IBC-SECTION 20 TO SECTION 23

Section 20 Management of operations of corporate debtor as going concern

IRP shall to preserve and protect the value of the property of the corporate debtor and manage the operations of corporate debtor as going concern.

1. IRP has the authority to appoint accountants, legal and other professionals.
2. IRP has the authority to enter into contracts or to amend or modify the contract on the behalf of the corporate debtor.
3. If the operational creditors provided a loan to corporate debtors without security interest,then without prior consent of the creditors whose debt is secured over such encumbered property.
4. No consent should be required, if the operational creditor to be providing a loan to  corporate debtors and its total value of the loan  its should not be less than  the amount EQUIVALENT TO TWICE THE AMOUNT  OF THE DEBTS and its only to issue an instruction & to take all such actions for keeping the corporate debtor as a going concern.

  

SECTION 20 CHART

Section 21 Committee of Creditors

IRP shall determine the financial position of the corporate debtors after the collection of all claims received against the corporate debtors., constitute a COC.

Financial creditor or authorized representative of the financial creditor, if the financial creditors or its representative is a related party of the corporate debtor shall have not right to representation, participation, voting at a meeting of the COC.

If the corporate debtor has no money to paid financial creditor then corporate debtor instead of money, transfers a security or equity to the financial creditor and the financial creditor become a related party of the corporate debtor and in this case financial creditor have a right to vote and participate.

In two or more financial creditor owes to corporate debtor as a part of an agreement and there voting share shall be determined on the basis of financial debts owed to them.

Where any person is a financial creditor as well as an operational creditor:-

1. Financial creditor to paid the money to corporate debtor like as a financial debts and then financial creditor have a voting right or with voting share proportionate to the extent of financial debts owed to such creditors.
2. Operational creditor to the extent of operational debts owed by the corporate debtor to such creditor then, the person considered as operational creditors.

Financial debts extended as part of a consortium arrangement or syndicated facility provide for a agent to act for all financial creditor.

All decisions of the COC shall be taken by a vote of not less than 51% of voting shares of the financial creditors

1. COC has the right to require all the information from the RP in relation to the corporate debtor at any time during the CIRP.
2. RP shall provide a information to COC under sub-section (9) within a period of 7 days of such requisition. 

SECTION 21 CHART

Section 22 Appointment of resolution professional 

1. IRP has made a constitution of Committee of creditors and within 7 days 1st meeting was held.
2. COC in the first meeting by a majority vote should not be less than 66% of the voting share of the financial creditors and IRP to appoint as an RP but if IRP is replaced to RP.
3. IRP to appoint as an RP subject to a written consent from the IRP in the specified form and discussed or communicate its decisions with NCLT, corporate debtor and IRP.
4. If replace then application file given to NCLT and NCLT to the board if the board not confirm RP within 10days then direct the IRP continue to function as the  RP until such time as the board confirms the appointment of the proposed RP.

SECTION 22 CHART

Section 23 Resolution professional to conduct corporate insolvency resolution process

Subject to sec 27, RP shal conduct CIRP and manage the operations of corporate debtor during the CIRP, If after the expiry of the CIRP then  RP shall continue to manage the operations of corporate debtor until order is passed by the NCLT under section 31.

SECTION 23 CHART