(1) Notwithstanding anything contained in any other law for the time being in force, the resolution professional, during the corporate insolvency resolution process, shall not take any of the following actions without the prior approval of the namely:—
(a) raise any interim finance in excess of the amount as may be decided by the committee of creditors in their meeting;
(b) create any security interest over the assets of the corporate debtor;
(c) change the capital structure of the corporate debtor, including by way of issuance of additional securities, creating a new class of securities or buying back or redemption of issued securities in case the corporate debtor is a company;
(d) record any change in the ownership interest of the corporate debtor;
(e) give instructions to financial institutions maintaining accounts of the corporate debtor for a debit transaction from any such accounts in excess of the amount as may be decided by the committee of creditors in their meeting;
(g) amend any constitutional documents of the corporate debtor;
(h) delegate its authority to any other person;
(i) dispose of or permit the disposal of shares of any shareholder of the corporate debtor or their nominees to third parties;
(j) make any change in the management of the corporate debtor or its subsidiary;
(k) transfer rights or financial debts or operational debts under material contracts otherwise than in the ordinary course of business;
(l) make changes in the appointment or terms of contract of such personnel as specified by the committee of creditors; or
(m) make changes in the appointment or terms of contract of statutory auditors or internal auditors of the corporate debtor.
(2) The resolution professional shall convene a meeting of the committee of creditors and seek the vote of the creditors prior to taking any of the actions under sub-section (1).
(3) No action under sub-section (1) shall be approved by the committee of creditors unless approved by a vote of seventy five per cent. of the voting shares.
(4) Where any action under sub-section (1) is taken by the resolution professional without seeking the approval of the committee of creditors in the manner as required in this section, such action shall be void.
(5) The committee of creditors may report the actions of the resolution professional under sub-section (4) to the Board for taking necessary actions against him under this Code.
- The earlier circular dated 14.09.2018 is rescinded vide circular dated 23.05.2022. To view the circular,Click Here
- Refer IBBI clarification on Voting in the Committee of Creditors dated 14.09.2018. To view the circular,Click Here
IBC-Enforcement Notification [S.O.3594(E)] dated 30/11/2016
Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 dated 06.06.2018 [repealed by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 dated 17.08.2018 w.e.f., 06.06.2018]
MCA Notification regarding “interim finance” under 5(15) of IB Code, 2016 dated 18.03.2020
The Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 dated 17.08.2018 w.e.f., 06.06.2018
IBBI circular dated 23.05.2022 regarding review of the existing circulars.
IBBI Circular- Voting in the Committee of Creditors dated 14.09.2019