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IBBI amends rules, creditors may get Power to Remove Liquidator under IBC

Published on June 16, 2022
Current Context: The Insolvency and Bankruptcy Board of India (IBBI) has proposed a slew of changes to the liquidation regulations to firm out the discrepancies and make the liquidator more accountable under the Insolvency and Bankruptcy Code (IBC).
IBBI amends rules, creditors may get Power to Remove Liquidator under IBC
  • Under the proposed changes, a committee of creditors (CoC) may act as a stakeholders’ consultation committee (SCC), which is typically set up within 60 days from the date of commencement of the liquidation, to monitor the process from the beginning.
  • Besides It is also proposed that creditors can now replace the liquidator, by a majority vote, in case his conduct is not satisfactory.
  • The SCC works as a monitoring mechanism for liquidation, similar to the CoC in corporate insolvency.
  • This step has been taken because the need was felt to enhance the accountability of the liquidator, like in the case of the resolution professional.
  • Apart from that to empower the stakeholders during the liquidation process, the stakeholders’ consultation committee may, by a majority vote of not less than 66%, can propose the replacement of the liquidator and it shall apply to the adjudicating authority for the appointment of the proposed liquidator.
  • IBBI proposes the completion of the liquidation process in 30 days from the current 90 days in select cases.

Question:

Q.1 According to the proposed amendments to the liquidation regulations IBBI has reduced the completion of liquidation from 90 days to _______ days in special cases?
a. 45 Days
b. 50 Days
c. 60 Days
d. 30 Days
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