Chapter-8

Chapter-8
Insolvency Practice, and Regulation and Administration Thereof

63. Prohibition on carrying on insolvency practice without license:

(1) No person shall operate insolvency practice without obtaining a license from the Office pursuant to this Act.
(2) Any person who has not obtained the license pursuant to Subsection (1) shall not be appointed as the inquiry officer, restructuring manager or liquidator in the course of carrying out insolvency proceedings under this Act. Where any person other than a licensee is appointed as the inquiry officer, restructuring manager or liquidator, such appointment shall ipso facto be void.

64. Application to be made for license:

(1) A person who is desirous of obtaining a license pursuant to Sub-section (1) of Section 63 shall make an
application, along with the prescribed fee, to the Office in the prescribed format.
(2) A person who makes an application pursuant to Sub-section (1) shall meet the following conditions:
(a) Have completed the age of thirty five years;
(b) Being a member of the prescribed professional association;
(c) Having acquired at least bachelor’s degree in commercial law, commerce, management, accounts or any other prescribed subject from a recognized university;
(d) Having abode in the State of Nepal;
(e) Being competent to carry on insolvency practice under this Act.
(3) On receipt of an application under Sub-section (1), the Office shall, if it considers appropriate to issue a license to carry on the insolvency practice, issue the license in the prescribed format.
(4) The license issued pursuant to Sub-section (3) shall be renewed as prescribed.

65. Establishment of Insolvency Administration Office:

(1) After the commencement of this Act, the Government of Nepal shall establish an Insolvency Administration Office, by notification in the Nepal Gazette. Pending the establishment of such Office, the Government of Nepal may
designate any of its offices to perform the functions of the Insolvency Administration Office.
(2) The Office established pursuant to Sub-section (1) shall perform the following functions:
(a) To administer insolvency practice;
(b) To register insolvency practitioners, issue licenses to them, and renew such licenses;
(c) To carry out general supervision of the management of companies which have become insolvent;
(d) To conduct investigations of the code of office required to be observed by insolvency practitioners;
(e) To maintain records of each company which has become insolvent; and
(f) To perform such other functions as prescribed.

66. Power to suspend or cancel license:

(1) Where a complaint is made that any person licensed pursuant to Sub-section (3) of Section 64 has not performed the functions as set forth in the license or the Office makes a report to that effect or the Court itself so considers, then the Court may institute action in this respect and issue an order suspending or canceling the license of such person.
(2) Prior to issuing any order pursuant to Sub-section (1), such person shall be provided with an opportunity to defend himself or herself.
(3) The Court may issue the order referred to in Sub-section (1) on the following grounds:
(a) Where the licensee does any act that is prohibited under this Act;
(b) Where the licensee does any acts required to be done under this Act in a reckless manner or fails to act such acts in a proper manner;
(c) Where the person licensed to practice insolvency himself or herself becomes insolvent;
(d) Where the person licensed to practice insolvency is convicted by a court of corruption, cheating, forgery or fraud.

67. Vacancies to be filled by Court:

Where the office of the restructuring manager or liquidator appointed under this Act falls vacant as a result of the
suspension or cancellation of license pursuant to Sub-section (1) of Section 66 or for any other reason, the Court may issue an order to appoint any other person who has possessed the qualification referred to in this Act to fill the
vacancy by fulfilling the procedures followed while making the original appointment.

68. Remuneration:

(1) The remuneration of the inquiry official, restructuring manager or liquidator appointed under this Act shall be as fixed by the meeting of creditors from time to time.
(2) Where remuneration cannot be fixed pursuant to Sub-section
(1), the Court may specify such remuneration on the basis of the report of the Office.

69. Separate account to be opened:

(1) The restructuring manager or liquidator appointed under this Act shall, while conducting insolvency proceedings under this Act, open and operate a separate bank account of every company to which he or she has been appointed.
(2) All amounts received by him or her shall be paid into the bank account opened pursuant to Sub-section (1).
(3) Any amount balance in the bank account opened pursuant to Sub-section (1) shall be invested only in the prescribed fields.
(4) In addition to those mentioned in Sub-section (1), the restructuring manager or liquidator shall maintain other accounts and books of accounts clearly reflecting the full and actual affairs of the insolvency proceedings of every company which has become insolvent and submit the statements of such accounts and books to the Court or the Office, as per necessity.
(5) The restructuring manager or liquidator shall, on performance of his or her duties, shall have the accounts and books of accounts, as well as the statements thereof, maintained by him or her pursuant to this Section
audited in accordance with the laws and hand them over the same to the Office.

70. Power to remove by order of Court:

(1) Where a complaint is made that a restructuring manager or liquidator appointed pursuant to this Act has failed to work in accordance with this Act while carrying out the insolvency proceedings of any company assigned to him or her or where his or her conduct is found to be contrary to this Act, the Court may issue an order to remove him or her.
(2) The concerned person shall not be deprived of an opportunity to defend himself or herself, prior to issuing the order referred to in Subsection (1).

71. Reply to be made:

Where the Court or the Office asks the restructuring manager or liquidator appointed pursuant to this Act any question in relation to any act or action done or taken by him or her, he or she shall make a reply to such question promptly.