{"id":32786,"date":"2026-08-11T16:17:35","date_gmt":"2026-08-11T10:47:35","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=32786"},"modified":"2026-08-11T16:17:35","modified_gmt":"2026-08-11T10:47:35","slug":"summary-of-amendments-to-ibbi-liquidation-regulations-2026","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/summary-of-amendments-to-ibbi-liquidation-regulations-2026\/","title":{"rendered":"Summary of Amendments to IBBI Liquidation Regulations 2026"},"content":{"rendered":"<p><strong>Summary of the Proposed Amendments to the IBBI Liquidation Regulations (2026)<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p>The document proposes major changes to India&#8217;s liquidation framework under the Insolvency and Bankruptcy Code (IBC) following the Insolvency and Bankruptcy Code (Amendment) Act, 2025. The overall objective is to make liquidation faster, more creditor-driven, and aligned with the new statutory timeline of 180 days. Following Key Objectives are Amendments to the IBBI Liquidation Regulations (2026)<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<ul>\n<li>Complete liquidation within 180 days.<\/li>\n<li>Give the Committee of Creditors (CoC) a central supervisory role during liquidation.<\/li>\n<li>Eliminate duplicate claim verification processes.<\/li>\n<li>Rationalize liquidator fees.<\/li>\n<li>Improve transparency and accountability.<\/li>\n<li>Enable replacement of liquidators.<\/li>\n<li>Facilitate transfer of guarantor assets.<\/li>\n<li>Ensure continuity of avoidance and recovery proceedings even after dissolution.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>Major Changes<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<ol>\n<li><strong> CoC Replaces Stakeholder Consultation Committee<\/strong><\/li>\n<\/ol>\n<ul>\n<li>The CoC formed during CIRP will continue during liquidation.<\/li>\n<li>The existing Stakeholder Consultation Committee (SCC) framework is removed.<\/li>\n<li>CoC will exercise oversight and approve key liquidation decisions.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<ol start=\"2\">\n<li><strong> New Liquidation Timeline<\/strong><\/li>\n<\/ol>\n<ul>\n<li>Liquidation must be completed within 180 days from commencement.<\/li>\n<li>The Adjudicating Authority may extend this period by up to 90 days.<\/li>\n<li>Model timelines are revised accordingly.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<ol start=\"3\">\n<li><strong> Simplified Claims Process<\/strong><\/li>\n<\/ol>\n<ul>\n<li>Claims already verified during CIRP will automatically continue into liquidation.<\/li>\n<li>Only new claims or updates to existing claims need to be submitted.<\/li>\n<li>Creditors must update claims if they receive recoveries after liquidation begins.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<ol start=\"4\">\n<li><strong> Revised Liquidator Fee Structure<\/strong><\/li>\n<\/ol>\n<ul>\n<li>The existing realization and distribution-based fee model is replaced.<\/li>\n<li>Fees may be paid:\n<ul>\n<li>As a monthly fee during liquidation, or<\/li>\n<li>As a percentage of distributions to stakeholders.<\/li>\n<\/ul>\n<\/li>\n<li>Changes reflect reduced work due to elimination of fresh claim verification.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<ol start=\"5\">\n<li><strong> Greater CoC Control<\/strong><\/li>\n<\/ol>\n<p><strong>\u00a0<\/strong><\/p>\n<p>The liquidator must obtain CoC approval for:<\/p>\n<ul>\n<li>Appointment of professionals.<\/li>\n<li>Liquidator remuneration.<\/li>\n<li>Major litigation decisions.<\/li>\n<li>Valuations.<\/li>\n<li>Liquidation costs.<\/li>\n<li>Asset sale strategies and auction-related decisions.<\/li>\n<li>Assignment of difficult-to-sell assets.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ol start=\"6\">\n<li><strong> Replacement of Liquidator<\/strong><\/li>\n<\/ol>\n<ul>\n<li>CoC may replace the liquidator with a 66% voting share.<\/li>\n<li>An application must be filed before the Adjudicating Authority.<\/li>\n<li>The existing liquidator continues until replacement is approved.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ol start=\"7\">\n<li><strong> Transfer of Guarantor Assets<\/strong><\/li>\n<\/ol>\n<ul>\n<li>New Regulation 8A enables transfer of assets of a corporate guarantor undergoing liquidation to support the CIRP of the principal borrower.<\/li>\n<li>Such transfers require CoC approval.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ol start=\"8\">\n<li><strong> Reporting Simplification<\/strong><\/li>\n<\/ol>\n<ul>\n<li>Multiple reports to the Adjudicating Authority are consolidated.<\/li>\n<li>Progress reports will include:\n<ul>\n<li>CoC meeting minutes,<\/li>\n<li>Asset memorandum,<\/li>\n<li>Sale reports,<\/li>\n<li>Status of legal proceedings and costs.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ol start=\"9\">\n<li><strong> Asset Sale Restrictions<\/strong><\/li>\n<\/ol>\n<ul>\n<li>Assets cannot be sold to persons ineligible under Section 29A.<\/li>\n<li>Related parties, liquidator relatives, and appointed professionals face additional restrictions on purchases.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ol start=\"10\">\n<li><strong> Clarification on Not Readily Realisable Assets (NRRA)<\/strong><\/li>\n<\/ol>\n<ul>\n<li>NRRAs include contingent, disputed, or avoidance-related assets even if not yet crystallized.<\/li>\n<li>Such assets may be assigned or transferred.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ol start=\"11\">\n<li><strong> Dissolution and Ongoing Proceedings<\/strong><\/li>\n<\/ol>\n<ul>\n<li>Avoidance transactions, fraudulent trading cases, and recovery suits can continue even after dissolution.<\/li>\n<li>CoC will decide how such proceedings are pursued and proceeds distributed.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ol start=\"12\">\n<li><strong> Security Interest Changes<\/strong><\/li>\n<\/ol>\n<ul>\n<li>Secured creditors must inform the liquidator within 14 days whether they relinquish security. Timelines for related payments are prescribed.<\/li>\n<\/ul>\n<p><strong>Treatment of Unremitted TDS\/TCS<\/strong><\/p>\n<p>A significant clarification is proposed TDS\/TCS deducted or collected by the corporate debtor before liquidation but not yet remitted to the Government will be treated as third-party trust assets. Such amounts will not form part of the liquidation estate. The proposal follows the NCLT Bengaluru ruling in <em>New Age Real Properties LLP v. Bhuvana Infra Projects Pvt. Ltd.<\/em> (04.09.2025).<\/p>\n<p><strong>Practical Takeaway for Insolvency Professionals <\/strong><strong>\u00a0<\/strong><\/p>\n<p>The amendments fundamentally transform liquidation from a liquidator-centric system to a creditor-driven (CoC-driven) system. The major themes are Time-bound liquidation (180 days), Continuation of CoC throughout liquidation, Reduced duplication in claim verification, Enhanced creditor oversight, Provision for replacement of liquidator, Protection against conflict-of-interest sales, Clarity on TDS\/TCS treatment and Better realization and recovery mechanisms.<\/p>\n<p>&nbsp;<\/p>\n<p>From a Insolvency Professionals &amp; insolvency advisory perspective, the most impactful changes are the 180-day liquidation mandate, CoC supervision, and exclusion of unremitted TDS\/TCS from the liquidation estate, as these will directly affect recoveries, stakeholder priorities, and liquidation strategy<\/p>\n<p><strong>Overall Impact<\/strong><\/p>\n<p>The amendments fundamentally transform liquidation from a liquidator-led process into a CoC-supervised process, reduce duplication of work, shorten timelines, strengthen creditor control, improve transparency, and clarify treatment of key issues such as guarantor assets, avoidance proceedings, and unremitted tax deductions<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Summary of the Proposed Amendments to the IBBI Liquidation Regulations (2026) \u00a0 The document proposes major changes to India&#8217;s liquidation framework under the Insolvency and Bankruptcy Code (IBC) following the Insolvency and Bankruptcy Code (Amendment) Act, 2025. The overall objective is to make liquidation faster, more creditor-driven, and aligned with the new statutory timeline of &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/32786"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=32786"}],"version-history":[{"count":1,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/32786\/revisions"}],"predecessor-version":[{"id":32787,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/32786\/revisions\/32787"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=32786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=32786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=32786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}