Insolvency & Bankruptcy code 2016

1. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Sai Meera
Insolvency & Bankruptcy
Code 2016

2. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Insolvency & Bankruptcy Code 2016
• “Biggest Economic Reform in India after the GST”
• Insolvency -inability of debtors, individuals or corporates to repay
their debts.
• Bankruptcy happens when debtors, individuals or corporates are
declared incapable of repaying their debt.
• Bankruptcy is just a formal declaration of insolvency.
Introduction:
The bill was passed by Lower house of India’s parliament i.e. Lok
Sabha on 5th May 2016 and received the assent of Indian president
on 28th May 2016.
biggest economic reform in India after the GST.
consolidated all the laws related to insolvency in India by creating a
single law.

3. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Although it is undergoing an initial period of adjustment and cleaning
up, the law lays down a robust framework and time-bound road map
to deal with distressed or failed businesses, a welcome contrast from
the earlier, seemingly never-ending process
Background:
Pending bankruptcy cases: nearly 60,000 bankruptcy cases are pending in Indian courts.
It takes about 4.3 years for a company to shut down its operations in India.
This Code, should reduce the time to 1 year.
Significance: “India ranks 130th in Ease of doing business and 40th in global competitive
index. Both ease of doing business and global competitive index ranking criteria have one
parameter in common i.e. resolving insolvency”.
Objective: Improve ease of doing business
Consolidate all laws to bring in a single law to deal with it.

4. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
The Problem for which this code is a solution:
NPS- Non Performing Asset
NPA “any asset which hasn't performed for over a period of time or in
an asset on which bank hasn’t received any principal or interest over a
period of time, usually 90 days.”
Agriculture/ Farm loan, NPA is defined as non-repayment of loans till 2
crop seasons for short duration crop and for long duration crops, the
repayment period stands for 1 crop cycle.
Estimate:
• 13% of all commercial loans which totals 8-10 lakh crore in India are
NPAs.
• NPA ratio = Net non-performing assets / Loans given
• IDBI, IOB have highest NPA ratio
• SBI- highest amount of NPAs

5. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Understanding the Challenges:
• Banks and lending agencies: source of income is interest paid on
the loans
• NPA is a loan or credit that has not yielded an interest for a period
of 90 days.
• i.e. banks income has dipped.
• NPAs suck the liquidity out of the market that means less cash
flow.
• Companies will react to this by stagnating credit policies i.e. some
companies will not be able to take loans.
• Principal used to finance loans – depositors money
• Small banks run of low capital infusion and liquidity—NPA has
ripple effect
• More NPA- less liquidity- less cash inflow.

6. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Further Complexity is the framework of
the past
• Various laws - Sick Industrial Companies Act, The Provincial
Insolvency Act, Companies Act, and Recovery of debts due to
banks and financial Institutions Act etc.,
• Overlapped jurisdiction - High Court, NCLT (National Company Law
Tribunal), Debt Recovery Tribunal slowed down the debt recovery
process.

7. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Salient features of the bill
• Covers companies, individuals, partnership firms, Limited Liability
partnership firms.
• Aims to build a new class of insolvency professionals (IPs) that
would help sick companies.
• Advocates the creation of information utilities (IUs) that will
collate all the information about the debtors.
• setting up of Insolvency and bankruptcy board that will regulate
both IPs and IUs.
• National Company Law Tribunal (NCLT) will act as the negotiating
authority and deal will cases with insolvency, bankruptcy process
and liquidation of companies .
• Debt Recovery Tribunal (DRT) will act as a negotiating authority
for individuals.
• The insolvency proceeding will be initiated by NCLT/DRT after
verifying the claims of the initiator.

8. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
The Process
Who can initiate the insolvency proceedings ?
Proceedings can be initiated upon default of more than Rs 1 lakh (based
on payment default).
stakeholder: debtor, employee
The insolvency proceeding will be initiated by NCLT/DRT after verifying
the claims of the initiator.
NCLT/DRT will then appoint an Interim resolution professional (IRP) as
proposed by the lender who has initiated the proceedings.
IRP will then take over the reins of the company as the board of
directors stand suspended. IRP can appoint professionals, accountants
or legal experts to assist him in running the company.
The IRP will verify the claims of all creditors, get cash flow in control, and
call meeting of Committee of Creditors (CoC) on the 30th day of being
appointed as the IRP.

9. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
The IRP will verify the claims of all creditors, get cash flow in control, and
call meeting of Committee of Creditors (CoC) on the 30th day of being
appointed as the IRP.
On the first meeting, the CoC will decide whether to continue with the
same IRP or appoint a new RP (Resolution professional) by 75% majority
vote. If the company decides to retain the IRP then he/she would be
addressed as RP.
The RP will look into the commercial part of the proceedings, develop code of
ethics, professional standards while Information utilities (IUs) will collect, verify,
collate the financial information to be used in the proceedings.
The RP will then assist the CoC in preparing a restructuring process that could
either be liquidation of assets of the company or a revised payment plan.

10. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
• For companies, the restricting process has to be prepared and
approved within 180 days and a one-time extension of 90 days if
the case is complex and for start-ups, small companies the
resolution process has to finish by 90 days and could be extended
by 45 days.
• However, if the resolution plan didn’t have the approval of 75% of
CoC even after the extended 270 days (180 + 90 extended days) or
the resolution plan is rejected by NCLT or DRT on technical grounds,
then assets of corporate debtors are put in the liquidation process.

11. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
FRAME WORK
• One-stop shop
• Genuine business failures get a second chance.
control shifts from shareholders/promoters to a committee of
• creditors

12. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
CASES
Tata Steel
Essar Steel
Binani Cement
Jaypee associates

13. CHENNAI
III Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 24984821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 65462400
COIMBATORE
#1533, Trichy Road,
Coimbatore – 641018.
Tel: +91 - 422 - 6552921
HYDERABAD
Flat No. A-701,
Brindavan Apartments,
Niloufer Hospital Road,
Redhills, Hyderabad - 500034.
Tel: +91 - 40 - 60506009
COCHIN
Suite 49, 8th Floor, Centre A,
Alapatt Heritage Building,
MG Road, Cochin – 682035
Tel: +91 - 484 - 6506216
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
THANK YOU