Maintaining Records and Reporting to the NCLT under IBC

Insolvency and Bankruptcy Code (IBC) mandates rigorous record-keeping and transparent reporting to the National Company Law Tribunal (NCLT). This ensures accountability, facilitates informed decision-making by the Committee of Creditors (CoC), and upholds the integrity of the resolution process. The Resolution Professional (RP) plays a pivotal role in this aspect, acting as the custodian of information and the primary conduit to the NCLT.

Key Records to Maintain

The RP is responsible for maintaining a comprehensive set of records pertaining to the Corporate Insolvency Resolution Process (CIRP). These records form the backbone of the entire process and are crucial for audits, legal scrutiny, and stakeholder information. Key categories include:

Financial Records: All financial transactions, receipts, payments, bank statements, and financial statements of the corporate debtor.
Operational Records: Details of the corporate debtor's business operations, contracts, agreements, inventory, and asset registers.
Legal Records: All legal documents, court orders, notices, correspondence with legal counsel, and details of ongoing litigation.
CIRP Process Records: Minutes of meetings of the CoC and other stakeholders, resolutions passed, reports submitted to the NCLT, and correspondence related to the resolution plan.
Asset Records: Detailed inventory of all movable and immovable assets, including their valuation reports and encumbrances.

Reporting Obligations to the NCLT

Regular and timely reporting to the NCLT is a statutory requirement under the IBC. These reports provide the Tribunal with an overview of the CIRP's progress, any challenges encountered, and proposed actions. Key reports include:

The NCLT acts as the supervisory authority. Accurate and transparent reporting by the RP is crucial for the NCLT to effectively oversee the CIRP and ensure fairness to all stakeholders.

Role of the Committee of Creditors (CoC)

While the RP is responsible for the day-to-day management and reporting, the CoC plays a critical oversight role. The CoC reviews the reports submitted by the RP, discusses the progress of the CIRP, and makes informed decisions regarding the resolution plan. Transparency in reporting by the RP is vital for the CoC to effectively discharge its duties.

Consequences of Non-Compliance

Failure to maintain proper records or submit timely reports to the NCLT can have serious consequences. The RP may face penalties, including fines and disqualification from acting as an RP in future cases. Inaccurate or misleading information can also lead to the rejection of resolution plans or orders for liquidation, impacting the recovery prospects for creditors.

Key Takeaways

What is the primary responsibility of the Resolution Professional regarding records?

To maintain comprehensive financial, operational, legal, CIRP process, and asset records of the corporate debtor.

Name two types of reports the RP must submit to the NCLT.

Progress Reports and Applications/Petitions.

What is the role of the CoC in relation to RP's reporting?

To review and discuss the RP's reports and make informed decisions regarding the resolution plan.

Learning Resources

Insolvency and Bankruptcy Code, 2016(documentation)

The official text of the Insolvency and Bankruptcy Code, 2016, which outlines all legal provisions, including reporting and record-keeping requirements.

Insolvency and Bankruptcy Board of India (IBBI) Website(documentation)

The official website of IBBI, providing regulations, circulars, and guidance notes relevant to the IBC, including those on record maintenance and reporting.

NCLT Rules and Procedures(documentation)

Official rules and regulations governing the National Company Law Tribunal (NCLT), detailing procedural aspects of filings and reporting.

Understanding the Role of the Resolution Professional(video)

A video explaining the multifaceted role of a Resolution Professional under the IBC, including their duties in managing records and reporting.

Key Amendments to IBC and their Impact(blog)

A blog post discussing significant amendments to the IBC, which often impact reporting requirements and record-keeping standards.

Committee of Creditors under IBC: Powers and Duties(blog)

An article detailing the powers and duties of the Committee of Creditors, highlighting their reliance on accurate reporting from the RP.

Reporting Obligations of Insolvency Professionals(documentation)

The IBBI (Insolvency Professionals) Code of Conduct and Ethics Regulations, 2016, which explicitly outlines reporting duties and professional conduct.

NCLT Practice Manual(documentation)

A comprehensive practice manual for the NCLT, offering guidance on various procedural aspects, including filing requirements and documentation.

Case Law Analysis: NCLT Reporting(blog)

An analysis of relevant case law concerning NCLT reporting obligations and the consequences of non-compliance, providing practical insights.

The Insolvency and Bankruptcy Code, 2016: A Comprehensive Guide(documentation)

A detailed guide published by the Institute of Chartered Accountants of India (ICAI) covering various aspects of the IBC, including record-keeping and reporting.