Status as on- 12/05/2021
Section 15 of Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”) read with Chapter III of IBBI IRPCR Regulations, describes the requirement of the ‘Public Announcement’ by an Insolvency Professional.
- An insolvency professional shall make a public announcement immediately on his appointment as an interim resolution professional and that the word ‘immediately’ means not later than three days from the date of his appointment.
- The public announcement shall be made in Form A.
- The public announcement shall be published as per the following:- a) in one English and one regional language newspaper with wide circulation at the location of the registered office and principal office, if any, of the corporate debtor and any other location where in the opinion of the interim resolution professional, the corporate debtor conducts material business operations; b) on the website, if any, of the corporate debtor; and c) on the website, if any, designated by the Board for the purpose.
- The public announcement shall provide the last date for submission of proofs of claim, which shall be fourteen days from the date of appointment of the interim resolution professional.
- The applicant shall bear the expenses of the public announcement which may be reimbursed by the committee to the extent it ratifies them. The expenses on the public announcement shall not form part of insolvency resolution process costs.
Effect of improper public announcement under section 31(1) of IBC
In the case of Electrosteel Steels Limited vs. The State of Jharkh and, the High Court of Jharkhand ruled out that, the governmental authority had not been afforded an opportunity to file a claim before the Interim Resolution Professional due to an improper public announcement, then the claim would not be extinguished after the approval of the resolution plan. The Court further held that, since the public announcement was not made in Jharkhand, where the corporate debtor had its offices, the tax authority was unaware of the imitation of the CIRP, and thus was not afforded the opportunity to file its claims before the IRP. Consequently, it could not be held to be a stakeholder ‘involved’ in resolution plan within the meaning of Section 31 of IBC and thus the resolution plan would not be binding on it.
Disclaimer– The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinion before relying upon the article. For more information, please contact us at firstname.lastname@example.org