Section 17-Management of affairs of corporate debtor by interim resolution professional. | Companies Act Integrated Ready Reckoner|Companies Act 2013|CAIRR

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IBC Section 17-Management of affairs of corporate debtor by interim resolution professional.

Effective from 01.12.2016

(1) From the date of appointment of the interim resolution professional,—

(a) the management of the affairs of the corporate debtor shall vest in the interim resolution professional;

(b) the powers of the board of directors or the partners of the corporate debtor, as the case may be, shall stand suspended and be exercised by the interim resolution professional;

(c) the officers and managers of the corporate debtor shall report to the interim resolution professional and provide access to such documents and records of the corporate debtor as may be required by the interim resolution professional;

(d) the financial institutions maintaining accounts of the corporate debtor shall act on the instructions of the interim resolution professional in relation to such accounts and furnish all information relating to the corporate debtor available with them to the interim resolution professional.

(2) The interim resolution professional vested with the management of the corporate debtor shall—

(a) act and execute in the name and on behalf of the corporate debtor all deeds, receipts, and other documents, if any;

(b) take such actions, in the manner and subject to such restrictions, as may be specified by the Board;

(c) have the authority to access the electronic records of corporate debtor from information utility having financial information of the corporate debtor;

(d) have the authority to access the books of account, records and other relevant documents of corporate debtor available with government authorities, statutory auditors, accountants and such other persons as ~~may be specified.~~ may be specified; and

(e) be responsible for complying with the requirements under any lawfor the time being in force on behalf of the corporate debtor.

2.4.4:Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

4. Access to books.

(1) Without prejudice to section 17(2)(d), the interim resolution professional or the resolution professional, as the case may be, ~~interim resolution professional~~ may access the books of account, records and other relevant documents and information, to the extent relevant for discharging his duties under the Code, of the corporate debtor held with-

(a) depositories of securities;

(b) professional advisors of the corporate debtor;

(d) other registries that records the ownership of assets;

(e) members, promoters, partners, board of directors and joint venture partners of the corporate debtor; and

(f) contractual counterparties of the corporate debtor.

(2)The personnel of the corporate debtor, its promoters or any other person associated with the management of the corporate debtor shall provide the information within such Page 2 of 3 time and in such format as sought by the interim resolution professional or the resolution professional, as the case may be.
(3)The creditor shall provide to the interim resolution professional or resolution professional, as the case may be, the information in respect of assets and liabilities of the corporate debtor from the last valuation report, stock statement, receivables statement, inspection reports of properties, audit report, stock audit report, title search report, technical officers report, bank account statement and such other information which shall assist the interim resolution professional or the resolution professional in preparing the information memorandum, getting valuation determined and in conducting the corporate insolvency resolution process.

(3) The interim resolution professional or resolution professional, as the case may be, may seek from any creditor including financial institutions and statutory authorities, such information or records as he may deem fit, including the relevant extracts of information in respect of assets and liabilities of the corporate debtor from the last valuation report, stock statement, receivables statement, inspection reports of properties, audit report, stock audit report, title search report, technical officers report, bank account statement and any such other information which shall assist the interim resolution professional or the resolution professional in preparing the information memorandum, getting valuation determined and in conducting the corporate insolvency resolution process and the creditors shall provide the requisite information:

Provided that every creditor shall, at the first meeting of the committee, furnish to the interim resolution professional or resolution professional, as the case may be, all information and records in its possession relating to the assets and liabilities of the corporate debtor, as may be relevant for the conduct of the corporate insolvency resolution process.

4A. Choice of authorised representative

(1) On an examination of books of account and other relevant records of the corporate debtor, the interim resolution professional shall ascertain class(s) of creditors, if any.

(2) For representation of creditors in a class ascertained under sub-regulation (1) in the committee, the interim resolution professional shall identify three insolvency professionals who are-

(a) not his relatives or related parties;

(aa) having their addresses, as registered with the Board, in the State or Union Territory, as the case may be, which has the highest number of creditors in the class as per their addresses in the records of the corporate debtor:

Provided that where such State or Union Territory does not have adequate number of insolvency professionals, the insolvency professionals having addresses in a nearby State or Union Territory, as the case may be, shall be considered;

(b) eligible to be “resolution professional ~~insolvency professionals~~ under regulation 3; and

(3) The interim resolution professional shall obtain the consent of each insolvency professional identified under sub-regulation (2) to act as the authorised representative of creditors in the class in ~~Form AB of the ~~Schedule~~ Schedule I~~ such form as notified by the Board through circular

4B. Disclosure of change in name and address of corporate debtor.

Where a corporate debtor has changed its name or registered office address during the period of two years preceding the insolvency commencement date, the interim resolution professional or resolution professional, as the case may be, shall disclose all the former name(s) and registered office address(es) so changed along with the current name and registered office address in every communication, record, proceeding or any other document.

4C. Process e-mail.
(1) The interim resolution professional shall open an email account and use it for all correspondences with stakeholders and in the event of his replacement by a resolution professional, shall handover the credentials of the email to him.

(2) The resolution professional shall, in case of his replacement with another resolution professional or a liquidator, hand over the credentials of the email to the other resolution professional or the liquidator, as the case may be.

~~4D. Operating separate bank account for each real estate project.~~

Where the corporate debtor has any real estate project, the interim resolution professional or the resolution professional, as the case may be, shall operate a separate bank account for each real estate project.
4D. Project wise records and fund utilisation
(1) Where a corporate debtor has any real estate project, the interim resolution professional or the resolution professional, the case may be, shall operate a separate bank account for each real estate project.
(2) The interim resolution professional or the resolution professional, the case may be, shall place before the committee, at such intervals may be considered appropriate by the committee, a project-wise statement of receipts and payments, and such other financial information relating to such real estate project may be required by the committee.
(3) The interim resolution professional or the resolution professional, as the case may be, shall ensure that, in respect of every real estate project of the corporate debtor, the fund utilisation requirements provided under the Real Estate (Regulation and Development) Act, 2016 are complied with during the corporate insolvency resolution process.
4E. Handing over the possession.
After obtaining the approval of the committee with not less than sixty-six percent of total votes, the resolution professional shall hand over the possession of the plot, apartment, or building or any instruments agreed to be transferred under the real estate project and facilitate registration, where the allottee has requested for the same and has performed his part under the agreement.

Explanation- For the purposes of this regulation, the committee may either decide to grant approval in respect of each request made by an individual allottee, to the resolution professional, or grant an in-principle approval, authorising the resolution professional to process all such requests and when they are received during the corporate insolvency resolution process.
4F. Identification and exclusion of real estate projects.
(1) Where the corporate debtor has more than one real estate project, the resolution professional shall place in the first meeting of the committee, following project-wise details of all real estate projects of the corporate debtor-
(a) RERA registration details;
(b) stage of completion;
(c) status of possession and occupancy;
(d) number of completed and incomplete units; and
(e) such other information as considered necessary for assessment of such real estate project.

(2) The committee may, after considering the information placed before it under sub regulation (1), by a vote of not less than sixty-six per cent of voting share, recommend to the Adjudicating Authority along with the reasons to be recorded, for its consideration, the exclusion from the corporate insolvency resolution process of any real estate project.

(3) Pursuant to approval of the committee under sub-regulation (2), the resolution professional shall make an application along with the reasons recorded by the committee before the Adjudicating Authority.
4G. Technical and cost-to-complete assessment of real estate projects.
(1) Where a corporate debtor has any real estate project, the resolution professional shall, with the prior approval of committee, appoint one or more suitably qualified and independent professionals, in accordance with sub-regulation (3) of regulation 27, to undertake a project-wise technical and cost-to-complete assessment of such project.

(2) The assessment referred to in sub-regulation (1) shall, to the extent applicable, include- physical status of construction and percentage of completion of the project;

(a) physical status of construction and percentage of completion of the project;
(b) status of approvals, registrations, permissions and regulatory compliances relating to the project;
(c) details of inventory, including sold and unsold units;
(d) estimated cost required for completion of the project and its phases;
(e) milestone-wise funding requirements;
(f) realistic timelines for completion and delivery of the project;
(g) material risks and constraints affecting completion of the project; and
(h) such other information as considered necessary.

(3) The resolution professional shall obtain the assessment referred to in sub-regulation (1) before issuance of the invitation for expression of interest under regulation 36A.

(4) The assessment shall be incorporated in the information memorandum and made available to prospective resolution applicants.

(5) The costs incurred for conducting the assessment under this regulation shall form part of the insolvency resolution process costs.

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