5 March 2019: The government has allowed trustees, estate administrators, persons authorised by a company’s board of directors etc to initiate corporate insolvency resolution process (CIRP) against a corporate debtor before the NCLT, on behalf of financial creditors under the Insolvency and Bankruptcy Code (IBC), 2016.
In a notification, the ministry of corporate affairs (MCA) said “a guardian, an executor or administrator of an estate of a financial creditor, a trustee (including a debenture trustee) and a person duly authorised by board of directors of a company” may file an application for initiating CIRP against a corporate debtor before the adjudicating authority, on behalf of the financial creditor.
Analysts said the MCA notification helps clear the ambiguity regarding who can approach NCLT for CIRP.
Nangia Advisors (Andersen Global) director (Regulatory) Sumit Naib said, “It is important to note that this notification does not intend to amend any provision of the Act or the rules framed thereunder. Given the nature of the notification, it should be considered as a clarification issued by the ministry to address the ambiguity”.