Page 31 - Banking Finance February 2023

ARTICLE

in the process, and the manner and purposes of On expiry of 90 days if no resolution plan is submitted
interaction between the RP and the resolution to the AA for approval.
applicant, along with corresponding timelines. It shall
On rejection of resolution plan by the AA.
include (a) the basis for evaluation; (b) the basis for
On approval by the AA of application filed by the RP for
considering a resolution plan significantly better than
termination of PPIRP, where the CoC approves
another resolution plan; (c) the tick size; and (d) the
termination with 66% of voting share.
manner of improving a resolution plan. It shall not
require any non-refundable deposit for submission of or On conversion into CIRP based on an application filed
along with resolution plan. by the RP, where the CoC approves so with 66% of voting
share, and the CD is eligible for CIRP. The RP of the
The resolution plans received in response to invitation
PPIRP is appointed as the IRP of the CIRP.
and complying with the requirements of the Code and
the Regulations shall be evaluated on the basis for
Note :
evaluation. The resolution plan which gets the highest
Also that on an order of termination in case either no
score shall be selected as Best Alternate Plan (BAP) for
resolution plan is approved by CoC or the resolution plan
competition with the BRP.
approved by the CoC does not result in change in
CoC may consider BRP for approval if no resolution plan
management, where the AA has vested the management
is received.
of the CD with the RP under section 54J.
CoC may consider the BAP for approval if it is
significantly better than the BRP. If it does not approve PENALTY Clause :
a significantly better BAP, the process terminates.
Since this entire process is based on the management of
If the BAP is not significantly better than the BRP, the Resolution Plan by the CDs, so what will happen if some fraud
RP shall disclose the scores of the BAP and BRP to angle was proven in the due course ?
submitters of these plans and invite them to improve
their plans in accordance with regulation 48. i.e. Swizz In this case below mentioned Sections of the
Challenge Method will apply Code will going to play a pivotal point-
The resolution plan having higher score on completion Section 67A: Fraudulent management of CD during
of process of improvement shall be considered by the PPIRP
CoC for approval. If the CoC does not approve it, the On and after the PPIRP Commencement Date, where an
process terminates. officer of the CD, manages its affairs with the intent to
defraud creditors or for any fraudulent purpose, the AA
may, on an application by the RP, pass an order imposing
Closure of PPIRP: (Step-6)
upon any such officer, a penalty which shall not be less
The PPIRP closes in the following circumstances:
than Rs. 1 lakh but may extend to Rs. 1 crore.
On approval of either the BRP or the BAP by the AA.
Section 77A: Punishment for offences related to
PPIRP
Where-
a CD provides any information in the Application which
is false in material particulars, knowing it to be false or
omits any material fact, knowing it to be material; or
a CD provides any information in the list of claims or
the preliminary information memorandum which is false
in material particulars, knowing it to be false or omits
any material fact, knowing it to be material; or
any person who knowingly and wilfully authorised or
permitted the furnishing of such information under point

BANKING FINANCE | FEBRUARY | 2023 | 27