The Insolvency and Bankruptcy Board of India (IBBI) has notified the final norms for fast track corporate insolvency resolution process (CIRP)..The Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 (Regulations) have been notified to give effect to Chapter IV of the Insolvency and Bankruptcy Code, 2016..Chapter IV of the Code provides for the substantive provisions relating to fast track insolvency, while the Regulations lay down the procedural framework to give effect to these provisions..The eligibility criteria [pdf] for fast track CIRP requires the corporate debtor to be either:.a small company as defined under Section 2(85) of the Companies Act, 2013;a startup (other than a partnership firm) as defined by the Government;an unlisted company with total assets not exceeding Rs. 1 crore.For any of the above categories, the corporate debtor may apply to the National Company Law Tribunal (NCLT) with necessary details for initiation of a fast track CIRP..Section 56 of the Code mandates that the fast track CIRP must be completed within a period of 90 days from the insolvency commencement date i.e. the date on which the NCLT passes the order for initiation of CIRP. This is half the time period allowed for any other application. However, on an application made by the appointed resolution professional, this period may be extended by 45 days, based on NCLT’s discretion..The resolution professional, who is required to submit a report certifying the constitution of a committee (of creditors) within 21 days of his appointment, may within this period also make an application to the NCLT to convert the fast track CIRP to normal CIRP under, if he is of the opinion that fast track CIRP isn’t applicable to the given case..Apart from providing the eligibility criteria for the resolution professional, the Regulations also require a stakeholder (or someone who claims to be one) to prove his claim for debts owed to him..The Regulations also deal with claims by operational creditors, financial creditors, workmen and employees and other stakeholders and all other aspects relating to a claim and its verification..Just like the Liquidation Guidelines, the Regulations here also provide for the formation of a committee of creditors with only operation creditors in case where the corporate debtor has no financial debt or where all financial creditors are related parties to the corporate debtor..(Read the Regulations)
