Section 16: Appointment and Tenure of Interim Resolution Professional under the IBC
Section 16 governs how the National Company Law Tribunal (NCLT), acting as Adjudicating Authority, appoints the interim resolution professional (IRP) at the start of the corporate insolvency resolution process (CIRP), and how long that professional remains in office.
What is an interim resolution professional?
An interim resolution professional (IRP) is an insolvency professional appointed by the Adjudicating Authority to take initial control of the corporate debtor's affairs during CIRP. An insolvency commencement date is the date on which the Adjudicating Authority admits the application for initiating CIRP. The Adjudicating Authority for corporate persons is ordinarily the NCLT under Section 60. The Board means the Insolvency and Bankruptcy Board of India (IBBI).
The IRP performs the initial duties described in Sections 17, 18 and 21, including management of the corporate debtor, collection of information and claims, and constitution of the committee of creditors (CoC), subject to the Code and regulations.
Section 16 explained, sub-section by sub-section
Section 16(1): Appointment on commencement
The Adjudicating Authority must appoint the IRP on the insolvency commencement date. Older copies stating that the appointment can be made within 14 days of commencement reflect superseded wording.
Section 16(2): Financial creditor applications
Where a financial creditor initiates CIRP under Section 7, the professional proposed in that application is ordinarily appointed as IRP if no disciplinary proceedings are pending against that person. The appointment is subject to the applicable statutory requirements and the professional's eligibility.
Section 16(3): Operational creditor applications
Where an operational creditor applies under Section 9, the process depends on whether an IRP has been proposed:
- Clause (a): If no IRP is proposed, the NCLT refers the matter to IBBI for a recommendation.
- Clause (b): If an IRP is proposed under Section 9(4), the proposed professional may be appointed if no disciplinary proceedings are pending.
Section 16(3A): Corporate applicant applications
Under the 2026 amendment, where CIRP is initiated by a corporate applicant under Section 10, the Adjudicating Authority refers the matter to IBBI for recommendation of an insolvency professional who may serve as IRP. This replaces the earlier treatment of Section 10 applications in Section 16(2).
Section 16(4): IBBI recommendation
Where a reference is made under Section 16(3), or Section 16(3A) as applicable, IBBI is required to recommend a suitable insolvency professional within 10 days of receiving the reference, provided no disciplinary proceedings are pending against the professional.
Section 16(5): Tenure of the IRP
The IRP continues in office until the date of appointment of the resolution professional under Section 22. The former rule limiting IRP tenure to 30 days was amended in 2018 and should not be relied upon as current law.
How the IRP appointment process works
- A financial creditor, operational creditor or eligible corporate applicant files a CIRP application under Section 7, 9 or 10, as applicable.
- The NCLT admits the application when the statutory requirements are satisfied; this triggers the insolvency commencement date.
- The NCLT appoints the IRP under Section 16, using a proposed professional or IBBI recommendation as required for the particular application route.
- The IRP assumes statutory duties, arranges public announcement and receives claims in accordance with Sections 13, 15, 17 and 18 and applicable regulations.
- The CoC decides whether to continue the IRP as resolution professional or replace the IRP under Section 22, generally by at least 66% voting share.
IRP duties and powers after appointment
Under Section 17, management of the corporate debtor vests in the IRP, and the powers of the board of directors or partners are suspended during the relevant period. Officers and managers must provide access to required records. Under Section 18, the IRP collects information about assets, finances and operations, receives and collates creditor claims, and constitutes the CoC. The IRP must also comply with applicable IBBI regulations, independence requirements and professional standards.
Frequently asked questions
Is the IRP still appointed within 14 days?
No. Section 16(1) was amended to require appointment on the insolvency commencement date.
Is the IRP's term limited to 30 days?
No. Under Section 16(5), the IRP continues until appointment of the resolution professional under Section 22.
Who recommends an IRP if an operational creditor does not propose one?
The NCLT seeks a recommendation from IBBI, which has a statutory 10-day period after receiving the reference.
Can the CoC replace the IRP?
Yes. Section 22 allows the CoC to appoint the IRP as resolution professional or propose another eligible professional, subject to the prescribed voting and appointment procedure.
Related provisions and official legal sources
Read the Insolvency and Bankruptcy Code, 2016 overview and consult the following official resources for statutory text, amendments and regulatory updates: