IBBI Proposes Key Amendments to CIRP, Liquidation, and Personal Guarantor Regulations: A Comprehensive Analysis

The Insolvency and Bankruptcy Board of India (IBBI) has released a Discussion Paper outlining a series of proposed amendments aimed at strengthening the procedural framework governing insolvency proceedings under the Insolvency and Bankruptcy Code, 2016. These proposals span four distinct regulatory domains: valuation governance under the CIRP process, interim moratorium cessation for personal guarantors, the Resolution Professional's continuity obligations during withdrawal proceedings, and administrative simplification in the liquidation process. The last date for submitting public comments is 22nd July, 2026.

Background and Regulatory Context

Stakeholder representations received by IBBI flagged several procedural gaps and interpretive ambiguities in the existing regulatory framework that were hindering the efficient conduct of insolvency proceedings. In response, IBBI has proposed targeted amendments to the following regulations:

  • IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations)
  • IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019
  • IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 (PG to CD Regulations)
  • IBBI (Liquidation Process) Regulations, 2016 (Liquidation Regulations)

The proposed changes are also intended to bring the regulatory framework in alignment with the Insolvency and Bankruptcy Code (Amendment) Act, 2026, which introduced significant legislative changes, particularly in relation to personal guarantors.

Once public consultations are concluded, IBBI intends to frame these regulations under clauses (aa) and (t) of sub-section (1) of Section 196 read with Section 240 of the Insolvency and Bankruptcy Code, 2016.

Topic 1: CoC Approval for Valuer Appointment, Submission Timelines, and Confidentiality of Valuation Reports

The Problem

Under the existing framework, registered valuers (RVs) are appointed by the Resolution Professional (RP) under Regulation 27(1) of the CIRP Regulations without any mandatory involvement or approval from the Committee of Creditors (CoC). This is a notable structural gap, particularly because valuation outputs — comprising fair value and liquidation value — form the very basis upon which the CoC evaluates competing resolution plans.

Compounding this issue is the absence of any prescribed deadline for RVs to submit their valuation reports. Without a defined timeline, there is no regulatory mechanism to ensure that valuations are available in time for meaningful evaluation of resolution plans.

Furthermore, Regulation 36(2)(ka) currently requires fair value to be disclosed in the Information Memorandum (IM) itself. This provision creates a fundamental inconsistency in the confidentiality framework — since the IM is shared early in the process, disclosing fair value at that stage undermines the very purpose of maintaining valuation confidentiality until the resolution plan evaluation stage.

Proposed Amendments

IBBI has proposed the following regulatory changes to address these concerns:

1. CoC Approval Before Valuer Appointment

In regulation 27, in sub-regulation (1), after the word and mark "shall,", the words and mark "with the prior approval of the committee,", shall be inserted.

This ensures that the appointment of registered valuers is no longer a unilateral decision of the RP but is subject to the CoC's prior approval, enhancing governance and accountability.

2. Mandatory Submission of Valuation Reports — New Sub-Regulations (1A), (1B), and (1C)

Three new sub-regulations are proposed to be inserted after Regulation 27(1):

"(1A) Each registered valuer appointed under sub-regulation (1), shall submit its valuation report, including the fair value and the liquidation value, to the resolution professional in a sealed cover or through a secure electronic mode with restricted access, on or before the last date for receipt of resolution plans."

"(1B) The resolution professional shall provide the information memorandum to each registered valuer appointed under sub-regulation (1), and each such valuer shall, after taking into account the information memorandum and physical verification of the inventory and fixed assets of the corporate debtor, submit its valuation report, including the fair value and liquidation value, to the resolution professional in a sealed cover or through a secure electronic mode with restricted access, on or before the last date for receipt of resolution plans."