TMI BlogRECOMMENDATION OF INSOLVENCY PROFESSIONAL BY THE INSOLVENCY AND BANKRUPTCY BOARD TO THE ADJUDICATING AUTHORITYX X X X Extracts X X X X X X X X Extracts X X X X ..... RECOMMENDATION OF INSOLVENCY PROFESSIONAL BY THE INSOLVENCY AND BANKRUPTCY BOARD TO THE ADJUDICATING AUTHORITY - By: - Mr. M. GOVINDARAJAN - Corporate Laws / IBC / SEBI - Dated:- 6-10-2017 - - Introduction The insolvency resolution process is mainly undertaken by the insolvency resolution professional. The insolvency resolution professional may act- Interim resolution professional; Resolution professional in Corporate insolvency resolution process as well as fast track corporate insolvency process. He may also act as an liquidator in the voluntary liquidation process and liquidation process on the order of the Adjudicating Authority. While initiating the corporate insolvency resolution process the applicant itself is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to propose the name of the interim resolution professional or resolution profession to the Adjudicating Authority. The Adjudicating Authority shall appoint him if there is no disciplinary proceedings is against him and also he has given consent to act as resolution professional. If the applicant does not propose any person as insolvency professional, then the Adjudicating Authority shall direct the Insolvency and Bankruptcy Board to recommend the name of a person who is in the panel maintained by the Board. On recommendation of the Board, the Adjudicating Authority shall appoint such person as resolution professional. Reference by Adjudicating Authority to the Board Section 16 of the Code provides the procedure for appointment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and tenure of interim resolution professional. The Adjudicating Authority shall appoint an interim resolution professional within 14 days from the insolvency commencement date. Where the application for corporate insolvency resolution process is made by an operational creditor and no proposal for an interim resolution professional is made, the Adjudicating Authority shall make a reference to the Board for the recommendation of an insolvency resolution professional who may act as an interim resolution professional. The Board shall, within 10 days of the receipt of a reference from the Adjudicating Authority, recommend the name of an insolvency resolution professional to the Adjudicating Authority against whom no disciplinary proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is pending. Guidelines A guideline has been issued enabling the board to select a person and recommend to the Adjudicating Authority for the appointment of the interim resolution professional. The following are the methods involved in selection of a person for this purpose- Identification of Insolvency Professional An insolvency professional may be recommended to act as an Insolvency Resolution Professional, if- there is no disciplinary proceeding pending against him; he has not been convicted at any time in the last three years by a court of competent jurisdiction; he is eligible to act as Interim Resolution Professional under regulation 3 of the IBBI (Insolvency Resolution Process for Corporate Persons) Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulations, 2016 or applicable regulations; he is located in the vicinity of registered office of the corporate debtor; and he express his interest to act as Interim Resolution professional in response to invitation of interest by the Board. Determination of vicinity The insolvency professional is to be located, as per his address registered with the Board, in one of the vicinities for the regions as detailed below- Vicinity for Metro Region Chennai, Delhi, Kolkata and Mumbai; Vicinity for Northern Region Punjab, Himachal Pradesh, Haryana, Chandirgarh and Jammu Kashmir, Rajasthan, Uttar Pradesh and Uttarakhand; Vicinity for Western Region Gujarat, Daman Diu and Dadar Nagar Haweli, Madhya Pradesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Chandigarh; Vicinity for Eastern Region Andaman Nicobar, Bihar, Jharkhand, Odisha, West Bench, Arunachal Pradesh, Assam, Manipur, Meghalaya, Nagaland, Tripura and Sikkim; Vicinity for Southern Region Andhra Pradesh, Telengana, Karnataka, Kerala, Lakshadweep, Tamil Nadu (excluding Chennai) and Puducherry. Procedure by Board On receipt of a reference from the Adjudicating Authority the Board shall invite expression of interest by sending e-mail to insolvency professionals, who are located in the vicinity of registered office of the corporate debtor; The expression of interest must be received by the Board in Form A within 24 hours of invitation of expression of Interest; Expression of interest T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expression of interest is to be given in Form A. The following information is to be furnished in the said form- Name of the Insolvency Professional; Registration number; Address and contact details, as registered with the Board such as e-mail id, mobile number and address; Number of ongoing assignments in hand- As interim resolutionprofessional of Corporate Insolvency resolution process; As resolution professional of Corporate insolvency resolution process; As interim resolution professional of Fast Track; As resolution professional of Fast Track; Liquidation/Voluntary Liquidation; Individual insolvency; Bankruptcy trustee. Whether he has been convicted at any time in the last three years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a court of competent jurisdiction? (Give details); Whether any disciplinary proceeding is pending against him? (details to be given); Whether he fulfills the eligibility criteria under Regulation 3 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 or applicable regulations in respect of corporate debtor? Whether he is located, as per his address registered with the Board, in the vicinity of the corporate debtor? Fees (All inclusive fees excluding out of pocket expenses required by him) If the declarations turns out to be incorrect at any time, he shall attract disciplinary proceeding under the Code. Preparation of list of eligible persons The Board shall prepare a list of eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le insolvency professionals. The name of an insolvency professional will be included in the list only if he- has expressed his interest; is located in the vicinity of the corporate debtor, as per his address registered with the Board; has not been convicted at any time during the last three years; does not have any disciplinary proceedings pending against him; and is eligible under regulation 3 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations,2016 or applicable regulations, as per his declaration. Selection of insolvency professional The Board shall recommend the name of an insolvency professional ( IP for short) on the basis of the following two criteria- He does not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... too many ongoing arrangements under the code; and He has quoted a lower fee.The Board shall keep the fee quoted by him. The insolvency professional who gets the highest score will be recommended by the Board. The Score is calculated by the formula X = W 1 V + W 2 F, Where- W 1 = 0.5, weight for volume of ongoing assignments the IP has under the code; V = relative volume of ongoing assignments the IP has under the Code; W 2 = 0.5 weight for fee quoted by the IP; and F = relative amount of fee quoted by the iP. The IP who has the lowest volume of ongoing assignments will get a score of 100. The IP who has the highest volume of ongoing assignments will be a score of 0 . The difference between the highest vol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ume and the lowest volume will be equated to 100 and other IPs will get scores between 0 and 100 . The sum of the values of each ongoing assignment is the volume for an IP. An ongoing assignment shall be valued as under- IRP of a Corporate Insolvency Resolution process = 5; RP of a Corporate Insolvency Resolution process = 10; IRP of a Fast track process = 3; RP of a Fast track process = 6; Liquidation/Voluntary liquidation = 5; Individual insolvency = 1; Bankruptcy Trustee = 1. Fee quoted The IP who quoted the highest fee will get a score of 0 . The IP who quotes the lowest fee will get a score of 100 . The difference between the lowest fee and the highest fee will be normalized to 100 and ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her IPs will get scores between 0 and 100 depending on the fee they have quoted. Selection The above process is undertaken by a team of officers of the Board. The IP getting the highest score will be recommended by the Board. If two IPs get the same score of X, the name of the IP will be decided by draw of lottery. The recommendation of an IP will be made with the approval of an executive director of the Board to the Adjudicating Authority. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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