The Insolvency Commencement Date

The date on which the application for the initiation of the corporate insolvency resolution process (“CIRP”) is admitted by the adjudicating authority (AA) in accordance with sections 7 or 9 or 10 of the Insolvency and Bankruptcy Code, 2016 (“IBC/Code”) is known as the Insolvency Commencement Date (“ICD”). The Code is explicit about this. Regulation 6 of CIRP Regulations specifies that the interim resolution professional (“IRP”) has to cause the public announcement within 3 days of his appointment.

There are instances where the date of appointment of IRP is different or order copy would be uploaded with a delay of, say two to five days or the IRP receive the hard copy of the order after seven to ten days. So, it is a dilemma as to what will be the Insolvency Commencement Date. The process under the IBC is time-bound that is well-known for adhering compliances strictly to insolvency professional agency (“IPA”) and Insolvency and Bankruptcy Board (“IBBI/Board”).

Thus, it is always a dilemma as to what will be the ICD?

The best course of action for an IRP would be to start ICD on the date of his/her appointment and file an application with the adjudicating authority seeking that, even though ICD is earlier, he shall be permitted to consider the ICD from the date of his appointment for compliance purposes as otherwise he would have no locus to do CIRP compliance on behalf of CD (until he is appointed).

It is crucial to recognise that the IRP can only act on behalf of CD once the AA passes a clear order, and the delay between the appointment of the IRP and the ICD should be condoned. Only after being appointed can the IRP begin compliance; furthermore, he need not wait to get a copy of the order, as his responsibilities begins immediately upon appointment. It's true that the order copy strengthens his locus of control and demonstrates his appointment, but doing so would slow down the process. Hence, the IRP shall act from the day he is appointed as his responsibility triggers from then on. Also, the IRP shall mention the each of the date like ICD, date of his appointment, date of receipt of order etc., on the public announcement to make sure that the stakeholders are well aware about the dates.

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