Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

Regulation 31. Insolvency resolution process costs

“Insolvency resolution process costs” under Section 5(13)

(e)

shall mean-

(a)

amounts due to suppliers of essential goods and services under Regulation 32; ¹⁰⁷[

(aa)

fee payable to authorised representative under ¹⁰⁸[sub-regulation (8)] of regulation 16A;

(ab)

out of pocket expenses of authorised representative for discharge of his functions under ¹⁰⁹[section 25A];] ¹¹⁰[

(ac)

fee payable to facilitator under clause (c) of sub-regulation (1) of regulation 16C.]

(b)

amounts due to a person whose rights are prejudicially affected on account of the moratorium imposed under section 14(1)

(d)

; ¹¹¹[

(ba)

fee payable to the Board under regulation 31A;]

(c)

expenses incurred on or by the interim resolution professional to the extent ratified under Regulation 33;

(d)

expenses incurred on or by the resolution professional fixed under Regulation 34; and

(e)

other costs directly relating to the corporate insolvency resolution process and approved by the committee. 112 ³[ 1A. Regulatory Fee

(1)

A regulatory fee calculated at the rate of 0.25 per cent of the realisable value to creditors under the resolution plan approved under section 31, shall be payable to the Board, where such realisable value is more than the liquidation value: Provided that this sub-regulation shall be applicable where resolution plan is approved under section 31, on or after 1st October 2022. ¹¹³[Explanation: For removal of doubts, it is hereby clarified that the regulatory fee under this sub-regulation, shall not be payable in cases where the approved resolution plan in respect of insolvency resolution of a real estate project is from an association or group of allottees in such real estate project.]

(2)

A regulatory fee calculated at the rate of one per cent of the cost being booked in insolvency resolution process costs in respect of hiring any professional or other services by the interim resolution professional or resolution professional, as the case may be, for assistance in a corporate insolvency resolution process, shall be payable to the Board, in the manner as specified in clause (cb) of sub-regulation (2) of regulation (7) of Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016.] ¹¹⁴[ 31B. Approval of committee for insolvency resolution process costs.

(1)

All insolvency resolution process costs incurred till the first meeting of the committee, along with the justification for incurring such costs, shall be placed by the resolution professional for the approval of the committee at its first meeting.

(2)

The resolution professional shall prepare a Going Concern Assessment Report which shall include —

(a)

estimated income, expenditure and cash flows arising from continuation of operations;

(b)

details of working capital requirements, if any; and

(c)

material risks of value erosion arising from continuation or suspension of operations.

(3)

The resolution professional shall place the Going Concern Assessment Report prepared under sub-regulation (2) at the first meeting of the committee and based on such Going Concern Assessment Report, the committee shall decide whether the operations of the corporate debtor shall be continued and, if so, the scope and duration of such operations.

(4)

After the first meeting of the committee of creditors, all insolvency resolution process costs shall be incurred only with the prior approval of the committee.

(5)

For the purpose of sub-regulation (4), the resolution professional shall, at each meeting of the committee—

(a)

place statements of estimate of income, expense and cash flow for the period up to the next meeting;

¹⁰⁷ Inserted by Notification No. IBBI/2018-19/GN/REG031, dated 3rd July, 2018 (w.e.f. 04-07-2018).

¹⁰⁸ Substituted by Notification No. IBBI/2019-20/GN/REG048, dated 25th July, 2019 (w.e.f. 25-07-2019). Prior to substitution it stood as: “sub-regulation (7)”.

¹⁰⁹ Substituted by Notification No. IBBI/2019-20/GN/REG048, dated 25th July, 2019 (w.e.f. 25-07-2019). Prior to substitution, it stood as: “section 25”.

¹¹⁰ Inserted by Notification No. IBBI/2024-25/GN/REG122, dated 03rd February, 2025 (w.e.f. 03-02-2025).

¹¹¹ Inserted by Notification No. IBBI/2022-23/GN/REG096, dated 20th September, 2022 (w.e.f. 01-10-2022).

¹¹² Inserted by Notification No. IBBI/2022-23/GN/REG096, dated 20th September, 2022 (w.e.f. 01-10-2022).

¹¹³ Inserted by Notification No. IBBI/2023-24/GN/REG102, dated 20th July, 2023.

¹¹⁴ Substituted by Notification No. IBBI/2026-27/GN/ REG153, dated 08th June, 2026 (w.e.f. 09-06-2026). Before substitution, the words stood as under: - “31B. Approval of committee for insolvency resolution process costs. The insolvency professional shall place in each meeting of the committee, the operational status of the corporate debtor and shall seek its approval for all costs, which are part of insolvency resolution process costs.”. (b) seek approval for insolvency resolution process costs proposed to be incurred until the next meeting; and (c) place a statement comparing actual insolvency resolution process costs with the estimates of costs approved by the committee in the previous meeting.]