Section 99: Submission of Report by Resolution Professional

Section 99 of the Insolvency and Bankruptcy Code, 2016 governs examination of an insolvency resolution application filed under Section 94 or Section 95 and the report that the resolution professional must submit to the Adjudicating Authority.

Current framework: The notified Part III insolvency resolution provisions operate for personal guarantors to corporate debtors. Section 99 forms a key examination stage between appointment of the resolution professional and the Adjudicating Authority's decision under Section 100.

Section 99 - Statutory Provision

(1) The resolution professional shall examine the application referred to in section 94 or section 95, as the case may be, within ten days of his appointment, and submit a report to the Adjudicating Authority recommending for approval or rejection of the application.

(2) Where the application has been filed under section 95, the resolution professional may require the debtor to prove repayment of the debt claimed as unpaid by the creditor by furnishing-

(a) evidence of electronic transfer of the unpaid amount from the bank account of the debtor;

(b) evidence of encashment of a cheque issued by the debtor; or

(c) a signed acknowledgment by the creditor accepting receipt of dues.

(3) Where the debt for which an application has been filed by a creditor is registered with the information utility, the debtor shall not be entitled to dispute the validity of such debt.

(4) For the purposes of examining an application, the resolution professional may seek such further information or explanation in connection with the application as may be required from the debtor or the creditor or any other person who, in the opinion of the resolution professional, may provide such information.

(5) The person from whom information or explanation is sought under sub-section (4) shall furnish such information or explanation within seven days of receipt of the request.

(6) The resolution professional shall examine the application and ascertain that-

(a) the application satisfies the requirements set out in section 94 or 95;

(b) the applicant has provided information and given explanation sought by the resolution professional under sub-section (4).

(7) After examination of the application under sub-section (6), he may recommend acceptance or rejection of the application in his report.

(8) Where the resolution professional finds that the debtor is eligible for a fresh start under Chapter II, the resolution professional shall submit a report recommending that the application by the debtor under section 94 be treated as an application under section 81 by the Adjudicating Authority.

(9) The resolution professional shall record the reasons for recommending the acceptance or rejection of the application in the report under sub-section (7).

(10) The resolution professional shall give a copy of the report under sub-section (7) to the debtor or the creditor, as the case may be.

Ten-Day Period for Examination and Report

The resolution professional must examine the Section 94 or Section 95 application within ten days of appointment and submit a report to the Adjudicating Authority recommending approval or rejection. The recommendation is not itself the admission or rejection order; that decision is governed by Section 100.

Proof of Repayment in a Creditor Application

Where the application has been filed by a creditor under Section 95, the resolution professional may require the debtor to prove repayment of the debt claimed as unpaid. Section 99(2) identifies evidence of electronic transfer, evidence of encashment of a cheque, or a signed acknowledgment by the creditor accepting receipt of dues.

Debt Registered with an Information Utility

Section 99(3) provides that where the debt forming the basis of a creditor's application is registered with an information utility, the debtor is not entitled to dispute the validity of that debt. Information utilities are regulated information infrastructure under the Code and the applicable IBBI framework.

Power to Seek Further Information

The resolution professional may seek further information or explanation connected with the application from the debtor, creditor or another person considered capable of providing it. Under Section 99(5), the requested information or explanation must be furnished within seven days after receipt of the request.

Acceptance or Rejection Recommendation

The resolution professional examines whether the application satisfies the requirements of Section 94 or Section 95 and whether the applicant has supplied the information and explanation sought. The report may recommend acceptance or rejection, and Section 99(9) expressly requires reasons for that recommendation.

Fresh Start Recommendation

Section 99(8) states that where the resolution professional finds a debtor eligible for a fresh start under Chapter II, the report is to recommend that the debtor's Section 94 application be treated as an application under Section 81 by the Adjudicating Authority. The practical operation of this provision depends on the commencement and applicability of the relevant fresh start provisions.

Copy of Report to Debtor or Creditor

Under Section 99(10), the resolution professional must provide a copy of the report made under subsection (7) to the debtor or creditor, as the case may be.

Meaning of Important Terms

Resolution professional: Section 79 defines the resolution professional for Part III as an insolvency professional appointed under that Part for conducting the fresh start process or insolvency resolution process.

Information utility: Section 3 defines an information utility as a person registered with the Board as an information utility under Section 210.

Creditor: Section 3 defines a creditor as a person to whom a debt is owed and includes financial creditors, operational creditors, secured creditors, unsecured creditors and decree-holders.

Debt: Section 3 defines debt as a liability or obligation in respect of a claim which is due from any person and includes financial debt and operational debt.

Adjudicating Authority: For personal guarantors to corporate debtors, jurisdiction is governed by Section 60 of the Code together with the notified Part III framework.

Related Provisions

For a particular proceeding, check the official Code, current commencement notifications, applicable rules, latest IBBI regulations and relevant judicial decisions.