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Debts amount to more than Rs.500
The individual is under arrest or imprisonment in the execution of a money decree
There is a subsisting order of attachment against his/her property in execution of such decree
A borrower can file an insolvency petition if he/she is unable to pay his/her debts on fulfilment of any of the following three conditions:
1. Debts amount to more than Rs.500
2. The borrower is under arrest or imprisonment in the execution of a money decree
3. There is a subsisting order of attachment against his/her property in execution of such decree
The IBC prescribes a creditor-in-control model for companies undergoing corporate insolvency resolution process. However, the business of the company continues as a going concern. On the insolvency commencement date (that is, when the NCLT accepts the application for commencement of corporate insolvency resolution process):
- A moratorium is declared.
- The board of directors is suspended.
- Management of the corporate debtor is handed over to the resolution professional for the duration of the corporate insolvency resolution process. This period is for 180 days, which in exceptional circumstances can be further extended by 90 days, and which should be completed within a maximum period of 330 days. Furthermore, it is now required for the resolution professional to continue to manage the operations of the corporate debtor even after the expiry of this period, until an order approving the resolution plan or appointing liquidation has been passed by the NCLT.However, the corporate debtor can continue to conduct its ordinary course of business during this period, except for payment obligations, which it may be able to avoid temporarily under a stay against commencement or continuation of legal proceedings. The IBC also specifically provides that the supply of essential goods or services to the corporate debtor will not be terminated, suspended, or interrupted during the moratorium period.
Yes, a corporate debtor undergoing CIRP can do so in terms of section 11 of the Code.