The Resolution Professional (RP) is the key functionary who manages the affairs of the corporate debtor during the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. The RP acts as a neutral and independent professional, balancing the interests of creditors, the corporate debtor, and other stakeholders while ensuring compliance with the statutory framework.
Appointment Process — IRP to RP
When CIRP is initiated, the NCLT appoints an Interim Resolution Professional (IRP) who is nominated in the application. The IRP manages the affairs of the corporate debtor and constitutes the Committee of Creditors (CoC) within 30 days of appointment. At the first meeting of the CoC, the committee may either confirm the IRP as the Resolution Professional or appoint a different insolvency professional as the RP by a vote of 66% of the voting share. The RP then takes over the management of the CIRP for its remaining duration.
Qualifications & IBBI Registration
To be eligible for appointment as an RP, a person must be registered as an insolvency professional with the Insolvency and Bankruptcy Board of India (IBBI) under the IBBI (Insolvency Professionals) Regulations, 2016. This requires passing the Limited Insolvency Examination, enrolling with an Insolvency Professional Agency (IPA), and meeting the experience and qualification criteria prescribed by IBBI. The RP must not have any conflict of interest with the corporate debtor, its creditors, or other stakeholders.
Duties of the Resolution Professional
The RP's duties under Section 25 of the IBC include: managing the affairs of the corporate debtor as a going concern; receiving and collating claims from creditors; constituting and conducting meetings of the CoC; preparing an information memorandum for prospective resolution applicants; inviting, receiving, and presenting resolution plans to the CoC; filing applications before the NCLT as required; and maintaining an updated list of claims. The RP must act in a fair, transparent, and professional manner at all times.
Powers of the RP
The RP has the power to take control of all assets of the corporate debtor, access its books of accounts and records, raise interim finance with the approval of the CoC (by 66% vote), appoint professionals such as valuers and accountants, and enter into contracts on behalf of the corporate debtor for keeping it as a going concern. The powers of the board of directors and partners of the corporate debtor stand suspended during CIRP and are exercised by the RP.
Removal & Replacement
The CoC may replace the Resolution Professional at any time by a vote of 66% of the voting share. The NCLT may also direct the replacement of the RP if there are disciplinary proceedings or findings of misconduct by IBBI. An RP who is removed must hand over all records, documents, and assets in their possession to the newly appointed RP within the timeline prescribed by the Tribunal.
Code of Conduct
The RP is bound by the Code of Conduct set out in the First Schedule of the IBBI (Insolvency Professionals) Regulations. This requires integrity, objectivity, impartiality, and independence. The RP must not influence the decision of the CoC, must disclose all conflicts, and must maintain confidentiality of commercially sensitive information. Violations may result in disciplinary action by IBBI, including suspension or cancellation of registration.
Key Points
- The IRP is appointed at CIRP commencement; the CoC confirms or replaces them with an RP.
- An RP must be IBBI-registered and free from conflicts of interest.
- Key duties: managing affairs as going concern, collating claims, conducting CoC meetings, inviting resolution plans.
- Board powers are suspended and exercised by the RP during CIRP.
- The CoC can replace the RP by a 66% vote at any time.
- The RP is bound by IBBI's Code of Conduct requiring integrity, objectivity, and independence.