Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) Guidelines, 2021
The above Guidelines shall come into effect for appointments as IRP, Liquidator, RP and BT with effect from July 1, 2021. These Guidelines have been issued in supersession of the earlier Guidelines [Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustee (Recommendation) (Second) Guidelines, 2020] issued on November 23, 2020.
The Insolvency and Bankruptcy Board of India (Board) is required under the Insolvency and Bankruptcy Code, 2016 (Code) to recommend name of an Insolvency Professional (IP) for appointment as Interim Resolution Professional (IRP) or Liquidator
The Board has been making available Panels of IPs to the Adjudicating Authority (AA) for appointment as IRP or Liquidator, as the case may be. Such Panels in advance by the Board has been found useful as observed by the AA and NCLAT
Further, the Board is also required under the Code to recommend the name of an IP for appointment as resolution professional (RP) or bankruptcy trustee (BT)
However, at the time of reference/ directions received from the AA, the Board does not have information about the volume, nature and complexity of an insolvency or bankruptcy process and the resources available at the disposal of an IP. In such a situation, the Board is unlikely to add much value by recommending an IP for the process. Further, it takes some time for a reference or a direction from the AA to reach the Board. The Board may take up to ten days to identify an IP for the purpose. It also takes some time for the recommendation of the Board to reach the AA, after which the AA could appoint the recommended IP. The process of appointment may entail 2-3 weeks, which could be saved if the AA has a ready Panel of IPs recommended by the Board and it can pick up any name from the Panel for appointment while issuing the Order itself.
Since, every IP is equally qualified to be appointed as the IRP, Liquidator, RP or BT of any corporate or individual insolvency resolution, liquidation or bankruptcy process, as the case may be, if otherwise not disqualified, and in the interest of avoiding abcaus.in administrative delays, the Board considers necessary to have the following guidelines to prepare a Panel of IPs for the purpose of section 16(4), 34(6), 97(4), 98(3), 125(4), 146(3) and 147(3).
Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) Guidelines, 2021
Panel of IPs
1. The Board will prepare a common Panel of IPs for appointment as IRP, Liquidator, RP and BTand share the same with the AA (Hon’ble NCLT and Hon’ble DRT) in accordance with these Guidelines.
2. The Panel will have Zone wise list of IPs based on the registered office (address as registered with the Board) of the IP.
3. The Panel will have validity of six months and a new Panel will replace the earlier Panel every six For example, the first Panel under these Guidelines will be valid for appointments during July – December 2021, and the next Panel will be valid for appointments during January – June 2022, and so on.
4. The NCLT may pick up any name from the Panel for appointment of IRP, Liquidator, RP or BT, for a CIRP, Liquidation Process, Insolvency Resolution or Bankruptcy Process relating to a corporate debtors and personal guarantors to corporate debtors, as the case may be.
5. The DRT may pick up any name from the Panel for appointment as RP or BT, for an Insolvency Resolution or Bankruptcy Process for personal guarantors to corporate debtors, as the case may be
Inclusion of IPs in the Panel
An IP will be eligible to be in the Panel of IPs, if –
(a) there is no disciplinary proceeding, whether initiated by the Board or the IPA of which he is amember, pending against him;
(b) he has not been convicted at any time in the last three years by a court of competent jurisdiction;
(c) he expresses his interest to be included in the Panel for the relevant period;
(d) he undertakes to discharge the responsibility as IRP, Liquidator, RP or BT, as he may be appointed by the AA;
(e) he holds an Authorisation for Assignment (AFA), which is valid till the validity of Panel. For example, the IP included in the Panel for appointments during July – December 31, 2021 should have AFA valid up to December 31, 2021.
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.
Expression of Interest
The Board shall invite expression of interest from IPs in Form A by sending an e-mail to them at their email addresses registered with the Board. The expression of interest must be received by the Board in Form A by the specified date. For example, the Board shall invite expression of interest by June 5, 2021 from IPs for inclusion in the Panel for July 1, 2021 to December 31, 2021. The IPs shall express their interest by June 20, 2021. The Board will send the Panel to the AA by June 27, 2021. This process will be repeated during December, 2021 for the next Panel.
Ongoing Assignments
The eligible IPs will be included in the Panel in the order of the volume of ongoing processes they have in ha The IP who has the lowest volume of ongoing processes will get a score of 100 and will be at the top of the Panel. The IP who has the highest volume of ongoing processes will get a score of 0. The difference between the highest volume and the lowest volume will be equated to 100and other IPs will get scores between 0 and 100 depending on volume of their ongoing assignments.
Obligations of IPs in the Panel
It must be explicitly understood that an IP, who is included in the Panel based on his expression of interest, shall not:
- withdraw his interest to act as IRP, Liquidator, RP or BT, as the case may be;
- decline to act as IRPs, Liquidator, RP or BT, as the case may be, if appointed by the AA; or
- surrender his registration to the Board or membership or AFA to his IPA during the validity of the Panel
It must be explicitly understood that:
- the AA may require the Board to recommend an IP from or outside the Panel and in such cases, the Board shall accordingly recommend an IP;
- an IP in the Panel can be appointed as IRP, Liquidator, RP or BT, at the sole discretion of the AA;
- 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;
- an IP who declines to act as IRP, Liquidator, RP or BT, as the case may be, on being appointed by the AA, shall not be included in the Panel for the next five years, without prejudice to any other action that may be taken by the Board
Download Guidelines Click Here >>
- TDS deductors given relief for non deduction of TDS at higher rate for inoperative PANs
- Reassessment order quashed due to error in personal hearing video conferencing link
- Assessee may show that it was over assessed under erroneous impression of law
- Education Cess cannot be allowed as an expenditure in view of later amendment – SC
- Cash deposit cannot be shifted from live person to a deceased just because he was joint holder
 Guidelines 2021){kind=link}