NEW DELHI: The Insolvency and Bankruptcy Board of India (IBBI) has notified regulations for handling complaints and grievances filed against service providers including insolvency professionals, agencies and information utilities. These regulations, notified on December 7, became effective the same day, according to a corporate affairs ministry statement released on Sunday.
According to the Ministry of Finance, the regulations “provide for an objective and transparent procedure for disposal of grievances and complaints by the IBBI, that does not spare a mischievous service provider, but does not harass an innocent service provider.” As per the notified regulations, stakeholders who can file a complaint include debtors, creditors, claimants, service providers, resolution applicants or any other person having an interest in an insolvency resolution, liquidation, voluntary liquidation or bankruptcy transaction under IBC, 2016.
“On the other hand, a service provider, against whom a complaint can be filed by a stakeholder under the Regulations, includes insolvency professional agency, insolvency professional, insolvency professional entity or information utility,” the statement said.
A stakeholder is required to file a grievance with details of the conduct of the service provider that has caused “suffering to the aggrieved; details of suffering, whether pecuniary or otherwise, the aggrieved has undergone; how the conduct of the service provider has caused the suffering of the aggrieved; details of his efforts to get the grievance redressed from the service provider; and how the grievance may be redressed.” Stakeholders will also need to pay a fee of Rs. 2,500 along with the complaint. “If the complaint is not frivolous or malicious, the fee will be refunded,” the Finance Ministry said.
The regulations have been long awaited by stakeholders, even as the working pace of IBBI has remained on the fast-track over the last year. Currently, 11 out of the 12 cases chosen by the Reserve Bank of India (RBI) to undergo early bankruptcy proceedings are in advanced stages of auctioning assets.
Some, such as that of Essar Steel Ltd, have seen promoters present resolution plans. Another 29 firms have also been identified by RBI and are set to head to bankruptcy court if lenders cannot resolve their cases by 13 December. The government also promulgated an ordinance last month barring wilful defaulters and promoters who haven't settled their debts from bidding for assets being auctioned.