Status as on- 19/05/2021

The resolution professional, as proposed respectively in the application under section 7 or section 10 of IBC, shall be appointed as the interim resolution professional under Section 16(2) of IBC, if no disciplinary proceedings are pending against him.

However, no proposal for an interim resolution professional is made, only the Adjudicating Authority (“NCLT”) shall make a reference to the Board (“IBBI”) for the recommendation of an insolvency professional who may act as an interim resolution professional under Section16(3)(a) of IBC.

Section 16(1) of the Insolvency and Bankruptcy Code, 2016 requires Adjudicating Authority to appoint an interim resolution professional (IRP) within fourteen days from the insolvency commencement date. As the name suggests Interim resolution professional is appointed for a very short period not exceeding 30 days from the date of his appointment.

The Board shall, within ten days of the receipt of a reference from the Adjudicating Authority under sub-section (3) of section 16, recommend the name of an insolvency professional to the Adjudicating Authority against whom no disciplinary proceedings are pending.

The term of the interim resolution professional shall continue till the date of appointment of the resolution professional under section 22 of IBC.

Management of affairs of Corporate Debtor by Interim Resolution Professional

Under section 17(1) of IBC, the interim resolution professional shall manage the affairs of the Corporate Debtor.

1. The powers of the Board of Directors or the Partners of the corporate debtor shall stand suspended and only exercised by the interim resolution professional.
2. The officers and managers of the corporate debtor shall report to the interim resolution professional and provide access to such documents and records of the corporate debtor as required by the interim resolution professional.
3. The financial institutions maintaining accounts of the corporate debtor shall act on the instructions of the interim resolution professional in relation to such accounts and furnish all information relating to the corporate debtor available with them to the interim resolution professional.
4. Under section 17(2) of IBC, the interim resolution professional vested with the management of corporate debtor shall act and execute in the name and on behalf of the corporate debtor all deeds, receipts, and other documents.
5. The interim resolution professional shall have the authority to access the electronic records of corporate debtor from information utility having financial information of the corporate debtor and be responsible for complying with the requirements under any law for the time being in force on behalf of the corporate debtor.

Duties of Interim Resolution Professional

1. Under section 18 of IBC, an interim resolution professional shall collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate debtor, including information relating to business operations for the previous two years, financial and operational payments for the previous two years, list of assets and liabilities as on the initiation date and such other matters as may be specified.
2. He shall receive and collate all the claims submitted by creditors to him, pursuant to the public announcement made under sections 13 and 15 of IBC.
3. He shall constitute a committee of creditors and monitor the assets of the corporate debtor and manage its operations until a resolution professional is appointed by the committee of creditors.
4. He shall file information collected with the information utility, andtake control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership. Such assets are inclusive of–

• • 1. Assets over which the corporate debtor has ownership rights which may be located in a foreign country,
    2. Assets that may or may not be in possession of the corporate debtor,
    3. Tangible assets, whether movable or immovable,
    4. Intangible assets including intellectual property,
    5. Securities including shares held in any subsidiary of the corporate debtor, financial instruments, insurance policies;assets subject to the determination of ownership by a court or authority.

Disclaimer – The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinion before relying upon the article. For more information, please contact us at rera@centrik.in

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