Amendments in IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2025: An In-Depth Overview

The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2025 introduced several noteworthy amendments. Some of the significant modifications are as follows:

1. Regulation 4E: Transfer of Possession: In a significant stride towards safeguarding homebuyers’ interests, Regulation 4E mandates that Resolution Professionals (RPs) must arrange for the transfer of possession of plots, apartments, or buildings to allottees. This transfer is contingent upon the approval of the Committee of Creditors (CoC) with a majority of at least 66% votes and the fulfillment of all contractual obligations by the allottees. Furthermore, RPs are tasked with facilitating the registration of these properties, ensuring that homebuyers receive their legal titles seamlessly.

 

2. Regulations 16C and 16D: Role of Facilitators: The introduction of Regulations 16C and 16D heralds a new era of enhanced communication and representation within the insolvency resolution process. When the number of creditors in a class exceeds 1,000, the CoC may direct the appointment of facilitators. These facilitators, appointed upon the request of at least 100 creditors in a sub-class, are limited to a maximum of five. Their fee, set at 20% of the authorized representative’s fee, is included in the insolvency resolution process costs. The CoC retains the authority to replace facilitators based on the majority recommendation of the sub-class, ensuring dynamic and responsive representation.

 

3. Regulation 16D: Responsibilities of Facilitators: Facilitators play a pivotal role in bridging communication gaps between the authorized representative and creditors of a sub-class. Their responsibilities include attending CoC meetings as observers, providing information and clarifications to creditors, and performing additional tasks assigned by the committee to enhance representation and communication. This regulation underscores the importance of clear and effective communication in the insolvency resolution process. Further, amendments to Regulation 31 ensure that the facilitator’s fee is systematically included in the Corporate Insolvency Resolution Process (CIRP) costs.

 

4. Regulation 18(4): Involvement of Regulatory Bodies: Regulation 18(4) introduces a collaborative approach by allowing the CoC to invite competent authorities under the Real Estate (Regulation and Development) Act, 2016 to attend CoC meetings. These authorities, although without voting rights, provide valuable inputs on matters associated with the development of real estate projects, fostering a more informed and holistic decision-making process.

 

5. Regulation 36A: Disclosure Requirements: Regulation 36A now requires the disclosure of a corporate debtor’s MSME registration information in the invitation for expression of interest. Additionally, the CoC has the discretion to ease eligibility criteria and refundable deposit conditions for associations or groups of allottees representing at least 10% or 100 creditors. This amendment aims to encourage broader participation and inclusivity in the insolvency resolution process.

 

6. Regulation 38: Monitoring Committee: Regulation 38 mandates the formation of a Monitoring Committee to oversee the operationalization of the approved resolution plan. This committee, comprising the RP, other insolvency professionals, CoC representatives, and the Resolution Applicant, ensures the effective implementation of the resolution plan.

 

These regulatory amendments collectively enhance transparency, communication, and accountability within the insolvency resolution process. Homebuyers gain stronger protections and clearer pathways to property ownership, while creditors benefit from improved representation and decision-making. The involvement of regulatory bodies and the establishment of monitoring committees ensure that resolution plans are effectively implemented, fostering trust and stability among all stakeholders involved.