Insolvency and Bankruptcy Code, 2016 | Section 22

Section 22: Appointment of Resolution Professional under the IBC

Section 22 of the Insolvency and Bankruptcy Code, 2016 (IBC) sets out how the committee of creditors (CoC) selects the resolution professional (RP) after the interim resolution professional (IRP) has helped constitute the committee. The CoC may continue the IRP or propose a replacement, subject to the statutory voting threshold, written consent and the prescribed appointment procedure.

Key rule: At its first meeting, the CoC may resolve to retain or replace the IRP with the approval of not less than 66% of the voting share of financial creditors under Section 22(2). The former 75% threshold in the original text is outdated.

Meaning of key terms

Interim resolution professional (IRP): The insolvency professional initially appointed to carry out the functions specified by the Code during the initial stage of the corporate insolvency resolution process (CIRP).
Resolution professional (RP): An insolvency professional appointed to conduct the CIRP and exercise the functions conferred by the Code, including Section 23.
Committee of creditors (CoC): The committee constituted under Section 21, ordinarily comprising financial creditors, with voting shares determined under the Code.
Adjudicating Authority: For corporate persons, the National Company Law Tribunal (NCLT), as provided in Section 5(1) read with Section 60.
Board: The Insolvency and Bankruptcy Board of India (IBBI), established under the Code.

Section 22 explained, subsection by subsection

Section 22(1): First CoC meeting within seven days

The first meeting of the committee of creditors must be held within seven days of its constitution. This establishes an early decision point for the appointment of the RP.

Section 22(2): Continue or replace the IRP

At its first meeting, the CoC may, by a vote of at least 66% of the voting share of financial creditors, resolve either to appoint the existing IRP as the RP or to replace the IRP with another insolvency professional. The Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 replaced the original 75% threshold with 66%.

Section 22(3)(a): Continuing the IRP

Where the CoC chooses to continue the IRP as RP, the decision is subject to the IRP's written consent in the specified form. The CoC must communicate its decision to the IRP, the corporate debtor and the Adjudicating Authority.

Section 22(3)(b): Replacing the IRP

Where the CoC resolves to replace the IRP, it must file an application before the Adjudicating Authority seeking appointment of the proposed RP, together with the proposed professional's written consent in the specified form.

Section 22(4): IBBI confirmation

The Adjudicating Authority forwards the name of the proposed RP to the IBBI for confirmation and makes the appointment after confirmation by the Board.

Section 22(5): Delay in confirmation

If the IBBI does not confirm the proposed RP within ten days of receiving the name, the Adjudicating Authority shall direct the IRP to continue functioning as RP until confirmation of the proposed appointment.

Practical appointment procedure

The IRP constitutes the CoC following verification and collation of claims under the applicable provisions.
The first CoC meeting is held within seven days of constitution.
The CoC votes to continue the IRP or replace that professional, meeting the 66% threshold.
Written consent is obtained in the specified form and the necessary communication or application is made.
Where a replacement is proposed, the Adjudicating Authority follows the IBBI confirmation procedure.
Where confirmation is delayed beyond the statutory ten-day period, the IRP continues under the Adjudicating Authority's direction.

Section 21: constitution and voting structure of the CoC. Section 23: the RP's responsibility for conducting CIRP. Section 27: subsequent replacement of an RP during CIRP, which is a distinct procedure from the initial appointment under Section 22. Applicable IBBI CIRP Regulations prescribe meeting procedures and the form of written consent; these requirements should be checked against the regulations in force at the time of appointment.

Frequently asked questions

Is 75% CoC approval required under Section 22?

No. The statutory threshold under Section 22(2) is at least 66% of the voting share of financial creditors.

Can the CoC retain the interim resolution professional?

Yes. It may appoint the IRP as RP with the requisite vote and the IRP's written consent in the specified form.

Does the CoC directly appoint a replacement RP?

The CoC resolves to replace the IRP and applies to the Adjudicating Authority. The proposed RP's appointment follows the statutory IBBI confirmation process.

What happens if IBBI confirmation takes longer than ten days?

The Adjudicating Authority directs the IRP to continue functioning as RP until the proposed professional's appointment is confirmed.

Official statutory and regulatory sources

For the broader statute, see The Insolvency and Bankruptcy Code, 2016.

This article is a general explanation of Section 22 and should be read with the Code, applicable notifications and regulations. For an actual CIRP appointment, verify the latest operative text and prescribed forms.