When the National Company Law Tribunal admits a corporate insolvency resolution process, the company's board does not merely lose a vote or a veto — it is displaced altogether, and the management of a living enterprise passes into the hands of a single licensed insolvency professional. That person is, first, the interim resolution professional (IRP) appointed under Section 16, and then, after the committee of creditors has assembled, the resolution professional (RP) appointed or confirmed under Section 22. The IRP and RP are the human machinery of the Code: they take custody of assets, collate the claims that build the committee of creditors, run the company as a going concern, invite and examine resolution plans, and chase down suspect transactions. Yet for all that power, the Supreme Court has been emphatic that the resolution professional is a facilitator, not an adjudicator, and that the commercial decision belongs to the creditors. This article traces the appointment, tenure, powers, duties and replacement of the IRP and RP, and the line of authority from Innoventive Industries and Swiss Ribbons to Essar Steel, Gujarat Urja and Embassy Property that fixes the limits of the office.
Two Offices in One Process
The Code does not contemplate a single, continuous officer running the corporate insolvency resolution process (CIRP) from start to finish. It deliberately splits the function into two phases. The interim resolution professional is appointed by the Adjudicating Authority the instant CIRP is admitted, and holds office only until the creditors have organised themselves. The resolution professional is then appointed by the committee of creditors (CoC) at its first meeting, either by confirming the incumbent IRP or by replacing him. The distinction matters because the IRP is a creature of the Tribunal's order, owing his appointment to the applicant's nomination, whereas the RP is a creature of the creditors' commercial choice, owing his continuance to a sixty-six per cent vote.
Both offices can be held only by a licensed insolvency professional registered with the Insolvency and Bankruptcy Board of India (IBBI) and enrolled with an insolvency professional agency. The eligibility, registration and conduct of these professionals is built on the statutory definitions in the Code, and the whole apparatus exists to serve the object and scheme of the Code — a time-bound, creditor-driven rescue of viable enterprises with a clean exit through liquidation only as a last resort. The professional sits at the centre of that design, and a precise understanding of when each office begins and ends is the foundation for everything that follows.
Appointment of the IRP: Section 16
Section 16(1) commands that the Adjudicating Authority shall appoint an interim resolution professional on the insolvency commencement date — that is, the date on which CIRP is admitted under Section 7, 9 or 10. The appointment is not deferred; it is simultaneous with admission, because the company cannot be left rudderless for a moment once its board is to be suspended.
Who is appointed depends on which doorway was used. Where the application was filed by a financial creditor under Section 7 or by the corporate debtor under Section 10, Section 16(2) provides that the very professional proposed in that application shall be appointed as the IRP, provided no disciplinary proceeding is pending against him. The applicant therefore effectively names the first officer, which is one reason the route open to a financial creditor carries such leverage — a point developed in our note on initiation of CIRP by a financial creditor. Where the application was filed by an operational creditor under Section 9, the position differs: Section 16(3) requires that if the operational creditor has proposed an IRP, that person is appointed (again, absent pending discipline), but if no IRP has been proposed, the Adjudicating Authority makes a reference to the Board, which under Section 16(4) must recommend an insolvency professional within ten days. The contrast with the operational-creditor entry point is examined in initiation of CIRP by an operational creditor.
As to tenure, Section 16(5) — as it now stands after the 2018 amendment — provides that the term of the interim resolution professional shall continue till the date of appointment of the resolution professional under Section 22. The earlier text had capped the IRP's term at thirty days, but the amendment removed that rigid ceiling, recognising that the constitution of the committee of creditors and the holding of its first meeting often takes longer than thirty days. The IRP therefore continues seamlessly until the RP is in place, avoiding any vacuum in management.
Management Vests in the IRP: Section 17
The single most dramatic consequence of admission is worked by Section 17. From the date of appointment of the interim resolution professional, the management of the affairs of the corporate debtor vests in him; the powers of the board of directors or the partners of the corporate debtor stand suspended and are exercised by the IRP. The officers and managers of the company are to report to the IRP, and the financial institutions maintaining the company's accounts must act on his instructions. This is the displacement of incumbent management that gives a CIRP admission its force.
The Supreme Court underscored this effect in Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407, the first decision interpreting the Code, where Nariman J. described how, on admission, the management of the corporate debtor vests in the interim resolution professional and the erstwhile management is displaced. The suspension is not a forfeiture of office in the company-law sense — the directors remain directors — but their powers are frozen and transferred to the professional for the duration of the process. The board does not regain its powers unless and until CIRP is set aside, a resolution plan is approved (which may itself reconstitute management), or the company exits the process. The management vesting in the IRP runs in parallel with the moratorium under Section 14, which freezes suits, asset transfers and the enforcement of security, so that the professional takes charge of a protected estate.
Duties of the IRP: Section 18
Section 18 catalogues the duties of the interim resolution professional, and they are essentially fact-gathering and custodial. The IRP must collect all information relating to the assets, finances and operations of the corporate debtor — including the business operations for the previous two years, the financial and operational payments, the list of assets and liabilities, and the like — for determining the financial position of the company. He must receive and collate all the claims submitted by creditors pursuant to the public announcement, monitor the assets of the corporate debtor, and take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet, in the records of an information utility, or with any registration authority.
An explanation to Section 18 carves out an important limit: the assets of which the IRP takes custody do not include the assets of any Indian or foreign subsidiary of the corporate debtor, nor assets held under trust or under contractual arrangements including bailment. The IRP cannot, in other words, sweep in property that does not beneficially belong to the corporate debtor. The combined effect of Sections 18 and 25 is that the professional becomes the single point of information and control: every creditor's claim, every asset and every record is funnelled through his office, which is what allows the committee of creditors to be constituted on a reliable basis.
Public Announcement and Collation of Claims
Once appointed, the interim resolution professional must, under Section 13 read with Section 15, make a public announcement of the initiation of CIRP and call upon creditors to submit their claims. Section 15 requires the announcement to state the last date for submission of claims, the details of the IRP, the penalties for false claims, and the like; in practice it is published in newspapers and on the IBBI website. The announcement is the gateway through which the universe of creditors is identified.
The IRP then collates and verifies the claims received. This collation is not a mere clerical exercise — it determines who will sit on the committee of creditors and with what voting share. The professional must categorise creditors as financial or operational, value their claims, and resolve obvious disputes, though a serious contest over the existence or quantum of a claim may have to be left to adjudication. The accuracy of this stage is critical, because a creditor wrongly excluded or under-counted is denied its statutory voice. The careful machinery of admission that precedes all this — the debt-and-default test and the fourteen-day window — is set out in our notes on the entry points, and the announcement is the first public act of the process the creditor has triggered.
Constituting the Committee of Creditors: Section 21
Section 21 makes the constitution of the committee of creditors the pivotal function bridging the two offices. After the collation of all claims received against the corporate debtor and the determination of its financial position, the interim resolution professional shall constitute a committee of creditors comprising all the financial creditors of the corporate debtor. Related-party financial creditors are, as a rule, excluded from the committee — they have no right to representation, participation or voting in respect of a financial debt owed to a related party. Where the corporate debtor has no financial creditors at all, the committee is constituted of the operational creditors in the manner prescribed by regulation.
Having constituted the committee, the IRP must convene its first meeting within seven days, under Section 22(1). The constitution of the CoC is therefore the IRP's terminal duty — it is the act that hands the steering of the process to the creditors and sets the stage for the appointment of the resolution professional. From this point, the commercial direction of the CIRP belongs to the committee, and the professional becomes its instrument rather than the Tribunal's appointee.
Appointment of the RP: Section 22
Section 22 governs the transition from IRP to RP. At its first meeting, the committee of creditors must, by a majority vote of not less than sixty-six per cent of the voting share of the financial creditors, either resolve to appoint the interim resolution professional as the resolution professional, or to replace him with another resolution professional. The choice is wholly the committee's — it may retain the incumbent or bring in someone of its own choosing.
Where the committee resolves to continue the IRP as RP, Section 22(3)(a) requires his written consent in the prescribed form. Where it resolves to replace him, Section 22(3)(b) requires it to file an application before the Adjudicating Authority for the appointment of the proposed resolution professional, along with that person's written consent. Section 22(4) then provides that the Adjudicating Authority shall forward the proposed name to the Board for confirmation and shall make the appointment after the Board confirms it. Section 22(5) supplies a fail-safe: if the Board does not confirm the proposed name within ten days, the Adjudicating Authority shall direct the interim resolution professional to continue to function as the resolution professional until the Board confirms the appointment. The design ensures there is never a gap in office, and that the eventual RP is both the creditors' choice and a professional vetted by the regulator.
The RP Conducts the Process: Sections 23 and 25
Section 23 places the conduct of the entire corporate insolvency resolution process and the management of the operations of the corporate debtor during CIRP in the hands of the resolution professional. He exercises the powers and discharges the duties that were vested in the interim resolution professional under Sections 18 to 23, and the management vesting and board-suspension worked by Section 17 continue to apply to him. In effect, the RP steps into the IRP's shoes and carries the company forward as a going concern until a resolution plan is approved or liquidation is ordered.
Section 25 enumerates the duties of the resolution professional to preserve and protect the assets of the corporate debtor, including the continued running of its business. These duties include taking immediate custody and control of all the assets, representing the corporate debtor in judicial, quasi-judicial and arbitration proceedings, raising interim finance with the committee's approval, appointing accountants, legal and other professionals, maintaining an updated list of claims, convening and attending all meetings of the committee of creditors, preparing the information memorandum, and — importantly — inviting prospective resolution applicants to submit resolution plans and presenting all plans that conform to the Code to the committee for its approval. The RP is thus simultaneously a custodian, a manager, a litigant, an information officer and the gatekeeper of resolution plans.
Facilitator, Not Adjudicator: Swiss Ribbons
A persistent constitutional anxiety about the Code was that it vested too much unchecked power in a private professional. The Supreme Court laid that fear to rest in Swiss Ribbons (P) Ltd. v. Union of India, (2019) 4 SCC 17. Upholding the validity of the Code, the Court held that the resolution professional has no adjudicatory or quasi-judicial powers; he is merely a facilitator of the resolution process, whose administrative functions are subject to the supervision of the committee of creditors and, ultimately, the Adjudicating Authority. The Court contrasted the RP's role with that of a liquidator under the earlier company-law regime, who did exercise quasi-judicial functions, and emphasised that under the IBC every material decision — whether to admit or reject a claim, whether to approve a plan — is either taken by the committee of creditors in its commercial wisdom or is subject to the Tribunal's approval.
The practical importance of this characterisation is that an aggrieved creditor whose claim the RP has rejected or under-valued is not bound by the RP's view as if it were a judgment; the decision can be carried to the Adjudicating Authority. The RP collates and verifies, but he does not finally adjudicate disputed questions of right. This is the conceptual cornerstone for understanding the limits of the office, and it is a favourite proposition for examiners testing whether a student appreciates that the professional administers, while the creditors and the Tribunal decide.
The RP and the Primacy of the CoC: Essar Steel
If Swiss Ribbons fixed what the RP is not, the line of authority culminating in Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, (2020) 8 SCC 531, fixed the relationship between the RP, the committee and the Tribunal. The Court held that the commercial wisdom of the committee of creditors in approving or rejecting a resolution plan is paramount and is not justiciable on its merits; neither the Adjudicating Authority nor the Appellate Tribunal may sit in appeal over the business decision of the creditors. The role of the resolution professional in this scheme is confirmatory and procedural — he must ensure that each resolution plan placed before the committee conforms to the requirements of Section 30(2), and confirm such conformity, but he does not himself approve or reject a plan on commercial grounds.
The Court was careful, however, to mark the outer boundary of commercial wisdom: the committee cannot act in a manner that leaves operational creditors with nothing, and a plan must deal with them fairly and equitably. The judgment also clarified that the RP is to confine himself to examining whether a plan provides for the matters listed in Section 30(2), and is not to substitute his own commercial judgment for that of the committee. Read with Swiss Ribbons, the upshot is a tripartite division of labour: the RP facilitates and verifies, the committee decides in its commercial wisdom, and the Adjudicating Authority confines its scrutiny to legality and statutory compliance.
The RP in Litigation and the NCLT's Residuary Jurisdiction
Because Section 25(2)(b) requires the resolution professional to represent and act on behalf of the corporate debtor in all judicial, quasi-judicial and arbitration proceedings, the RP frequently finds himself defending the company's contractual and statutory relationships during CIRP. The leading authority is Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta, (2021) 7 SCC 209, where the resolution professional resisted the termination of a power purchase agreement that the counterparty sought to invoke solely because CIRP had commenced. The Supreme Court, speaking through Chandrachud J., held that the Adjudicating Authority has residuary jurisdiction under Section 60(5)(c) to adjudicate questions of law or fact arising out of or in relation to the insolvency resolution of the corporate debtor, and that an ipso facto clause permitting termination merely on the ground of insolvency could be restrained where the agreement was central to the survival of the corporate debtor as a going concern. The decision both empowers the RP to protect the debtor's vital contracts and locates the forum — the NCLT — in which he may do so.
That jurisdiction is, however, bounded. In Embassy Property Developments (P) Ltd. v. State of Karnataka, (2020) 13 SCC 308, the Supreme Court held that the NCLT and NCLAT cannot, in CIRP proceedings, adjudicate matters falling in the public law domain — there, the refusal of a State Government to extend a mining lease under the Mines and Minerals (Development and Regulation) Act, 1957. The Court reasoned that the NCLT is a quasi-judicial body created by statute and cannot be elevated to the status of a superior court exercising judicial review over administrative action. The resolution professional, therefore, cannot use the residuary jurisdiction to compel public authorities to act in the debtor's favour where the dispute is genuinely one of public law; such grievances belong before the constitutional courts.
Avoidance Applications and the RP's Continuing Role
Among the RP's most consequential duties is the obligation under Sections 43 to 51 to scrutinise the corporate debtor's past transactions and apply to the Adjudicating Authority to avoid those that are preferential, undervalued, extortionate or made with intent to defraud creditors. The professional must form an opinion, determine and apply, examining transactions during the relevant look-back period and seeking to claw back value for the creditors. This is a distinctly forensic function, and it is one of the few in which the RP actively initiates adjudication rather than merely facilitating.
A vexed question was whether such avoidance applications survive the conclusion of CIRP — for instance, where a resolution plan is approved before the application is decided. In Tata Steel BSL Ltd. v. Venus Recruiters (P) Ltd., the Division Bench of the Delhi High Court (2023:DHC:257-DB) held that an avoidance application does not die with the completion of the CIRP and that the resolution professional does not become functus officio for the limited purpose of pursuing it; the NCLT may continue to hear and adjudicate avoidance applications even after the resolution plan has been approved, where the benefit of those transactions has not been accounted for in the plan. The decision preserves the integrity of the clawback remedy and confirms that the professional's stewardship of avoidance proceedings can outlast his other functions, ensuring that fraudulent or preferential transactions are not insulated merely by the timing of plan approval.
Replacement, Removal and Accountability
The Code keeps the resolution professional firmly accountable. The committee of creditors may, under Section 27, at any time during CIRP, by a sixty-six per cent vote, resolve to replace the resolution professional with another, applying to the Adjudicating Authority and the Board in the same manner as for the original appointment. The RP thus serves at the pleasure of the committee and may be displaced if the creditors lose confidence in him. Beyond replacement, the professional is subject to the disciplinary jurisdiction of the IBBI and his insolvency professional agency, and to the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, which prescribe a detailed code of conduct.
The Adjudicating Authority, too, supervises the professional. It may, on the application of the committee or otherwise, address misconduct, and it confirms or declines the appointment of a replacement. The professional owes a duty of independence and impartiality, and conflicts of interest must be disclosed. The cumulative effect of Sections 22, 27 and the regulatory framework is that the IRP and RP, though wielding the powers of the suspended board, are hemmed in by three layers of control — the commercial control of the committee, the regulatory control of the IBBI, and the supervisory control of the Tribunal. For a wider view of how the professional's office connects to the rest of the Code's architecture, return to the IBC notes hub.
Frequently asked questions
What is the difference between an interim resolution professional and a resolution professional?
The interim resolution professional (IRP) is appointed by the Adjudicating Authority under Section 16 on the insolvency commencement date, usually on the applicant's nomination, and his term continues until the resolution professional is appointed. The resolution professional (RP) is appointed by the committee of creditors at its first meeting under Section 22, by a sixty-six per cent vote, either by confirming the IRP or by replacing him. The IRP's principal task is to take custody, collate claims and constitute the committee; the RP then conducts the entire CIRP under Section 23.
What voting majority is needed to appoint or replace the resolution professional?
Under Section 22(2), the committee of creditors must, at its first meeting, decide by a majority vote of not less than sixty-six per cent of the voting share of the financial creditors whether to confirm the IRP as RP or to replace him. The same sixty-six per cent threshold applies to a later replacement of the RP under Section 27. Where the committee proposes a new name, the Adjudicating Authority forwards it to the IBBI for confirmation before making the appointment.
Does the board of directors lose its powers when an IRP is appointed?
Yes. Section 17 provides that from the date of appointment of the interim resolution professional, the management of the affairs of the corporate debtor vests in him and the powers of the board of directors stand suspended, to be exercised by the IRP. This was affirmed in Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407. The directors are not removed in the company-law sense, but their powers are frozen and transferred to the professional for the duration of CIRP.
Does the resolution professional have adjudicatory or judicial powers?
No. In Swiss Ribbons (P) Ltd. v. Union of India, (2019) 4 SCC 17, the Supreme Court held that the resolution professional has no quasi-judicial or adjudicatory powers and is merely a facilitator of the resolution process whose administrative functions are subject to the supervision of the committee of creditors and the Adjudicating Authority. A creditor aggrieved by the RP's verification of a claim may carry the dispute to the Tribunal; the RP does not finally adjudicate disputed rights.
Can the resolution professional decide whether to approve a resolution plan?
No. Under Section 30(2) the RP must only confirm that each resolution plan conforms to the statutory requirements and present conforming plans to the committee of creditors. The decision to approve or reject a plan is the commercial wisdom of the committee, which is paramount and non-justiciable on its merits, as held in Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, (2020) 8 SCC 531. The RP facilitates and verifies; he does not exercise commercial judgment over plans.
Can the resolution professional pursue avoidance applications after CIRP ends?
Yes. Under Sections 43 to 51 the RP must identify and seek to avoid preferential, undervalued, extortionate or fraudulent transactions. In Tata Steel BSL Ltd. v. Venus Recruiters (P) Ltd. (Delhi High Court Division Bench, 2023), it was held that an avoidance application does not die with the completion of CIRP and the RP is not functus officio for that limited purpose; the NCLT may continue to adjudicate such applications even after a resolution plan is approved, where the benefit of those transactions is not accounted for in the plan.