IBBI asks resolution professionals to upload judicial orders quickly

New Delhi: The Insolvency and Bankruptcy Board of India (IBBI) has asked debt resolution professionals to upload orders from tribunals and courts quickly on a portal designated by the regulator, as judicial rulings have an impact on the ongoing bankruptcy cases.

This, the insolvency regulator said, would ensure that important judicial orders that can have a significant impact on the ongoing proceedings under the Insolvency and Bankruptcy Code (IBC) are available for stakeholders in a timely manner.

The regulator said that orders like admission of bankruptcy petitions, approval of corporate rescue plans and liquidation orders issued by tribunals and decisions by high courts and the Supreme Court involving the government, the regulator or interpretation of law have to be quickly disseminated.

Also, court orders relating to the extent of the authority of a law or code and applicability of the bankruptcy code, rules and regulations have to uploaded by the professionals, who have first-hand access to them.

The idea is to improve efficiency in information sharing with the parties in the bankruptcy ecosystem to achieve better outcomes from debt resolution. 

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The move comes at a time the government is preparing to put in place a technology platform that would connect all players in the distressed assets market, including lenders, administrators of bankrupt firms, tribunals and courts, the regulator and the ministry of corporate affairs. The government is keen to ensure a free flow of information so that informed decisions are made at various levels, as timely access to information has a bearing on the value of assets and is critical for making investment decisions.

IBBI said that resolution professionals also have to upload tribunal orders on closure or withdrawal of bankruptcy proceedings as well as settlements, stay orders and the final orders on preferential, undervalued, fraudulent and extortionate credit transactions and fraudulent and wrongful trading. Professionals also have to upload any other tribunal order having an actionable point for the regulator.

Insolvency resolution professionals have been directed to upload only the orders published at the official websites of the respective forum, explained Yogendra Aldak, partner at Lakshmikumaran & Sridharan Attorneys.

“This step will ensure that stakeholders are not restricted from accessing orders which may have a significant impact on the ongoing resolution process due to their inability to navigate the unfamiliar portals or websites of these forums which are otherwise designed to be used by individuals with a legal background. This step of the IBBI is surely going to make the process more accessible for all stakeholders and ensure greater transparency,” said Aldak.

Improving the outcome of bankruptcy proceedings—salvaging as many sick companies as possible in the shortest time has been a priority for the government. IBBI has been constantly refining the procedures, including the bidding process of stressed assets, in order to save time and costs for the parties involved. The number of resolution plans approved in FY24 had crossed 250 by February-end on account of rule changes and filling up of vacancies in tribunals, Mint had reported on 27 March.