Process of Inviting Resolution Plan by Committee of Creditors under IBC

The Insolvency and Bankruptcy Code, 2016 (IBC) was enacted to ensure the timely resolution of stressed companies and to maximise the value of their assets. Once a corporate insolvency resolution process (CIRP) begins, the management of the corporate debtor is taken over by a Resolution Professional (RP), who acts under the supervision of the Committee of Creditors (CoC). The most crucial stage in this process is the invitation, evaluation, and approval of resolution plans.

The process of inviting a resolution plan determines the future of the corporate debtor. It ensures that only eligible and competent applicants participate, and that the best possible resolution plan is selected in the interest of all stakeholders. The steps involved are governed mainly by Regulations 36A to 38 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, along with Section 30 of the IBC.

Legal Framework on Process of Inviting Resolution Plan

Under the IBC, the Committee of Creditors has the ultimate authority to decide which resolution plan to approve. The RP acts as a facilitator and ensures that the entire process is conducted transparently and in compliance with the law. The following regulations govern the process:

• Regulation 36A: Invitation of Expression of Interest (EOI).
• Regulation 36B: Request for Resolution Plans (RFRP).
• Regulation 36C: Strategy for marketing of assets.
• Regulation 37: Contents and measures of a resolution plan.
• Regulation 38: Mandatory contents of a resolution plan.

Each stage is structured to maintain fairness, competitiveness, and maximum participation, which are essential for effective resolution and value realisation.

Stage 1: Issuance of Expression of Interest (EOI)

The process of inviting resolution plans begins with the issuance of an Expression of Interest (EOI). This step ensures that only serious and eligible applicants come forward to participate in the bidding process.

Form and Manner of Issuance

As per Regulation 36A, the RP must issue a public notice inviting EOIs within 60 days from the insolvency commencement date. This notice is published in Form G, which provides brief details of the invitation.

The publication must appear in:

• One English and one regional language newspaper with wide circulation near the registered and principal offices of the corporate debtor.
• The website of the corporate debtor, if any.
• The website designated by the Insolvency and Bankruptcy Board of India (IBBI).
• Any other manner decided by the CoC.

The detailed invitation must include:

• Eligibility criteria for prospective resolution applicants approved by the CoC.
• Ineligibility norms under Section 29A of the IBC.
• Information about the corporate debtor, necessary for expressing interest.
• A minimum period of 15 days for submission of EOIs.

No fee or non-refundable deposit can be charged for submitting the EOI. Moreover, the RP cannot modify the invitation more than once.

Contents of the EOI

The EOI must be unconditional and accompanied by:

• An undertaking that the applicant meets the criteria specified by the CoC.
• Documents supporting the fulfilment of eligibility criteria.
• An undertaking that the applicant is not disqualified under Section 29A of the Code.
• Evidence to verify the absence of disqualification.
• A declaration that the information provided is true and that false disclosure will lead to disqualification and penal consequences.
• An undertaking to maintain confidentiality of all shared information.

This step filters out ineligible participants and establishes a transparent framework for the next stage.

Preparation of Provisional and Final List

After receiving EOIs, the RP prepares a provisional list of eligible applicants within ten days. This list is shared with both the CoC and all those who submitted EOIs. Applicants can file objections within five days of receiving the list. After considering these objections, the RP issues a final list of eligible resolution applicants within another ten days.

Stage 2: Issuance of Request for Resolution Plan (RFRP)

Once the final list is ready, the RP moves to the next step — inviting resolution plans. This is done through the Request for Resolution Plan (RFRP) under Regulation 36B.

Information Included in the RFRP

The RP must send the following to all applicants in the final list:

• Information Memorandum (IM) – contains financial, operational, and legal details of the corporate debtor.
• Evaluation Matrix (EM) – outlines parameters on which the resolution plans will be evaluated.
• Request for Resolution Plans – defines each step, interaction process, and timelines.

The RFRP is issued electronically and gives each applicant at least 30 days to submit their resolution plan.

Other Important Requirements

• The RFRP cannot require any non-refundable deposit for submission.
• It must require the applicant to provide a performance security once the plan is approved by the Adjudicating Authority. This ensures that the applicant remains committed to implementing the plan.
• If no resolution plan is received, the RP, with CoC’s approval, can issue a fresh RFRP for the sale of one or more assets of the corporate debtor.
• The RP can also extend the submission timeline with the approval of the CoC.

The Evaluation Matrix serves as the guiding document for comparing and assessing all plans on objective parameters such as viability, financial proposal, implementation capability, and potential recovery.

Stage 3: Strategy for Marketing of Assets

The marketing of the corporate debtor’s assets plays a key role in attracting a larger number of resolution applicants. Regulation 36C, introduced in 2022, directs the RP to prepare a marketing strategy in consultation with the CoC, especially when the corporate debtor’s total assets exceed ₹100 crore.

This strategy aims to:

• Increase visibility of the assets among potential investors.
• Encourage competition and improve value realisation through multiple bids.
• Ensure that the availability of the assets is widely known in the market.

The CoC’s approval is required to implement this strategy, including the associated costs. In some cases, CoC members themselves may take steps to promote or market the assets.

This provision was added to ensure price discovery through competition and to prevent undervaluation of assets, aligning with the Code’s goal of maximising value.

Stage 4: Submission and Evaluation of Resolution Plans

After receiving the RFRP, the prospective resolution applicants prepare and submit their plans electronically to the RP.

Submission of Resolution Plan

Each resolution plan must be accompanied by:

• An affidavit confirming eligibility under Section 29A.
• Necessary undertakings and documents as per the RFRP.
• Details of proposed resolution strategy and distribution among creditors.

The RP reviews all submitted plans to ensure they comply with the IBC and regulations. Non-compliant or incomplete plans are rejected.

Evaluation by RP and CoC

The RP presents all compliant plans to the CoC along with a comparative evaluation based on the evaluation matrix. Often, applicants are invited to present their plans before the CoC to address queries and clarifications.

The CoC evaluates plans on parameters such as:

• Feasibility and viability of the business proposal.
• Financial strength and credibility of the resolution applicant.
• Proposed distribution mechanism, especially the treatment of operational creditors.
• Timelines and implementation plan for revival.
• Impact on stakeholders and potential recovery value.
  

This ensures that the CoC makes an informed decision while considering all practical aspects of revival and sustainability.

Stage 5: Approval of the Resolution Plan

After evaluation, the CoC proceeds to vote on the resolution plans. The plan that receives at least 66% of the voting share of financial creditors is considered approved under Section 30(4) of the IBC.

Once approved, the RP submits the selected resolution plan to the Adjudicating Authority (National Company Law Tribunal – NCLT) for final approval.

The RP must submit the approved plan within 15 days before the end of the 180-day CIRP period. However, the CoC and NCLT may extend the CIRP period up to 330 days, including litigation delays.

If the CoC fails to approve a plan within this timeline, the corporate debtor proceeds into liquidation.

Mandatory Contents of a Resolution Plan

Under Regulation 38, every resolution plan must:

• Provide details of payment to operational and financial creditors.
• Explain how it protects the interests of all stakeholders.
• Mention if the applicant or its related parties have failed to implement previous plans.
• Include a clear implementation schedule and management structure.
• Ensure supervision mechanisms for monitoring the implementation.
• State how avoidance transactions (preferential, undervalued, or fraudulent) will be pursued post-approval and how proceeds will be distributed.
• Demonstrate that the plan is feasible, viable, and that the applicant has the capacity to implement it.

Timelines for the Process

The IBC mandates strict timelines to ensure speedy resolution:

• Within 60 days of CIRP commencement: Publication of Form G inviting EOIs.
• 10 days after EOI submission deadline: Publication of provisional list.
• 10 more days after objections: Publication of final list.
• Within 5 days of final list: Issuance of RFRP, IM, and EM.
• Minimum 30 days: Time for applicants to submit resolution plans.
• Within 90 days of CIRP commencement: The CoC should ideally finalise a plan.
• At least 15 days before the end of 180-day CIRP period: Submission of the approved plan to the NCLT.

These timelines ensure that the process remains efficient and prevents unnecessary delays in resolution.

Conclusion

The process of inviting resolution plans under the IBC is not merely a procedural step but the cornerstone of India’s insolvency regime. It ensures that financially distressed companies are given a fair opportunity for revival, while also balancing the interests of creditors and other stakeholders.

Every stage—from issuing the Expression of Interest to final approval—has been designed to uphold transparency, efficiency, and value maximisation. The CoC’s commercial wisdom, backed by the RP’s diligence, forms the foundation for achieving these objectives.