Creditor to update its claim as and when the claim is satisfied after Insolvency commencement date: IBBI [Read Notification]

Creditor - insolvency commencement date - IBBI - Taxscan

The Insolvency and Bankruptcy Board of India (IBBI) has notified Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2021 which seeks to amend Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

The Board inserted Rule 12A in respect of the Updation of claim which said, “a creditor shall update its claim as and when the claim is satisfied, partly or fully, from any source in any manner, after the insolvency commencement date.”

The Board notified that where any activity Activity requiring filing of Form CIRP 7, if not completed by the specified date the interim resolution professional or resolution professional, as the case may be, shall file Form CIRP 7 within three days of the said date, and continue to file Form CIRP 7, every 30 days, until the said activity remains incomplete.

However, subsequent filing of Form CIRP 7 shall not be made until thirty days have lapsed from the filing of an earlier Form CIRP 7.

It was clarified that only one Form CIRP 7 shall be filed at any time whether one or more activity is not complete by the specified date.

For Example, if public announcement is not made by Insolvency commencement date (T)+3rd day, Form CIRP 7 shall be filed by T+6th day. Thereafter, if public announcement is made on T+16th day, no further Form CIRP 7 will be filed. However, if public announcement is not made till T+33rd day, Form CIRP 7 shall be filed on T+36th day.

If public announcement is not made by T+3rd day, Form CIRP 7 shall be filed by T+6th day. Thereafter, if public announcement is made on T+16th day, no further Form CIRP 7 will be filed. However, if RP is not appointed by T+30th day, though Form CIRP 7 becomes due by T+33rd day, it shall be filed on 30th day from the filing of first Form CIRP 7, that is, on T+36th day.

If public announcement is not made by T+3rd day, Form CIRP 7 shall be filed by T+6th day. Thereafter, if either public announcement is not made till T+33rd day or RP is not appointed by T+30th day, Form CIRP 7 shall be filed on T+36th day.”

In the Schedule to the principal regulations, Form C in respect of Submission of Claim by Financial Creditors shall be substituted.

The notification shall come into force from March 15, 2021.

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