CS Shikha Rai
Insolvency and Bankruptcy Board of India (IBB) on May 31st, 2018 issued Insolvency Professionals to act as Interim Resolution Professionals or Liquidators (Recommendation) Guidelines, 2018 to streamline the procedure for recommendation and appointment of Interim Resolution Professional (IRP) or liquidator.
In situation where an application is made by operational credit or to Adjudicating Authority (AA)for Corporate Insolvency Resolution Process (CIRP) and has not proposed any IRP, the AA makes reference to IBBI to recommend Insolvency Professional to act as IRP under Section 16 (3) (a) of Insolvency and Bankruptcy Code, 2016. Similarly, Section 34(4) of the Code requires the AA to replace the resolution professional, in such cases, the AA may direct the Board under section 34(5) of the Code to propose the name of another IP to be appointed as a liquidator. The Board is required under section 34(6) to propose the name of another IP within ten days of the direction issued by the AA.
In such cases, the Board has no information about the volume, nature and complexity of the CIRP or Liquidation Process and the resources available at the disposal of an IP because of which the Board is unlikely to add much value by recommending an IP for a CIRP / Liquidation. Further, it takes some time for a reference or a direction from the AA to reach the Board. Thereafter, the Board is permitted to take up to ten days to identify an IP for the purpose. The Board used to invite expression of interest from eligible IPs and had an internal committee to appraise interests to identify an IP for recommendation to the AA. It takes some time also for the recommendation of the Board to reach the AA, after which the AA can appoint the recommended IP.
Keeping in view such jam, the IBBI will prepare a Panel of IPs for appointment as IRP or Liquidator and share the said Panel with AA. The AA may pick up any name from the Panel for appointment of IRP or Liquidator for a CIRP or Liquidation, as the case may be.
Following are some major highlights of aforesaid guideline:
|IRP of a Corporate Insolvency Resolution Proces||05|
|RP of a Corporate Insolvency Resolution Process||10|
|IRP of a Fast Track Process||03|
|RP of a Fast Track Process||06|
|Liquidation / Voluntary Liquidation||05|
This is surely a genial move by IBBI to simplify the process of recommendation and appointment of IRP.
(Author is partner with Mamta Binani and Associates and can be reached at Contact No: 8420508582 and Email id: [email protected])