RP must maintain digital records for eight years, physical for three: IBBI

Board amends CIRP rules to empower resolution professionals to convene a meeting of committee of creditors regardless of whether or not they have made such a request

The Insolvency and Bankruptcy Board of India has amended Corporate Insolvency Resolution Process regulations to empower resolution professionals (RP) to convene a meeting of the committee of creditors (CoC) regardless of whether or not they have made a request for it.  The RP has also been mandated to preserve electronic copy of all records for a period of eight years and physical copy of records for a minimum period of three years from the date of completion of the corporate insolvency resolution process, by the IBBI.

The newly inserted regulation 18(3) allows the RP to put forward a proposal in the CoC either based on his own discretion or in the event the 33 per cent of the CoC voted in favour of putting forth the proposal. 

“It definitely gives more power to the RP and wider control. The  notification also removes any ambiguity and prescribes exact timelines and details,” Prashanth Shivadass, Partner, Shivadass & Shivadass said.

IBBI has also made it compulsory for the RP to preserve the records at a secure place and produce them as required under the IBC and the regulations. Experts said that earlier regulation 39A which mandated the preservation of records from the CIRP process was vague and did not go into specifics of what documents that were to be maintained or how long they were supposed to be maintained.

The newly substituted regulation 39A(2) however elaborates on a list of 14 documents which are required to be maintained by the RP from the CIRP. These include documents pertaining to the constitution of the committee of creditors, resolution professional cost among others. 

“Although the step towards preserving records is a positive one, it also burdens the shoulders of the RP to maintain records for historic data which would be voluminous. It would be interesting to see how the court interprets the above 2022 Regulations especially with respect to preservation of documents,” Nitish Sharma, Counsel, Anant Law said.