INSOLVENCY AND BANKRUPTCY CODE SECTION 8 TO SECTION 10

Section 8 Insolvency resolution by operational creditors

An operational creditors may occurs a defaults then delivered a demand notice or demanding payment of operational debts along with invoice to the corporate debtors in such form and the manners as may prescribed and within 10  days from the Receipts of the demand notice or copy of the invoice mention in sub-section-1 given to the intimation to the operational creditors.

1.  Existence of dispute and its Pendency
2. Repayment of unpaid operational debts 

SECTION 8 CHART

Section 9 Application for initiation of corporate insolvency resolution process by operational creditors

If the operational creditors not received any amount then operational creditors made an application and given to Adjudicating Authority (NCLT), operational creditors shall furnish a application along with following documents to be attached are as:-

1. Invoice
2. Affidavit
3. Certificate for financial institutions
4. Other information

NCLT within 14 days from the receipts of the application pass an order

If NCLT Admit the application then,

1. Application made is complete
2. No payment of unpaid operational Debts
3. Invoice notice for payment to corporate debtors has been delivered by the Operational Creditors
4. No notice of dispute
5. No disciplinary proceeding pending against any resolution professional proposed.

If NCLT Reject the application then, NCLT after giving a notice to the applicant to rectify the defect within 7 days

1. Application made is incomplete
2. Payment of unpaid operational Debts
3. Creditors has not delivered Invoice notice for payment to corporate debtors  
4. Notice of dispute has been received
5. Disciplinary proceeding pending against any resolution professional proposed

Section 9 Chart

Section 10 Initiation of corporate insolvency resolution process by corporate applicant

If the corporate applicant commit a defaults then application made by the corporate applicant along with the application following documents shall be furnish as a books of accounts & such other documents and Resolution professional proposed to acts as interim resolution professional and the special resolution passed by shareholders of the corporate debtors or the resolution passed by atleast 3/4^th of the total numbers of the parters of the corporate debtors, as the case may be, approving filing of the application then after all the document along with application given to the NCLT by the corporate applicant and then after NCLT within 14 days from the date of receipts of the applications pass the order,

If NCLT admit the application then application is complte and after commencement of corporate insolvency resolution process,

If NCLT Reject the application then application is incomplete and after giving a notice to the applicant to rectify the defect within 7 days.

Section 10 Chart

INSOLVENCY AND BANKRUPTCY CODE SECTION 11 TO SECTION 13

Section 11 Persons not entitled to make application

The Following Persons is not entitled to maker a application to initiate CIRP

1. Corporate debtors who is already undergoing CIRP.

2. Corporate debtors who has completed 12 months proceeding date of making  of 

    application.

3. Corporate debtors in respects of whom Liquidation order has made.

4. Corporate debtors/Financial creditors who violated terms of resolution plan approved 

    12 months before date of making of application.

SECTION 11 CHART

Section 12 Time – limit for completion of insolvency resolution process

1. CIRP shall be completed within 180 days from the date of admission of application to  initiate such process.

2. RP can file an application to NCLT to extend the period of beyond 180 days and  extended this period its important to passed the resolution at a meeting of the committee of creditors by a vote of 66% of voting shares.

3. If the NCLT is satisfied that the subject matter of CIRP has not completed within 180 days, its may be extended this period beyond the 180 days but not exceeding 90 days.

4. Extension shall be granted only once and futher Amendment for May2020 CIRP has been completed within 330 days from the insolvency commencement date  its similarly to be extend 90 days but not exceeding 90 days. If NCLT is satisfied the CIRP has not completed 330 days then extended this period. Total 420 days has to be given corporate insolvency resolution process.

Section 12A Withdrawal of application admitted under section 7,9 or 10.

NCLT may allow the withdrawal of application under the above section mention in Section 12A if the applicant with the approval of 90% of voting shares of committee of creditors.

SECTION 12/12A CHART

Section 13 Declaration of moratorium and public announcement

NCLT Appoint a IRP and IRP within 3 days has public announcement of the initation of CIRP and IRP call all the operational creditors for the submission of claims and after declare a moratorium for the purposes referred to in section 14.

SECTION 13 CHART

INSOLVENCY AND BANKRUPTCY CODE 2016

INSOLVENCY AND BANKRUPTCY CODE 2016

Introduction

The Insolvency and Bankruptcy Code passed by the Parliament is an invite upgrade of the current structure managing bankruptcy of corporate, people, organizations and different substances. It clears the path for much required changes while focusing on lender driven indebtedness goals.There were various covering laws and NCLT ( in case company)/DRT ( in case of firms & Individuals) deals with business failures and insolvency of organizations and people or a members India. The basic legistative categories are :-

(a) CH- 19 & Ch-20 of Companies Act, 2013

(b) Part VIA, Part VII and Sec- 391 of Companies Act, 1956

(c) RDDBFI Act, 1993

(d) SARFAESI Act, 2002

(e) SICA Act, 1985

(f) The Presidency Towns Insolvency Act, 1909

(g) The Provincial Insolvency Act, 1920

(h) CH-13, of LLP Act, 2008

MEANING OF INSOLVENCY:-  It’s a “state” where assets are insufficient to meet the liabilities. If untreated, insolvency will lead to bankruptcy for non-corporates and liquidation of corporate.

INSOLVENCY CHART

NOTE :- Winding up of the organizations is liquidations. liquidations can be proceeds BY RB ( REGULATORY BODIES), DIRECTORS, SHAREHOLDERS , UNPAID CREDITORS OF THE ORGANIZATIONS.

CIRP CHART

SECTION -4 CORPORATE INSOLVENCY RESOLUTION       PROCESS ( CIRP)

The process is applicable only if a corporate debtors are insolvent and not paid any amount to financial creditors or unable to pay a debts and its minimum amount defaults id 1 lacs rupees or more but shall not be more than 1 crore rupees,

Diagram:-

SECTION 4 CHART

Its most and most important section 7, its more relevant to the professional exams  point of view and this section 7 I discussed for you in the following diagram:-

Section -7 Initation of corporate insolvency resolution process by the financial creditors.

If the financial creditors are occurs a defaults then made an application is given to NCLT along with propers records of the defaults and name of the RP proposed to acts as IRP, And with another information is also to be given to the NCLT, and after receipts a application NCLT within 14 days pass an order, if defaults occurred then application is admitted by NCLT and Process a CIRP ( Corporate insolvency resolution process) and then within 7 days NCLT communicate to financial creditors and corporate debtors and similarly, if the defaults is not occurred then NCLT reject the application and also to provide or send a notice to the applicant to rectified the defects in the application and within 7 days also to communicate to financial creditors only in case defaults not occurred.

Diagram:

SECTION 7 CHART