The Insolvency and Bankruptcy Board of India (IBBI) issued the Insolvency Resolution Process for Corporate Persons (Third Amendment) Regulations, 2025 on 19 May 2025, followed by the Fourth Amendment Regulations on 26 May 2025. These amendments introduce refinements to the procedural framework governing the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code, 2016.
Background
The IBBI periodically amends the CIRP regulations to address procedural gaps, incorporate judicial guidance from NCLT and Supreme Court decisions, and streamline the resolution process. The 2025 amendments follow a period of significant judicial activity on IBC matters, including the Supreme Court's order in the Bhushan Power and Steel liquidation case, which underscored the importance of strict compliance with statutory timelines and procedural requirements.
The Third and Fourth Amendment Regulations together represent the IBBI's regulatory response to evolving operational challenges in the administration of CIRP proceedings across the country.
Key Provisions
The combined amendments address the following areas:
Timeline compliance strengthening: The amendments reinforce the mandatory nature of CIRP timelines under Section 12 of the IBC, introducing enhanced reporting obligations on resolution professionals to document compliance with each milestone in the resolution process.
Resolution plan evaluation framework: The amendments refine the criteria and process for evaluation of resolution plans by the committee of creditors, addressing issues that have arisen in practice regarding the treatment of competing plans and conditional offers.
Stakeholder communication: New provisions mandate structured communication protocols between resolution professionals and the committee of creditors, ensuring that all material developments in the CIRP are documented and reported within specified timeframes.
IBBI reporting and behavioural impact study: In conjunction with the amendments, the IBBI published a Report on Behavioural Impact of IBC on 22 May 2025, providing empirical data on how the insolvency framework has influenced corporate behaviour, credit discipline, and resolution outcomes since its enactment.
Implications for Practitioners
Insolvency professionals managing active CIRP proceedings must review the amended regulations carefully to ensure compliance with the new reporting and documentation requirements. The enhanced timeline compliance obligations are particularly significant in light of the Supreme Court's willingness to order liquidation for procedural non-compliance, as demonstrated in the Bhushan Power matter.
For legal advisors to resolution applicants, the refined plan evaluation framework provides greater procedural clarity on how competing bids will be assessed. This should inform bid strategy and the structuring of resolution proposals.
The IBBI's Behavioural Impact Report merits attention from policy researchers and practitioners alike, as it provides data-driven insights into the efficacy of the IBC framework in promoting credit discipline and corporate restructuring. Practitioners advising creditors and debtors should use these findings to inform their strategic approach to insolvency proceedings.