IBBI Releases 2024 Guidelines for Insolvency Professionals

The Insolvency and Bankruptcy Board of India (IBBI) issued the Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals, and Bankruptcy Trustees (Recommendation) (Second) Guidelines, 2024 on December 2, 2024. These guidelines outline procedures for preparing a panel of Insolvency Professionals (IPs) for appointments by the National Company Law Tribunal (NCLT) and Debt Recovery Tribunal (DRT). Effective from January 1 to June 30, 2025, the guidelines aim to streamline the selection process and reduce administrative delays.

Eligibility criteria for IPs include no pending disciplinary actions, a clean conviction record in the past three years, valid Authorization for Assignment (AFA), and submission of an expression of interest in Form A. The IBBI will prepare a zone-wise panel based on IPs’ registered offices and their experience in completed assignments under the Insolvency and Bankruptcy Code. The panel will also consider the IP’s expertise in specific sectors.

The guidelines emphasize that IPs included in the panel must accept appointments unless justified otherwise. Failure to comply may result in removal from the panel for six months. These guidelines replace the previous ones issued in June 2024, ensuring alignment with procedural updates.

This initiative reinforces the commitment to maintaining efficiency and transparency in insolvency resolution processes.

******

Insolvency and Bankruptcy Board of India
(New Delhi)

The Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) (Second) Guidelines, 2024 issued on December 02, 2024.

December 02, 2024

Introduction

The Insolvency and Bankruptcy Board of India (“the Board”) is required to recommend the name of an Insolvency Professional (IP) on receiving reference from the National Company Law Tribunal and Debt Recovery Tribunal (Adjudicating Authority), in respect of the Corporate Insolvency or Individual Insolvency, as the case may be, for appointment as an Interim Resolution Professional (IRP), Resolution Professional (RP), Liquidator and Bankruptcy Trustee (BT) under Sections 16(4), 34(6), 97(4), 98(3), 125(4), 146(3), 147(3) of the Insolvency and Bankruptcy Code, 2016 (“Code”). Further, Rule 8(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 and Rule 8(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtors) Rules, 2019 enables the Board to share a Panel of IPs, who may be appointed as resolution professionals or bankruptcy trustee, with the Adjudicating Authority.

2. The need was felt to prepare the panel of IPs in advance and share with the Adjudicating Authority (AA) to avoid administrative delays in appointment of the IP. These guidelines provide the procedure for preparing panel of Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees.

1. Short title and commencement. (1) These guidelines may be called the Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) (Second) Guidelines, 2024.

(2) The panel of IPs prepared as per these guidelines will be effective from 1 January 2025 to 30 June 2025.

2. Eligibility of IPs. An IP is eligible to be included in the panel, if ―

a. there is no disciplinary proceeding, whether initiated by the Board or the IPA, pending against IP;

b. IP has not been convicted at any time in the last three years by a court of competent jurisdiction;

c. IP has submitted expression of interest along with consent to act as Interim Resolution
Professional, Resolution Professional, Liquidator and Bankruptcy Trustee, for appointment by the National Company Law Tribunal and Debt Recovery Tribunal;

d. IP holds an Authorisation for Assignment (AFA), which is valid till the validity of Panel. For example, the IP included in the Panel for appointment during January 01 – June 30, 2025, should have AFA valid for the period of the entire panel, ie., June 30, 2025, and beyond.

3. Expression of Interest. (1) The Board shall invite expression of interest from IPs in Form A by sending an e-mail to their email addresses registered with the Board. The expression of interest must be received by the Board in Form A by the specified date.

(2) 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.

(3) The IPs can submit their expression of interest by December 22, 2024. The Board will send the Panel to the AA by December 31, 2024.

(4) IPs are also required to select the Sectors in which they have handled assignments or are handling assignments under the Code. The name of the Sectors is to be chosen from the drop-down list mentioned in the Form. If the IP selects the option ‘Others’, he must mention the name of the sector.

4. Panel of IPs. (1) The Board will prepare a common Panel of IPs for appointment as IRP, Liquidator, RP and BT and share the same with the AA (Hon’ble NCLT and Hon’ble DRT) in accordance with these Guidelines. The Panel will have validity of six months.

(2) The Panel will have a Zone wise list for individual IPs based on the registered office (address as registered with the Board) of the IP. List of Zones is given in Annexure-1. The panel of IPE as IP will be valid across all NCLT benches.

(3) The AA may pick up any name from the Panel for appointment of IRP, Liquidator, RP or BT, for a CIRP, Liquidation Process, Insolvency Resolution process or Bankruptcy Process relating to a corporate debtor and personal guarantor to corporate debtor, as the case may be.

5. Sorting criteria. (1) In order to achieve the objectives of the Code it is imperative to give due consideration to the experience gained by IP in handling assignments of liquidation and corporate insolvency resolution process under the Code. Accordingly, the eligible IPs will be included in the Panel in the order of the volume of completed assignments in the order of experience.

(2) Where two or more IPs get the same score, they will be placed in the Panel in the order of date of their registration with the Board. The IP registered earlier will be placed above the IP registered later.

6. Conditions for IPs. (1) The inclusion of the name of the IP in the panel will be deemed acceptance to act as IRPs, Liquidator, RP or BT, as the case may be, on being appointed by the National Company Law Tribunal or the Debt Recovery Tribunal, as the case may be.

(2) The IPs will not withdraw their consent or refuse to accept the appointment unless otherwise permitted by the National Company Law Tribunal or Debt Recovery Tribunal or the Insolvency and Bankruptcy Board of India, in accordance with the law. Any refusal to act as IRP, Liquidator, RP or BT, as the case may be, on being appointed by the AA, without sufficient justification, will be treated as deviation from consent and name will be removed from panel for six months.

(3) It is desired that the IP will not surrender his registration to the Board or membership or Authorization for Assignment during the validity period of the panel.

(4) The AA may appoint the IP from the Panel to act as IRP, Liquidator, RP or BT, at their own discretion.

(5) The AA may refer to or direct the Board for the appointment of IP including the recommendation of IP, from or outside the Panel and in such cases, the Board may accordingly take suitable action for the appointment of IP, from or outside the panel.

7. Repeal and Savings. (1) The Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) Guidelines, 2024 issued on June 05, 2024, is hereby repealed as on the date of coming into effect of these guidelines and all actions taken under the repealed guidelines is saved.

****

Form A
EXPRESSION OF INTEREST TO ACT AS
AN IRP, LIQUIDATOR, RP AND BT IN ANY PROCESS RELATING
TO ANY CORPORATE OR INDIVIDUAL DEBTOR

*CIR Process shall include Pre-packaged Insolvency Resolution Process

Declaration
I/We hereby: –

a. confirm and declare that the information given herein above is true and correct to the best of my/our knowledge and belief, and express my interest to act as IRP, Liquidator, RP and BT, as the case may be, if appointed by the Adjudicating Authority.

b. undertake that if my/our name is included in the Panel, I/we shall abide by the Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) (Second) Guidelines, 2024.

Signature of Insolvency
Professional/Authorised
Signatory

Place:
Date:

Annexure-1

An IP will be included in the Panel against the Zone where his registered office (his address as registered with the Board) is located. For example, an IP located in the city of Surat (Gujarat) will be included in Ahmedabad Zone, which covers the State of Gujarat. He shall be eligible for appointment by any bench of NCLT or DRT located in the State of Gujarat, Union Territory of Dadra and Nagar Haveli, and Union Territory of Daman and Diu. However, the zone criteria is not applicable to IPE as IP. The areas covered in different Zones, other than for IPE as IP are as under: