APPLICATION AND ENTITLEMENT FOR PIRP
MINIMUM AMOUNT OF DEFAULT
Section 4 of the IBC provides for Application of Part II of the IBC. Section 4 states that the minimum amount of default is Rs. 1 Lac whereby the Central Government, by Notification, may specify a minimum amount more than Rs. 1 Lac but the same shall not exceed Rs. 1 Crore. A Proviso to Section 4 has been inserted wherein the minimum amount of default as notified by the Central Government is Rs. 10 Lacs for the matters with respect to PIRP of the CD under Chapter III-A.
DISPOSAL OF APPLICATIONS
The Ordinance has provided for the insertion of Section 11A after Section 11 of the IBC that deals with the disposal of Applications under Sections 7, 9, 10 and the newly inserted Section 54C.
A pending Application for initiation of PIRP has to be decided prior to considering any Application under Section 7, 9 or 10 of the IBC.
An Application for initiation of a PIRP shall be decided upon before deciding upon an Application pending for initiation of a CIRP under Section 7, 9 or 10 of the IBC when the latter have been pending for 14 days.
If an Application is not made within 14 days on pendency of Applications under Sections 7, 9 or 10, then the Applications under the aforementioned Section 7, 9 or 10 have to be decided upon first.
Section 11A is not applicable to Applications under Section 7, 9 or 10 already pending on the date of promulgation of the Ordinance.
PERSONS NOT ENTITLED TO MAKE APPLICATION
Section 11 of the IBC excludes entitlement of certain persons from making an Application for initiation of CIRP.
The words ‘PIRP period’, ‘as the case may be, etc.’ have been inserted in Clause (a) of Section 11.
Clause (aa) is inserted that excludes FC or Operational Creditor (“OC”) of a CD undergoing PIRP from filing an Application against the CD.
Clause (ba) is inserted that excludes a CD in respect of whom a Resolution Plan has been approved under Chapter III-A in the twelve months preceding the date of making of the Application.
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