Frequently Asked Questions onThe Insolvency and Bankruptcy Code, 2016

Frequently Asked Questions on
The Insolvency and Bankruptcy Code, 2016

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The insolvency space is extremely fertile, especially in a growing market
economy, like India. It acquires richness, depth and maturity with every
transaction. The insolvency regime in India is no exception. The Insolvency
and Bankruptcy Code, 2016 (Code) has witnessed six legislative
interventions since its enactment, to strengthen the processes and further its
objectives, in sync with the emerging market realities. There have also been
dozens of amendments to the regulatory framework to smoothen the
implementation of various processes under the Code. The Adjudicating
Authority, the Appellate Authority, High Courts, and the Supreme Court have
all delivered numerous landmark orders and judgments explaining several
conceptual issues, settling contentious issues and resolving grey areas. The
insolvency as a discipline of knowledge is now well established in India.

A key pillar of the insolvency ecosystem is the regulator, namely, the
Insolvency and Bankruptcy Board of India (IBBI). The regulator is responsible
for professionalizing the insolvency services through regulation and
development of a comprehensive ecosystem of service providers, including,
insolvency professionals, insolvency professional agencies, information
utilities, registered valuers, and registered valuers’ organizations. It has been
the endeavor of IBBI to ensure that the service providers are fit-and-proper
persons, academically qualified and technically competent, and also have the
necessary motivation and drive to uphold the highest standards of ethics and
professionalism. In pursuance of this responsibility, the IBBI has been
undertaking several activities to build the capacity of service providers, and
monitoring their conduct and performance closely.

IBBI was set upon 1st October, 2016 with a mandate to commence the
corporate insolvency proceedings by 1st December,2016, and in just sixty
days, it had to create the entire ecosystem comprising Insolvency
Professionals Agencies (IPAs), Insolvency Professionals (IPs), regulations
for processes, and so on. IBBI could successfully deliver on this mandate
with the active support and cooperation of the Institute of Chartered
Accountants of India, which promoted IIIPI to join the insolvency ecosystem,
as the first IPA, in November, 2016. IIIPI has achieved a leadership position
in terms of membership and number of assignments handled by its members.
IIIPI, apart from being a wholly owned subsidiary of ICAI, is the largest IPA

The contribution of ICAI towards building the Indian economy and its steady
growth is well established and known to all. In successful implementation of
IBC, ICAI has played crucial role

I congratulate the IBC Committee of the Institute of Chartered Accountants of
India for engaging with IBBI for this joint initiative, in bringing out this revised
handbook on Frequently Asked Questions (FAQs) on the Insolvency and
Bankruptcy Code, 2016, appropriately supplemented with Case Laws. The
handbook is expected to provide useful guidance to the members of the
profession and other stakeholders for clear interpretation and understanding
of the insolvency law. The inclusion of section wise jurisprudence in this
revised edition will surely add to the utility of the publication

I compliment Mr. Nihar Jambusaria, President ICAI; Dr. Debashis Mitra, Vice
President, ICAI; CA. Durgesh Kabra, Chairman, Committee on IBC of ICAI;
and CA. Prakash Sharma, Vice Chairman, Committee on IBC of ICAI , Ms S.
Rita, Secretary, Committee on Insolvency and Bankruptcy Code and the
authors who supported ICAI in preparation of this Handbook. My
compliments to the team IBBI comprising Mr. Amit Pradhan, ED, Mr. Rajesh
Kumar Gupta, CGM and Mr. Raghav Maheshwari, AM for their support in
bringing out this publication.

I sincerely believe that the insolvency professionals, prospective insolvency
professionals and other stakeholders including researchers and students of
insolvency and bankruptcy would find this Handbook useful.