Section 99 of IBC : Section 99: Submission Of Report By Resolution Professional

Explanation using Example

Imagine a small business owner, Mr. A, who has taken a loan from Mr. B but is unable to repay it due to financial difficulties. Mr. B files an application under section 95 of the Insolvency and Bankruptcy Code, 2016, to initiate insolvency proceedings against Mr. A. A resolution professional is appointed to handle the case.

Within ten days, the resolution professional examines the application. He notices that Mr. A claims to have repaid part of the debt via electronic transfer. To verify this, the professional asks Mr. A for bank statements or transaction receipts as evidence (as per section 99(2)(a)).

Mr. A provides a bank statement showing an electronic transfer to Mr. B. However, the resolution professional discovers that the registered debt with an information utility is higher than the amount Mr. A claims to have paid. According to section 99(3), Mr. A cannot dispute the validity of the registered debt amount.

The resolution professional then requests additional information from Mr. B to understand the discrepancy. Mr. B has seven days to respond with the necessary details (as per section 99(5)).

After reviewing all the information and ensuring that the application meets the requirements (section 99(6)), the resolution professional prepares a report. In the report, he recommends that the application should be accepted because Mr. A has not repaid the full debt, and provides reasons for this conclusion (as per section 99(7) and (9)).

Finally, the resolution professional shares a copy of the report with both Mr. A and Mr. B (as per section 99(10)), and submits it to the Adjudicating Authority for a decision.