New Delhi, May 13 (KNN) The Ministry of Corporate Affairs (MCA) has released a draft Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtors) Rules, 2019.

It has invited  suggestions or comments from stakehilders on the draft Rules. The comments or suggestions along with the brief justification may be sent by e-mail at comments_rules@mca.gov.in till May 31, 2019.

In a notification, MCA said “These rules may be called the Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtors) Rules, 2019.”

These Rules shall apply to matters relating to bankruptcy of personal guarantors to corporate debtors, according to the notification.

Working Group on Individual Insolvency (WG) has also recently in its report had held the view that a phased implementation of individual insolvency and bankruptcy is the intention of legislature and a practical necessity and had suggested that the provisions of the Code may first be notified for personal guarantors to CDs.

It had suggested that the remaining provisions of Part III of the Code applicable to individuals with business and to individuals without business may be notified in subsequent phases. It is necessary to have separate rules and regulations for each of the three classes of individuals (personal guarantors to corporate debtors, partnership and proprietorship firms, and other individuals).

Based on recommendations of the WG, followed by public consultation and advice of the Advisory Committee on Individual Insolvency, and keeping in view the amendment to the Code enabling phased implementation of individual insolvency, the Board worked on regulations on insolvency resolution of personal guarantors to CDs and has come out with the draft for public comments and suggestion.