of
liquidation shall be
filed within 7 days
with registrar
S.DHANAPAL
A corporate person can liquidate itself even if there is no
default committed;
• stating not liquidated to defraud

• Annex – audited financial statements (previous 2 years) &
Declaration
from directors valuation report of assets
• Approval for liquidation & appointment of Insolvency

Special Professional (within 4 weeks of declaration)
Resolution
• Creditors representing 2/3rds in value of debt shall approve

the special resolution within 7 days – the Voluntary
Creditors
Approval
liquidation process shall commence
S.DHANAPAL
•Within 7 days the Registrar of Companies & Board shall
be intimated
ROC & Board
•Where affairs are completely wound up and assets

liquidated – liquidator shall apply to adjudicating
Adjudicating
Authority
authority for dissolution
•Adjudicating authority shall order for dissolution – copy

of order shall be filed with Registrar within 14 days
Dissolution
S.DHANAPAL
1 Insolvency Resolution cost and liquidation cost
2 Debts to secured creditor (who have relinquished their security interest)

and workmens’ dues (for 24 months before commencement)
3 Wages and unpaid dues to employees (other than workmen) (for 12

months before commencement)
4 Financial debts to unsecured creditors and workmen’s dues for earlier

period
5 Crown debts and debts to secured creditor following enforcement of

security interest
6 Remaining debts
7 Preference shareholders
8 Equity Shareholders or partners

S.DHANAPAL
National Company Law
Supreme Court
Appellate Tribunal
• With 30 days • With 45 days

• of order of NCLT • of order of NCLAT
•+ •+
• 15 days • 15 days
• (if satisfied that there • (if satisfied that there
was sufficient cause for was sufficient cause for
not filing within 30 not filing within 45days)
days)
S.DHANAPAL
Particulars Penalty
Fraudulent initiation of proceedings / One Lakh to One Crore
furnishing false info in application
Concealment of Property / Imprisonment – 3 years to

Misconduct in case of CIRP / 5 years or / and
Falsification of books of corporate debtor Fine one lakh to One Crore
/ Willful & material omissions from
statements relating to affairs of corporate
debtor / False representation to creditors
/ contravention of moratorium or
resolution plan / false information in
application by corporate debtor
Transactions defrauding Creditors / non Imprisonment – 1 year to 5

disclosure of dispute or repayment of debt years or / and
Fine one lakh to One Crore
S.DHANAPAL
S.DHANAPAL
S.DHANAPAL

NCLT 11012017

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NCLT 11012017

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By

Clause (23) of section 2 15.12.2016 Definition of Company Liquidator

Sub-section (3) of section 01.06.2016 Rollover of existing redeemable preference shares

Section 99 01.06.2016 Punishment for failure to comply with Tribunals

Section 131 01.06.2016 Voluntary revision of financial statements

Sub-section (2) of Section 01.06.2016 Appointment of inspectors

Section 221 01.06.2016 Freezing of assets of Company on inquiry &

Sub-section (2) of section 15.12.2016 Action against company or directors on inspectors

Section 372 15.12.2016 Power of court to stay or restrain proceedings

Section 373 15.12.2016 Suits stayed on winding up order

Section 375 15.12.2016 Winding up of unregistered companies

Section 376 15.12.2016 Power to wind up foreign companies, although

Section 378 15.12.2016 Saving and construction of enactments confering

Section 466 01.06.2016 Dissolution of CLB & consequential provisions

Notice to be placed on website & published in Newspaper

Option to be provided for voting through proxy / postal ballot

Objections shall be made only by simplified procedure in relation

• Each company to file declaration of solvency with ROC.

• Copy of Scheme to be filed by transferee co. with CG, Registrar and OL

• ROC and OL to communicate objections/suggestion on the Scheme to the CG within

 On receipt of an application from the Central Government or from any person, if

Countries shall be notified from time to time by the Central

Central Government may make rules, in consultation with

A foreign company, may with the prior approval of the

The expression foreig co pa y means any company or

 Section 236 - Purchase of minority shareholding.

 Section 237 - Power of Central Government to provide for

 Section 238 - Registration of offer of schemes involving

 Section 239 - Preservation of books and papers of

 Section 240 - Liability of officers in respect of offences

Who can Against

100 / more ; or Member(s) singly 1/5th or more

Place the public notice in company website

A copy of the application shall be served on

Shall serve a copy to Central Government

3. Prejudicial to 4. In its membership;

100 / more ; or Member(s) singly 1/5th or more

On an application, Tribunal shall waive all the

Where any members of a company are entitled to make an

• If relevant earlier accounts were prepared in fraudulent

The tribunal shall make such orders as it thinks fit

Such revised financial statement or report shall not be prepared

Registrar will forward the same along with its

Notice to be given to the Registrar within 7 days

 If partly paid up shares are being transferred to a minor incapable of entering

 If instrument is incomplete, irregular and defective, and not properly

 Where the transfer of security is in contravention of

 Where the Board of Director, may change, to such on

 Where the transfer is prohibited by any law

The Tribunal, after hearing either dismiss the appeal

• Insolvency and Bankruptcy Board of India (Model

November 29, • Insolvency and Bankruptcy Board of India (Insolvency

• Insolvency and Bankruptcy Board of India (Insolvency

December 15, • Insolvency and Bankruptcy Board of India

December • Insolvency and Bankruptcy (Application to

•section 3 - •section 3 – •section 199 to section 207 [both

•section 222; •section 223; •section 251;

•section 225; •sub-section (2) of section 239- •section 253;

•section 226; •clause (ze) to (zh); •section 254; and

•section 230; •clause (zl) to (zm); •section 255.

•section 232; •sub-section (2) of section 240-

Insolvency Professional Resolution Professional

• Insolvency professionals and agencies