Declaration of moratorium and public announcement
Declaration of moratorium and public announcement [Section 13, 14 & 15 of the IBC]
After initiation of CIRP as application filed under section 7 or 9 or 10, the next process of the CIRP is declaration of moratorium and public announcement.
The Adjudicating Authority, after admission of the application under section 7 or section 9 or section 10, shall, by an order:
(a) declare a moratorium for the purposes referred to in section 14;
(b) cause a public announcement of the initiation of CIRP and call for the submission of claims under section 15.
The public announcement shall be made immediately after the appointment of the interim resolution professional(IRP).
(c) appoint an interim resolution professional in the manner as laid down in section 16.
Hon’ble Supreme Court in the matter of Mr. Anand Rao Korada Resolution Professional Vs. M/s. Varsha Fabrics (P) Ltd. & Ors. 42(IBC)42/2020 held that High Court ought not to have proceeded with the auction of the property of the Corporate Debtor, once the proceedings under the IBC had commenced, and an Order declaring moratorium was passed by the NCLT.
Public announcement of corporate insolvency resolution process [Sec. 15]
An insolvency professional shall make a public announcement immediately(not later than three days from the date of his appointment) on his appointment as an interim resolution professional.[CIRP Reg.-6].
1. Contain of public announcement[Sec. 15(1)]
The public announcement of the CIRP under the order referred to in section 13 shall be in Form A of the CIRP Regulation Schedule and contain the following information, namely:
(a) name and address of the corporate debtor under the CIRP;
(b) name of the authority with which the corporate debtor is incorporated or registered;
(c) the last date for submission of claims, as may be specified;
(d) details of the IRP who shall be vested with the management of the corporate debtor and be responsible for receiving claims;`
(e) penalties for false or misleading claims;
(f) the date on which the CIRP shall close, which shall be the one hundred and eightieth day from the date of the admission of the application under sections 7, 9 or section 10, as the case may be.
(g) state where claim forms can be downloaded or obtained from, as the case may be;[CIRP Reg.-6(2)]
(h) offer choice of three insolvency professionals identified under CIRP regulation 4A to act as the authorised representative of creditors in each class; and[CIRP Reg.-6(2)]
(i) provide the last date for submission of proofs of claim, which shall be 14 days from the date of appointment of the interim resolution professional.[CIRP Reg.-6(2)]
2. Language & place to publish the public announcement [CIRP Reg.-6(2)]
The public announcement shall be published:
(i) 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;
(ii) on the website, if any, of the corporate debtor; and
(iii) on the website, if any, designated by the Board for the purpose,
3. Expenses of public announcement [CIRP Reg.-6(3)]
The applicant shall bear the expenses of the public announcement which may be reimbursed by the committee to the extent it ratifies them.