MCA notifies the Insolvency and Bankruptcy (Application to Adjudicating Authority) (Amendment) Rules, 2020

The Ministry of Corporate Affairs (MCA) has notified on September 24, 2020, the new Insolvency and Bankruptcy (Application to Adjudicating Authority) (Amendment) Rules, 2020 and has published this notification in The Gazette of India.

The Central Government has exercised its power given by the Section 239 of Sub-Section (2) Clauses (c), (d), (e) and (f) of the Insolvency and Bankruptcy Code, 2016 for amending the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016 and this new rule would call as the Insolvency and Bankruptcy (Application to Adjudicating Authority) (Amendment) Rules, 2020. 

The notification issued by MCA states that in the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 the following sub-rule will get substituted-

1. In Rule 4, for sub-rule (3), “The applicant shall serve a copy of the application to the registered office of the corporate debtor and to the Board, by registered post or speed post or by hand or by electronic means, before filing with the Adjudicating Authority.”
2. In Rule 6, for sub-rule (2), “The applicant under sub-rule (1) shall serve a copy of the application to the registered office of the corporate debtor and to the Board, by registered post or speed post or by hand or by electronic means, before filing with the Adjudicating Authority.”
3. In Rule 7, for sub-rule (2), “The applicant under sub-rule (1) shall serve a copy of the application to the Board by registered post or speed post or by hand or by electronic means, before filing with the Adjudicating Authority.”

Also, the notification states that in FORM 1:- 

(a) after Part – V, for the words, ― “[Name of the financial creditor] has paid the requisite fee for this application through [state means of payment] on [date]”, the following shall be substituted with- “[Name of the financial creditor] has paid the requisite fee for this application through [state means of payment] on [date] and served a copy of this application by registered post/speed post/by hand/electronic means to the registered office of the corporate debtor and to the Board.”

(b) under the ‘Instructions‘, after ‘Annex IV’, the following shall be inserted, with – “Annex V Proofs of serving a copy of the application (a) to the corporate debtor, and (b) to the Board.”

And in FORM 2 the serial number (iii) the following will get substituted with “(iii) disclose that I am currently having the following assignments in hand:

The notification also has substituted the following words in FORM 5, after Part – V: – 

a) “[Name of the operational creditor] has paid the requisite fee for this application through [state means of payment] on [date]” with “[Name of the operational creditor] has paid the requisite fee for this application through [state means of payment] on [date] and a copy of this application has been served by registered post/speed post/by hand/electronic means to the registered office of the corporate debtor and to the Board.”

b) and in the ‘Instructions’ heading the following is substituted-

(I) for the portion beginning with “Annex III Copy of the relevant accounts” and ending with “operational debtor, if available.”, with the words, “Annex III Form 5A, if available, from the banks/financial institutions that maintains relevant accounts of the operational creditor.”

(II) And after “Annex VI”, the following words shall get inserted, namely: – “Annex VII Proofs of serving a copy of the application (a) to the corporate debtor, and (b) to the Board.”

And after Form 5, the new Form 5A would be inserted which is shown as follows-

“Form 5A

[Under section 9(3)(c) of the Code]

(To be issued on the letter head of the Bank / Financial Institution)

To whomsoever it may concern

Based on a request of ……….(name and address of person), having an account(s) bearing No…… at …. branch of bank/financial institution, it is certified that the following amounts have been credited in the last three years to this account on behalf of corporate debtor (name and address of the corporate debtor from whom the amount is supposed to be credited).

(Signature and Name of issuing authority)

Date:

Place:”

Lastly in Form 6, after Part III the following words will be substituted, “[Name of the corporate applicant] has paid the requisite fee for this application through [state means of payment] on [date]” with the words, “[Name of the corporate applicant] has paid the requisite fee for this application through [state means of payment] on [date] and a copy of this application has been served by registered post/speed post/by hand/electronic means to the Board.” And under the heading ‘Instructions’, after ‘Annex IX’ the following words will get inserted, “Annex X Proof that a copy of the application has been served to the Board.”

With Warm Regards,

CL Bureau.