Application to Adjudicating Authority Rules for Insolvency Resolution of Corporate Persons, 2016
Enabling the initiation of the insolvency resolution process under the Insolvency and Bankruptcy Code
The Insolvency and Bankruptcy Code, 2016 (Code) provides a consolidated legal framework for resolving insolvency of corporate debtors. A corporate insolvency resolution process (CIRP) can be initiated under the Code against a corporate debtor at any time if it defaults in repaying its debt obligations. The Code permits a financial creditor or an operational creditor to file an application to initiate CIRP against a corporate debtor which has defaulted on its debts. As the Code recognises the National Company Law Tribunal (NCLT) as the Adjudicating Authority having exclusive jurisdiction over matters related to insolvency resolution and liquidation of corporate debtors, such application needs to be filed before the NCLT. However, where an operational creditor wishes to initiate CIRP, she is required to file a demand notice with the corporate debtor in respect of the default before filing an application with the NCLT. Additionally, a corporate debtor is also permitted to initiate a CIRP on its own .
The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, were drafted to lay down the detailed procedure of filing an application for initiating the CIRP against a corporate debtor. These Rules also specify the requisite forms for filing such an application and the manner of filing a demand notice with the corporate debtor.
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About the Contributors
Debanshu is one of Vidhi’s Co-Founders. He has over a decade of experience in commercial laws and the financial sector and has advised the Government of India on several legislative projects in this space. He was instrumental in advising the Government on the design and drafting of the Insolvency and Bankruptcy Code and its subsequent implementation. He has developed and curated Vidhi’s work on insolvency law, corporate law, financial regulation, and competition law and conceptualized its Bankruptcy Research Program. He has served as a member of a Government-appointed committee for operationalizing the National Company Law Tribunal and deposed before two Parliamentary committees examining financial sector legislation. He has also worked as a teaching fellow at Harvard Law School. He is an alumnus of the Harvard Law School, the University of Oxford, and Hidayatullah National Law University. He attended Harvard as a Fulbright Scholar and was awarded the Irving Oberman Memorial Prize in Bankruptcy and the Dean’s scholar prize in Corporations. He was also awarded a Distinction for his graduate studies at Oxford. In 2017, he was selected for NYU School of Law’s Hauser Global Scholarship, which he waived. His academic work has been published in peer-reviewed journals and an edited book published by Cambridge University Press, New York. He has been consulted by and mentioned in global business publications, such as IFR Asia and The Economist. Earlier, Debanshu practiced as an M&A and regulatory lawyer with AZB & Partners at its Mumbai and New Delhi offices.
Shreya was a Research Fellow at Vidhi.
