The Code has happened in stages from 5-8-2016 to 15-12-2016. A few arrangements are yet to become effective. The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 have become effective from 1-12-2016.
(I) Presidency-Towns Insolvency Act, 1909 and Provincial Insolvency Act, 1920 are canceled – Section 243. (Segment 243 has not yet happened.)
(ii) By Section 4(b) of Sick Industrial Companies Act (Special Provisions) (SICA) Repeal Act, 2003 as changed by Section 252 of Insolvency and Bankruptcy Code, 2016 read with eighth Schedule thereto, informed w.e.f. 1-12-2016, any reference made or enquiry pending before the Board or before the investigative specialist under SICA might stand subsided. SICA is revoked on 25-11-2016 w.e.f. 1-12-2016 and subsequently Board for Industrial and Financial Reconstruction and Appellate Authority for Industrial and Financial Reconstruction are disintegrated. Reference might be made by organization to National Company Law Tribunal inside 180 days from beginning of IBC].
Procedure of chapter 11
The procedure of chapter 11 is as set out in Section 125, that is, arrangement of indebtedness proficient as the insolvency trustee. Confirmation of obligation and that by secured loan boss is to be done as per Sections 171 and 172, to be qualified for dissemination of profits (Section 177).
DRT should pass a liquidation arrange inside 14 days of accepting the affirmation or selection of the chapter 11 trustee (Section 126). Liquidation arrange should keep on being legitimate and have impact till the indebted person is released (Section 127).
The impact of insolvency request and complaints of bankrupt and further procedures are as set out in Sections 128 to 137. Limitations on bankrupt are as set out in Section 141 and preclusions of a bankrupt are as set out in Section 140.
The bequest of bankrupt incorporates all property having a place with or vested in the bankrupt at the chapter 11 beginning date and all that is set out in Section 155. All after-procured property by the bankrupt can be guaranteed by liquidation trustee (Section 159). All archives as gave in Section 156 might be conveyed to the chapter 11 trustee.
Any mien of property made by the indebted person amid the period between the date of documenting of the application for chapter 11 and liquidation beginning date might be void (Section 158).
The organization and dispersion of the bequest of the bankrupt by liquidation trustee with his capacities, obligations, rights and general forces are as set out in Sections 149 to 154.
The arrangements with respect to difficult property of bankrupt, disclaimer thereof and of leaseholds, challenge against renounced property, and underestimated exchanges are as set out from Sections 160 to 164.
Inclination exchanges or extortionate exchanges by a bankrupt with the partner amid the time of two years finishing on the date of use for insolvency and some other exchange giving inclination went into by the bankrupt amid the time of a half year finishing on the date of the application for chapter 11, causing the liquidation procedure to be activated may, on use of liquidation trustee be announced by DRT as void and such part might be pronounced as a major aspect of the home of the bankrupt (Sections 165 and 167). Such request under Sections 164 or Section 165 should be liable to rejections in Section 166.
Chapter 11 trustee may pronounce interval profits for appropriation among loan bosses whose obligations are demonstrated (Section 174).
Appropriation of property which can’t be sold should be possible by chapter 11 trustee with endorsement of board of trustees of loan bosses (Section 175).
On acknowledgment of the whole domain of the bankrupt last profit might be pronounced as given under Section 176.
Need of installment of obligations are as set out in Section 178.
In the event that bankrupt bites the dust, the liquidation procedures might proceed as though he was alive (Section 169) and his bequest should be directed as set out in Section 170.
On the expiry of one year from insolvency beginning date or inside seven days of endorsement of the board of loan bosses of the fruition of organization of the bequest of the bankrupt under Section 137, DRT might pass a release arrange under Section 138 on application by chapter 11 trustee and the impact thereof is as given under Section 139.
From the request of DRT, advance misleads Debts Recovery Appellate Tribunal. From the request of DRAT, offer deceives Supreme Court (Sections 181 and 182).
Arrangements of Sections 55 to 58, 121 to 187, 195, 227 to 229, 243, 245 and 249 of the IBC have yet not happened. No Regulations identifying with the indebtedness and liquidation of people and association firms are so far confined.
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