The Insolvency andBankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process forPersonal Guarantors to Corporate Debtors) Rules, 2019

MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 15th November, 2019

G.S.R. 854(E).—In exercise of the powers conferred by sub-section (1), clauses (g), (h), (i), (m),
(n) and (o) of sub-section (2) of section 239 read with clause (e) of section 2 and sub-section (2), clauses (c)
and (e) of sub-section (14) and clause (e) of sub-section (15) of section 79 of the Insolvency and
Bankruptcy Code, 2016 (31 of 2016), the Central Government hereby makes the following rules,
namely:—
1. Short title and commencement.― (1) These rules may be called the Insolvency and
Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for
Personal Guarantors to Corporate Debtors) Rules, 2019.
(2) They shall come into force from the 1st day of December, 2019.
18 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
2. Application.― These rules shall apply to insolvency resolution process for personal guarantors to
corporate debtors.
3. Definitions. ― (1) In these rules, unless the context otherwise requires, –
(a) “Adjudicating Authority” means-
(i) for the purpose of section 60, the National Company Law Tribunal constituted under section
408 of the Companies Act, 2013 (18 of 2013); or
(ii) in cases other than sub-clause (i), the Debt Recovery Tribunal established under sub-section
(1A) of section 3 of the Recovery of Debts and Bankruptcy Act, 1993 (51 of 1993);
(b) “Code” means the Insolvency and Bankruptcy Code, 2016 (31 of 2016);
(c) “electronic form” shall have the meaning assigned to it in clause (r) of section 2 of the
Information Technology Act, 2000 (21 of 2000);
(d) “form” means a form appended to these rules;
(e) “guarantor” means a debtor who is a personal guarantor to a corporate debtor and in respect
of whom guarantee has been invoked by the creditor and remains unpaid in full or part;
(f) “section” means section of the Code;
(g) “serve” means sending any communication by any means, including registered post, speed
post, courier or electronic form, which is capable of producing or generating an
acknowledgement of receipt of such communication:
Provided that where a document cannot be served in any of the modes, it shall be affixed at
the outer door or some other conspicuous part of the house or building in which the
addressee ordinarily resides or carries on business or personally works for gain;
(2) Words and expressions used and not defined in these rules but defined in the Code shall have
the meanings respectively assigned to them in the Code.
4. Relatives.― For the purposes of clause (ii) of Explanation to sub-section (2) of section 79, the
manner of relationship shall mean the manner as provided in the Explanation to clause (24A) of
section 5.
5. Excluded assets.― For the purposes of sub-section (14) of section 79,―
(a) the value of unencumbered personal ornaments under clause (c) of the said sub-section shall not
exceed one lakh rupees;
(b) the value of unencumbered single dwelling unit owned by the debtor under clause (e) of the said
sub-section shall not exceed,-
(i) in the case of dwelling unit in an urban area, twenty lakh rupees;
(ii) in the case of dwelling unit in rural area, ten lakh rupees.
Explanation.— For the purposes of this rule,-
(a) “rural area” shall have the same meaning as assigned to it in clause (o) of section 2 of the National
Rural Employment Guarantee Act, 2005 (42 of 2005);
(b) “urban area” means any area other than rural area.
6. Application by guarantor.― (1) The application under sub-section (1) of section 94 shall be
submitted in Form A, along with an application fee of two thousand rupees.
(2) The guarantor shall serve forthwith a copy of the application referred to in sub-rule (1) to every
financial creditor and the corporate debtor for whom the guarantor is a personal guarantor.
7. Application by creditor.― (1) A demand notice under clause (b) of sub-section (4) of section 95
shall be served on the guarantor demanding payment of the amount of default, in Form B.
(2) The application under sub-section (1) of section 95 shall be submitted in Form C, along with a fee
of two thousand rupees.
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(3) The creditor shall serve forthwith a copy of the application referred to in sub-rule (2) to the
guarantor and the corporate debtor for whom the guarantor is a personal guarantor.
(4) In case of a joint application, the creditors may nominate one amongst themselves to act on
behalf of all the creditors.
8. Confirmation or nomination of insolvency professional.― (1) For the purposes of sub-section (2)
of section 97 and sub-section (5) of section 98, the Board may share the database of the insolvency
professionals, including information about disciplinary proceedings against them, with the
Adjudicating Authority from time to time.
(2) For the purposes of sub-section (4) of section 97 and sub-section (3) of section 98, the Board
may share a panel of insolvency professionals, who may be appointed as resolution professionals,
with the Adjudicating Authority.
9. Copy of application.― The applicant shall provide a copy of the application filed under subsection (1) of section 94 or sub-section (1) of section 95, as the case may be, if not provided earlier,
to the resolution professional within three days of his appointment under sub-section (5) of section
97, and to the Board for its record.
10. Filing of application and documents.― (1) Till such time, rules of procedure for conduct of
proceedings under the Code are notified, the applications under rules 6 and 7 shall be filed and
dealt with by the Adjudicating Authority in accordance with ―
(a) rules 20, 21, 22, 23, 24 and 26 of Part III of the National Company Law Tribunal Rules, 2016
made under section 469 of the Companies Act, 2013 (18 of 2013); or
(b) rule 3 of the Debt Recovery Tribunal (Procedure) Rules, 1993 made under section 36 of the
Recovery of Debts and Bankruptcy Act, 1993 (51 of 1993) and regulations 3, 4, 5 and 11 of the
Debt Recovery Tribunal Regulations, 2015 made under section 22 of the Recovery of Debts and
Bankruptcy Act, 1993,
as the case may be.
(2) The application and accompanying documents shall be filed in electronic form, as and when
such facility is made available and as directed by the Adjudicating Authority:
Provided that till such facility is made available, the applicant may submit accompanying
documents, and wherever they are bulky, in electronic form, in scanned, legible portable document
format in a data storage device such as compact disc or a USB flash drive acceptable to the
Adjudicating Authority.
11. Withdrawal of application. ― (1) The Adjudicating Authority may permit withdrawal of the
application submitted under rule 6 or rule 7, as the case may be,-
(a) before its admission, on a request made by the applicant;
(b) after its admission, on the request made by the applicant, if ninety per cent. of the
creditors agree to such withdrawal.
(2) An application for withdrawal under clause (b) of sub-rule (1) shall be in Form D.