Resolution Professional under IBC: Appointment and Duties

The resolution professional is the person who runs the corporate insolvency resolution process from the first meeting of the committee of creditors until a plan is approved or the company is liquidated. The professional manages the company, keeps the claims list, prepares information for bidders, invites and examines resolution plans and pursues avoidance claims, while the committee takes the commercial decisions. This note explains the appointment, duties, powers and accountability of the resolution professional.

1. Definition and Appointment

• Section 5(27). Resolution professional means an insolvency professional appointed to conduct the corporate insolvency resolution process, and includes an interim resolution professional.
• Section 22. At its first meeting, the committee of creditors, by a vote of at least 66 per cent, either resolves to appoint the interim resolution professional as the resolution professional or to replace him with another professional, whose written consent is obtained; a replacement must be confirmed by the IBBI before the NCLT appoints him (Topic 24)
• Section 23. The resolution professional conducts the entire process and manages the operations of the corporate debtor during the CIRP; under a 2019 proviso, he continues to manage the operations after the CIRP period expires until a plan is approved under section 31 or a liquidator is appointed under section 34.

Figure 1: The interim professional and the resolution professional

2. Duties, Section 25

Figure 2: Main duties under section 25

• Preserving assets. To preserve and protect the assets of the corporate debtor, including the continued business operations, and to take immediate custody and control of all its assets, including its business records.
• Representing the debtor. To represent and act on behalf of the corporate debtor with third parties and exercise its rights in judicial, quasi-judicial and arbitration proceedings.
• Finance and advisers. To raise interim finance subject to the approval of the committee under section 28, and to appoint accountants, legal and other professionals.
• Claims and meetings. To maintain an updated list of claims, and to convene and attend all meetings of the committee.
• Information memorandum, section 29. To prepare an information memorandum containing the relevant information about the corporate debtor for prospective resolution applicants, who must undertake to maintain confidentiality.
• Inviting plans. To invite prospective resolution applicants who fulfil the criteria laid down by the professional with the committee's approval, having regard to the complexity and scale of operations of the business.
• Presenting plans. To examine each resolution plan for compliance with section 30(2) and the eligibility of the applicant under section 29A, and to present all plans at the meetings of the committee.
• Avoidance applications. To file applications for avoidance of preferential, undervalued, fraudulent and extortionate transactions under Chapter III (Topic 47)

3. Nature of the Powers

• Administrative, not adjudicatory. In Swiss Ribbons (2019), the Supreme Court held that the resolution professional has administrative powers only; he collates and verifies claims but cannot adjudicate disputes about them, which go to the NCLT.
• Not the committee's agent. The professional is not controlled by the committee in the sense of merely following instructions; he must exercise independent professional judgment and comply with the Code, even though significant actions need the committee's approval under section 28.
• Vijay Kumar Jain v Standard Chartered Bank, 2019. Members of the suspended board of directors are entitled to notice of and participation in meetings of the committee, and the resolution professional must give them copies of resolution plans, subject to confidentiality undertakings, since they may have useful information and a right to be heard.

4. Replacement, Section 27

Figure 3: Replacing the resolution professional

At any time during the process, the committee may, by a vote of at least 66 per cent, resolve to replace the resolution professional with another professional. The NCLT forwards the name to the IBBI for confirmation, and appoints the new professional after confirmation. The committee need not give reasons, but the decision must not be arbitrary, and the outgoing professional must hand over records and cooperate.

5. Accountability

• Section 208. As an insolvency professional, the resolution professional must take reasonable care and diligence, comply with the Code, regulations and the code of conduct, and allow inspections by the IBBI and the agency.
• Fees. His fee is fixed by the committee or, before it is formed, by the applicant, subject to the IBBI's regulations, and forms part of the insolvency resolution process costs.
• Section 233. No suit, prosecution or other legal proceeding lies against an insolvency professional for anything done or intended to be done in good faith under the Code.
• Discipline. The IBBI may inspect, investigate and, through its disciplinary committee, suspend or cancel his registration and impose penalties; the 2026 Amendment introduced a show-cause procedure, penalties of up to three times the loss or gain caused, disgorgement, and an appeal to the NCLAT (Topic 74)

6. Frequently Asked Questions

Can a resolution professional reject a creditor's claim?

He verifies claims and may admit or not admit them in the list, but he cannot finally adjudicate disputes. An aggrieved creditor may apply to the NCLT, which decides the claim under section 60(5).

Can the committee replace the resolution professional without giving reasons?

Yes, by a vote of at least 66 per cent under section 27, subject to confirmation of the new professional by the IBBI. The decision should not be arbitrary or mala fide.

Are suspended directors entitled to see the resolution plans?

Yes. In Vijay Kumar Jain (2019), the Supreme Court held that they are participants in the committee's meetings and must be given copies of the plans, subject to confidentiality undertakings.

7. Related Topics

• Topic 24: Interim Resolution Professional. The first thirty days.
• Topic 30: Management of the Corporate Debtor during CIRP. Running the business.
• Topic 35: Information Memorandum, Valuation and Invitation of Plans. The bidding process.