(1) A financial creditor, belonging to such class of financial institutions as may be notified by the Central Government, in respect of which a default is committed by a corporate debtor, may initiate the creditor-initiated insolvency resolution process for such corporate debtor by appointing a resolution professional in accordance with the provisions of this section, and subject to such conditions, as may be prescribed.

(2) The financial creditor seeking to initiate the creditor-initiated insolvency resolution process shall, before appointing the resolution professional,–

(a) obtain the approval of the financial creditors of the corporate debtor belonging to the class of financial institutions notified under sub-section (1), who represent not less than fifty-one per cent. in value of the debt due to such financial creditors, in such manner as may be specified;

(b) inform the corporate debtor of its intention to initiate the creditor-initiated insolvency resolution process and give it a period of at least thirty days to make any representation in such form and manner as may be specified; and

(c) after consideration of the representation received under clause (b), if any, where the financial creditor continues to pursue the initiation of the process, it shall obtain approval of the financial creditors of the corporate debtor belonging to such class as notified under sub-section (1), who represent not less than fifty-one per cent. in value of the debt due to such financial creditors, within a period of thirty days from the date of receipt of the representation, in such manner as may be specified:

Provided that where no approval is obtained under clause (c) within the stipulated period of thirty days, the financial creditor shall, if it seeks to initiate the creditor-initiated insolvency resolution process, obtain fresh approval under clause (a) and comply with the procedure under this sub-section.

Explanation.–For the purposes of this section, it is hereby clarified that where the corporate debtor does not make a representation within the period given by the financial creditor under clause (b), the financial creditor may, after the expiry of such period proceed to appoint the resolution professional in accordance with the provisions of sub section (3).

(3) Where the financial creditor, who seeks to initiate the creditor-initiated insolvency resolution process, meets the requirements under sub-sections (1) and (2), it may appoint an insolvency professional as the resolution professional, if no disciplinary proceedings are pending against him, immediately after fulfilling all the requirements under sub-section (2).

(4) Where the resolution professional is appointed under sub-section (3), he shall–

(a) make a public announcement of the initiation of the creditor-initiated insolvency resolution process; and

(b) communicate the same along with a report confirming whether the financial creditor meets the requirements under sections 58A and 58B, to the Adjudicating Authority and the Board, within such period and in such form and manner as may be specified, and the creditor-initiated insolvency resolution process shall be deemed to have commenced from the date of such public announcement.

(5) Notwithstanding anything contained in sections 7, 9, 10 and 54C, no application for initiation of the corporate insolvency resolution process or the pre-packaged insolvency resolution process in respect of the corporate debtor shall be filed or admitted during the creditor-initiated insolvency resolution process period.

Explanation.–For the purposes of this Chapter,–
(i) “creditor-initiated insolvency commencement date” means the date of the public announcement referred to in sub-section (4) of section 58B; and

(ii) “creditor-initiated insolvency resolution process period” means the period beginning from the creditor-initiated insolvency commencement date and ending on the date on which an order is passed under sub-section (1) of section 58H or under sub-section (1) of section 58-I or under section 58J read with section 31.