Insolvency and Bankruptcy Code has defined a person of special qualification that makes him an imperative part of whole procedure of Corporate Insolvency Resolution Process.
In this article we will elaborately discuss about an Interim resolution professional, his duties, eligibility and other aspects.
Who is an Interim Resolution Professional?
Interim Resolution Professional means an insolvency professional appointed to conduct the corporate insolvency process and includes a ‘resolution professional’ as per Section 5(27) of Insolvency Code, 2016. He should be enrolled under section 206 of Insolvency Code, 2016 with an insolvency professional agency as its member and registered with the Board (IBBI) as an insolvency professional under section 207 of insolvency Code, 2016- section 3(19) of Insolvency Code, 2016.
Eligibility for appointment as resolution professional
Eligibility of criteria for appointment a person as insolvency professional are specified in Regulation 3 of Insolvency and bankruptcy Board of India. He should not be related party or employee. He shall fulfil criteria for appointment as independent director. He should make closures as specified in Code of conduct. The insolvency professional shall have access to books as specified in Regulation 4 of Insolvency and Bankruptcy Board of India.
Duties and Powers of Interim Resolution Professional
The interim resolution professional, may from the insolvency commencement date, require the following persons to report to, take instructions from and extend all cooperation to him, in all matters arising from and in connection with the terms of their engagement with the corporate debtor:
(a)the board of directors, promoters and the members and partners of the corporate debtor, the personnel, the officers and managers, and any other person associated with the management of the business and operations of the corporate debtor;
(b) The auditors and other professional advisors, if any, of the corporate debtor; and
(c) The financial institutions maintaining the accounts of the corporate debtor.
In addition to above, the interim resolution professional shall have the authority to access the books of account, records and other relevant documents and information of the corporate debtor held with:
(a) Any depositories of securities;
(b) Professional advisors of the corporate debtor;
(c) Information utilities;
(d) Any other registry that records the ownership of assets;
(e) Members, promoters, partners, board of directors and joint venture partners of the corporate debtor; and
(f) Contractual counterparties of the corporate debtor. The Interim Insolvency Professional shall also appoint two registered values to calculate the liquidation value of the corporate debtor in accordance with Regulations.
Insolvency Code has specifically ensured to mention about a professional who is supposed to be enrolled with the insolvency agency. The idea is similar to appointing a receiver in the matters of Banks and NBFCs to attend the process of insolvency or attachment of property in case of Banks & NBFCs. It is important to have a professional to overlook into the cases of insolvency while the CIRP is going on to maintain fairness in the process and parties do not feel cheated.
Disclaimer – the above summary is based on the personal interpretation of the revised regulations, which may differ person to person. Hence, the readers are expected to take expert opinion before placing reliance on this article.