As per the provision of the Insolvency and Bankruptcy Code, 2016 (“IBC”), the Insolvency and Bankruptcy Board of India (“IBBI”) is required to recommend the name of an Insolvency Professional (“IP”) for appointment as Interim Resolution Professional (“IRP”) or Liquidator. Accordingly, the IBBI makes available panels of IPs (“Panel”) to the Adjudicating Authority (“AA”) for appointment as IRP or Liquidator, as the case may be. Further, the IBC also mandates that the IBBI is required to recommend the name of an IP for appointment as Resolution Professional (“RP”) or Bankruptcy Trustee (“BT”), in case of individual insolvency.
The Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) Guidelines, 2022 (“Guidelines”) were issued in supersession of the earlier Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustee (Recommendation) (Second) Guidelines, 2021 and came into effect on July 1, 2022.
The Guidelines were issued pursuant to the decision of the IBBI to continue its Panel of IPs so that the National Company Law Tribunal (“NCLT”) or (“DRT”) as the case may be, can readily select and appoint IPs for speedy insolvency resolution process. The Guidelines were issued so that the AA can make the abovementioned appointment during the validity period of the Panel from July 1, 2022 to December 31, 2022.
1. The IBBI shall prepare a common Panel of IPs for appointment as IRP, Liquidator, RP, and BT and share the same with the AA. The Panel shall have the zone-wise list of IPs based on the registered office of the IP.
2. The Panel will have a validity of 6 (six) months and shall be replaced by a new Panel every 6 (six) months.
3. The AA may choose any name from the Panel for appointment of IRP, Liquidator, RP or BT, for a Corporate Insolvency Resolution Process, Liquidation Process, Insolvency Resolution or Bankruptcy Process relating to a corporate debtors and personal guarantors to corporate debtors, as the case may be.
4. The eligibility criteria for IPs to be included in the Panel shall be as follows:
(i) there is no disciplinary proceeding pending against the IP.
(ii) the IP has not been convicted at any time in the last three years by a court of competent jurisdiction.
(iii) the IP expresses his interest to be included in the Panel for the relevant period.
(iv) the IP undertakes to discharge the responsibility as IRP, Liquidator, RP or BT, as he may be appointed by the AA.
(v) the IP holds an Authorization for Assignment (“AFA”), the validity of which shall be co-terminus with that of the Panel.
5. The IBBI shall invite expression of interest from the IPs in Form A (which is annexed to the Guidelines) by sending an e-mail to them at their email addresses registered with the IBBI, and the same has to be received in the prescribed form by the specified date.
6. The order in which the eligible IPs shall be included in the Panel shall be based on the volume of ongoing processes they have in hand.
7. The preparation of the Panel of IPs will be undertaken by a team of officers of the IBBI, as may be identified by a Whole-Time Member.
8. Once an IP has expressed interest in the prescribed form, the IP shall not:
(i) withdraw his interest to act as IRP, Liquidator, RP or BT, as the case may be.
(ii) decline to act as IRPs, Liquidator, RP or BT, as the case may be, if appointed by the AA.
(iii) surrender his registration to the IBBI or membership or AFA to his Insolvency Professional Agency during the validity of the Panel.
9. The AA may require the IBBI to recommend an IP from or outside the Panel and in such cases, the IBBI shall comply.
10. An IP in the Panel can be appointed as IRP, Liquidator, RP or BT, at the sole discretion of the AA.
11. The submission of expression of interest is an unconditional consent by the IP to act as an IRP, Liquidator, RP or BT of any process relating to a corporate or individual debtor, as the case may be.
12. An IP who declines to act as IRP, Liquidator, RP or BT, as the case may be, on being appointed by the AA, shall not be included in the Panel for the next 5 (five) years, without prejudice to any other action that may be taken by the IBBI.
By issuing the revised guidelines, the IBBI is continuing its effort to ensure speedy insolvency resolution by making available a set of identified IPs that the AA can choose from according to the situation.
Please find a copy of the Guidelines, here.
This update has been contributed by Prashanth Sabeshan, Partner and Neena Varghese (Associate).
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