The Insolvency and Bankruptcy Board of India has notified the amendment to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2022 to enable the payment of a regulatory fee of 0.25% on the approval of resolution plan under section 31.
Regulation 31A of the Liquidation Regulations, provides that a SCC shall be constituted within 60 days from LCD, to advise the liquidator on matters relating to (a) appointment of professionals and their remuneration under regulation 7 and (b) sale under regulation 32. The decision(s) taken by the liquidator prior to the constitution of SCC shall be placed before SCC in its first meeting, for information. However, the liquidator takes significant decisions related to appointment (including that of valuers) and sale of assets in the first 60 days (i.e., before the constitution of SCC), and mandating such decisions to be placed before the committee on ex-post basis weakens the accountability of liquidator. Further, the present composition of SCC includes representatives of all classes of stakeholders, irrespective of the amount of their claims (in proportion to total claims against the CD).
As per the notification issued on Tuesday, “(1) A regulatory fee calculated at the rate of 0.25 percent of the realisable value to creditors under the resolution plan approved under section 31, shall be payable to the Board, where such realisable value is more than the liquidation value: Provided that this sub-regulation shall be applicable where resolution plan is approved under section 31, on or after 1st October 2022. (2) A regulatory fee calculated at the rate of one per cent of the cost being booked in insolvency resolution process costs in respect of hiring any professional or other services by the interim resolution professional or resolution professional, as the case may be, for assistance in a corporate insolvency resolution process, shall be payable to the Board, in the manner as specified in clause (cb) of sub-regulation (2) of regulation (7) of Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
