Section 9 Petition format to Start Insolvency Resolution Process

Bankruptcy

Section 9 Petition format to Start Insolvency Resolution Process

Registrationwala

This post was originally published in 2018 and has been updated on December 20, 2024, to provide you with the most current and accurate information.

Introduction

Insolvency refers to a financial state wherein an individual or a business entity is unable to pay off their debts that are due. Insolvency can happen in a company when its assets’ value is less than its debt amount. When a debtor is not able to pay off its debts to the creditors as a group, insolvency resolution is required. 

The framework for resolution of insolvency has been provided under the IBC 2016. In this blog post, we have explained the insolvency resolution process, and provided the Section 9 IBC petition format for initiating the insolvency resolution process. 

What is the Insolvency Resolution Process?

The insolvency resolution process is a process through which companies in financial distress can resolve their issues. This process focuses on the following:

  1. Making sure that the operational and financial creditors are getting paid.

  2. Making sure that the corporate debtor has an option to pay back the creditors

  3. Providing a resolution for an insolvent entity.

  4. Fair and expedited distribution of the corporate debtor’s assets among the creditors.

However, in order to start the insolvency resolution process, one needs to file a petition under the NCLT section 9 petition format. Who can and who can’ file this application is information that can be found right here. Nevertheless, even when one knows that they can file the resolution application, its acceptance by the Adjudicating authority (The NCLT) is subjective to its correctness. 

Things You Should Know Before Filing Section 9 Petition 

Before filing a petition under the insolvency petition format, there are certain things you need to know such as:

For now, let us discuss the format of section 9 petition meant for the financial creditor.

Insolvency Petition Format under Section 9 of the IBC

Note for understanding the format: the comments inside the “/**/” are not there in the actual form, we have put it forward to explain the intricacies of the details that the insolvency professionals are to enter in this form.

Form 1 Format

“ (See sub-rule (1) of rule 4)

APPLICATION BY FINANCIAL CREDITOR(S) TO INITIATE CORPORATE INSOLVENCY RESOLUTION PROCESS UNDER THE CODE.

(Under section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016)

 

To,

The National Company Law Tribunal

[Address]

From,

[Names and addresses of the registered offices of the financial creditors]

In the matter of [name of the corporate debtor]

Subject: Application to initiate corporate insolvency resolution process in the matter of [name of the corporate debtor] under the Insolvency and Bankruptcy Code, 2016.

Madam/Sir,

[Names of the financial creditor(s)], hereby submit this application to initiate a corporate insolvency resolution process in the matter of [name of corporate debtor]. The details for the purpose of this application are set out below:

Part - I

PARTICULARS OF APPLICANT (PLEASE PROVIDE FOR EACH FINANCIAL CREDITOR MAKING THE APPLICATION)

 

1.

NAME OF FINANCIAL CREDITOR

 

 

2.

DATE OF INCORPORATION OF FINANCIAL CREDITOR 

/* The Financial creditor can be a company, the incorporation date states the date on which the company was incorporated*/

 

 

3.

IDENTIFICATION NUMBER OF FINANCIAL CREDITOR

 

 

4.

ADDRESS OF THE REGISTERED OFFICE OF THE FINANCIAL CREDITOR

 

 

5.

NAME AND ADDRESS OF THE PERSON AUTHORISED TO SUBMIT APPLICATION ON ITS  BEHALF

(ENCLOSE AUTHORISATION)

 

 

6.

NAME AND ADDRESS OF PERSON RESIDENT IN INDIA AUTHORISED TO ACCEPT THE SERVICE OF PROCESS ON ITS BEHALF

(ENCLOSE AUTHORISATION)

 

 

 

Part - II

PARTICULARS OF THE CORPORATE DEBTOR

 

1

NAME OF THE CORPORATE DEBTOR

 

 

2

IDENTIFICATION NUMBER OF CORPORATE DEBTOR

 

 

3

DATE OF INCORPORATION OF CORPORATE DEBTOR

 

/* The Corporate debtor is a company, the incorporation date states the date on which the company was incorporated*/

 

 

4

NOMINAL SHARE CAPITAL AND THE PAID-UP

  SHARE CAPITAL OF THE CORPORATE DEBTOR AND/OR          DETAILS OF GUARANTEE CLAUSE AS PER MEMORANDUM OF ASSOCIATION (AS

 

APPLICABLE)

 

 

5

ADDRESS OF THE REGISTERED OFFICE OF THE CORPORATE DEBT

 

 

 

Part - III

PARTICULARS OF THE PROPOSED INTERIM RESOLUTION PROFESSIONAL

 

1.

NAME, ADDRESS, EMAIL ADDRESS AND THE REGISTRATION NUMBER OF THE PROPOSED INTERIM RESOLUTION PROFESSIONAL

 

/*Once the insolvency professional has been suggested, his contact details, along with his registration number has to be provided as well*/

 

 

 

Part - IV

PARTICULARS OF THE FINANCIAL DEBT

 

1

TOTAL AMOUNT OF DEBT GRANTED

DATE(S ) OF DISBURSMENT

 

/*amount of money lent to the corporate debtor and the date by which the debtor had to return that money*/

 

 

2

AMOUNT CLAIMED TO BE IN DEFAULT AND THE DATE ON WHICH THE DEFAULT OCCURRED (ATTACH THE WORKINGS FOR COMPUTATION OF AMOUNT AND DAYS OF DEFAULT IN TABULAR FORM)

 

/*you can provide an excel sheet for this purpose*/

 

 

 

Part - V

PARTICULARS OF THE FINANCIAL DEBT

 

1

PARTICULARS OF SECURITY HELD, IF ANY, THE DATE OF ITS CREATION, ITS ESTIMATED VALUE, AS PER THE CREDITOR

ATTACH A COPY OF CERTIFICATE OF REGISTRATION OF CHARGE ISSUED BY THE REGISTRAR OF COMPANIES(IF THE CORPORATE DEBTOR IS A COMPANY)

 

/*IF there was any security amount provided to the creditor after the creditor granted the debt to the corporate creditor, then the details of the same are to be provided as well.*/

 

2

PARTICULARS OF THE ORDER OF A COURT, TRIBUNAL OR ARBITRAL PAEL ADJUDICATION ON THE DEFAULT, IF ANY (ATTACH A COPY OF THE ORDER)

 

/*if there are any prior court hearings or judgments associated with the default, then they are to be placed as well*/

 

3

RECORDS OF RECORD WITH THE INFORMATION UTILITY, IF ANY (ATTACH A COPY OF SUCH A RECORD)

 

4

DETAILS OF SUCCESSION CERTIFICATE, OR PROBATE OF A WILL, OR LETTER OF ADMINISTRATION, OR COURT DECREE (AS MAY BE APPLICABLE), UNDER THE INDIAN SUCCESSION ACT, 1925(10 OF 1925)(ATTACH A COPY)

 

5

THE LATEST AND COMPLETE COPY OF THE FINANCIAL CONTRACT REFLECTING ALL AMENDMENTS AND WAIVERS TO DATE (ATTACH A COPY)

 

6

A RECORD OF DEFAULT AS AVAILABLE WITH ANY CREDIT INFORMATION COMPANY (ATTACH A COPY)

 

/*If there is any evidence pertaining to the default, that has to be brought forward as well*/

 

7

COPIES OF ENTRIES IN A BANKERS BOOK IN ACCORDANCE WITH THE BANKERS BOOKS EVIDENCE ACT, 1891 (18 OF 1891)(ATTACH A COPY)

 

8

LIST OF OTHER DOCUMENTS ATTACHED TO THIS APPLICATION IN ORDER TO PROVE THE EXISTENCE OF FINANCIAL DEBT, THE AMOUNT AND THE DATE OF DEFAULT.

 

/*list all of the documents that you have attached to this application. Be thorough and be precise who you do so. Any discrepancy can cause the petition rejection.*/

 

 

I, hereby certify that, to the best of my knowledge, [name of proposed insolvency professional], is fully qualified and permitted to act as an insolvency professional in accordance with the Insolvency and Bankruptcy Code, 2016 and the associated rules and regulations.

[Name of the financial creditor] has paid the requisite fee for this application through [state means of payment] on [date].

/*Demand Draft is the only prescribed format for the fee payment, no cheques or any other format are allowed*/

Yours sincerely,

/*format ends*/                                                                                                               ”

 

The above format is provided under form one. If you are an operational creditor, then the insolvency notice format to file the petition would be under Form 5.

 

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