IBC Regulations
Regulations 21[31A. Stakeholders’ consultation committee.—
22[(1) The liquidator shall constitute a consultation committee within sixty days from the liquidation commencement date, based on the list of stakeholders prepared under Regulation 31 , to advise him on matters relating to-
(a) appointment of professionals and their remuneration under Regulation 7 ;
(b) sale under Regulation 32 , including manner of sale, pre-bid qualifications, reserve price, amount of earnest money deposit, and marketing strategy:
Provided that the decision(s) taken by the liquidator prior to the constitution of consultation committee shall be placed before the consultation committee for information in its first meeting.;]
(2) The composition of the consultation committee under sub-regulation (1) shall be as shown in the Table below:
Table
| Class of Stakeholders | Description | Number of Representatives |
| (1) | (2) | (3) |
| Secured financial creditors, who have relinquished their security interests under section 52 | Where claims of such creditors admitted during the liquidation process is less than 50% of liquidation value | Number of creditors in the category, subject to a maximum of 2 |
| Where claims of such creditors admitted during the liquidation process is at least 50% of liquidation value | Number of creditors in the category, subject to a maximum of 4 | |
| Unsecured financial creditors | Where claims of such creditors admitted during the liquidation process is less than 25% of liquidation value | Number of creditors in the category, subject to a maximum of 1 |
| Where claims of such creditors admitted during the liquidation process is at least 25% of liquidation value | Number of creditors in the category, subject to a maximum of 2 | |
| Workmen and employees | 1 | 1 |
| Governments | 1 | 1 |
| Operational creditors other than Workmen, employees and Governments | Where claims of such creditors admitted during the liquidation process is less than 25% of liquidation value | Number of creditors in the category, subject to a maximum of 1 |
| Where claims of such creditors admitted during the liquidation process is at least 25% of liquidation value | Number of creditors in the category, subject to a maximum of 2 | |
| Shareholders or partners, if any | 1 |
(3) The liquidator may facilitate the stakeholders of each class to nominate their representatives for inclusion in the consultation committee.
23 [(4) If the stakeholders of any class fail to nominate their representatives, under sub regulation (3), such representatives shall be selected by a majority of voting share of the class, present and voting.]
(5) Subject to the provisions of the Code and these regulations, representatives in the consultation committee shall have access to all relevant records and information as may be required to provide advice to the liquidator under sub-regulation (1).
(6) The liquidator shall convene a meeting of the consultation committee when he considers it necessary and shall convene a meeting of the consultation committee when a request is received from at least fifty-one percent of representatives in the consultation committee.
(7) The liquidator shall chair the meetings of consultation committee and record deliberations of the meeting.
(8) The liquidator shall place the recommendation of committee of creditors made under sub-regulation (1) of Regulation 39C of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, before the consultation committee for its information.
(9) The consultation committee shall advise the liquidator, by a vote of not less than sixty-six percent of the representatives of the consultation committee, present and voting.
(10) The advice of the consultation committee shall not be binding on the liquidator:
Provided that where the liquidator takes a decision different from the advice given by the consultation committee, he shall record the reasons for the same in writing 24[and mention it in the next progress report]]
21 Ins. by Notification No. IBBI/2019-20/GN/REG047 dated 25th July, 2019 (w.e.f. 25-07-2019).
22 Substituted by Notification No. IBBI/2021-22/GN/REG079, dated 30th September, 2021 (w.e.f. 30-09-2021).
Prior to substitution, it stood as under:
“(1) The liquidator shall constitute a consultation committee within sixty days from the liquidation commencement date, based on the list of stakeholders prepared under regulation 31, to advise him on the matters relating to sale under regulation 32.”
23 Substituted by Notification No. IBBI/2021-22/GN/REG079, dated 30th September, 2021 (w.e.f. 30-09-2021).
Prior to substitution, it stood as under:
“(4) If the stakeholders of any class fail to nominate their representatives, the required number of stakeholders with the highest claim amount in that class shall be included in the consultation committee.”
24 Inserted by Notification No. IBBI/2021-22/GN/REG079, dated 30th September, 2021 (w.e.f. 30-09-2021).