Insolvency regulator IBBI has come up with a novel approach that will help speed up the appointment of interim resolution professionals (IRP), resolution professionals (RP), or liquidators by the National Company Law Tribunal (NCLT) under various scenarios of the Insolvency and Bankruptcy Code (IBC).
The IBBI’s new guidelines provide for preparation of a common panel of qualified IRP, RP, and liquidators from which the adjudicating authority (AA) can readily select and make appointments. The panel will have a zone-wise list of IPs (insolvency professional) based an the registered office (address as registered with the Board) of the IP.
This would mean the NCLT or a debt recovery tribunal (DRT) as the AA would be able to appoint a resolution professional without having to make reference to the IBBI and wait for its recommendation.
The earlier process of the AA making a reference to the IBBI, the Board making a recommendation to the AA, and then the appointment of the IP was time-consuming and lasted two to three weeks.
This time is now sought to be saved by making available a ready panel of IPs recommended by the Board so that the AA can pick up any name from the panel for appointment while issuing the order.
Ruby Singh Ahuja, senior partner at Karanjawala & Co, a law firm, said the new guidelines certainly bring a time-efficient approach to the process of appointment of a resolution professional who plays a vital role in the resolution process under the IBC.
“It is commendable that IBBI, from time to time, is taking steps to make the process envisaged under the code more effective and aimed at speedy resolution,” she said.
Sushmita Gandhi, partner at IndusLaw, said the IBC envisages certain scenarios where the IBBI needs to recommend the names of IRP, RP, and liquidators to be appointed by the adjudicating authority. This would entail a time period of around two to three weeks as the adjudicating authority seek recommendations from the IBBI and then make appointments. The new guidelines have been introduced to improve the time-efficiency of the process in such appointments, she said.
Pritika Kumar, founder and entinel counsel, Cornellia Chambers, said the guidelines will help accelerate the selection process as the NCLT can pick any name from the panel and each such insolvency professional would be deemed to have been recommended by the Board.
The recent guidelines are effective from January 1, 2022, for inclusion in a panel till June 30, 2022.