Section 23 IBC: Resolution Professional to Conduct Corporate Insolvency Resolution Process
Section 23 of the Insolvency and Bankruptcy Code, 2016 (IBC) establishes who conducts the corporate insolvency resolution process (CIRP), who manages the corporate debtor during that process, and how records are transferred when a new resolution professional is appointed.
Section 23: Statutory provisions explained
Subject to Section 27, the resolution professional conducts the entire CIRP and manages the corporate debtor's operations during the CIRP period. The proviso extends that management role beyond expiry of the CIRP period until the specified approval or liquidation order.
The resolution professional exercises the powers and performs the duties vested in or conferred on the interim resolution professional under Chapter II of Part II of the Code.
When a resolution professional is appointed under Section 22(4), the interim resolution professional must provide all information, documents and records concerning the corporate debtor within the interim professional's possession and knowledge to the appointed professional.
Important definitions and related provisions
Resolution professional
Under Section 5(27), a resolution professional means an insolvency professional appointed to conduct the CIRP and includes an interim resolution professional. The appointment or continuation mechanism is addressed by Section 22; replacement is addressed by Section 27.
Corporate insolvency resolution process period
Section 5(14) defines this period by reference to the 180-day period beginning from the insolvency commencement date and extensions allowed under Section 12. The statutory timetable, exclusions and applicable judicial directions must be considered in each case.
Adjudicating Authority
Under Section 5(1), for corporate persons the Adjudicating Authority is the National Company Law Tribunal (NCLT) constituted under the Companies Act, 2013.
Practical responsibilities of the resolution professional
- Manage the corporate debtor as a going concern, protect its assets and preserve value in accordance with Sections 20 and 23.
- Exercise the management powers transferred under Section 17, including access to records and financial information.
- Receive, collate and verify creditor claims and undertake duties under Section 25 and the applicable CIRP Regulations.
- Convene and conduct Committee of Creditors meetings in accordance with Section 24 and the regulations.
- Invite prospective resolution applicants and handle resolution plans in accordance with Sections 25, 29, 30 and the applicable regulations.
- Maintain and transfer process records, including the handover contemplated by Section 23(3).
Does the resolution professional continue after the CIRP deadline?
Yes. The proviso to Section 23(1) provides continuity of management after expiry of the CIRP period until the NCLT passes an order approving a resolution plan under Section 31(1) or appointing a liquidator under Section 34. This provision should not be interpreted as an automatic extension of the statutory CIRP completion deadline under Section 12.
Frequently asked questions
Who manages the company during CIRP?
The resolution professional manages the operations of the corporate debtor under Section 23, subject to the Code, the role of the Committee of Creditors and orders of the Adjudicating Authority.
Can a resolution professional be replaced?
Yes. Section 27 provides a procedure for replacement by the Committee of Creditors, subject to the statutory voting requirement and appointment procedure.
What happens when the interim resolution professional is replaced?
Under Section 23(3), the interim resolution professional must hand over relevant information, documents and records to the appointed resolution professional.
Official legislation and regulatory sources
- India Code - Insolvency and Bankruptcy Code, 2016
- India Code - IBC statutory text (PDF)
- IBBI - legal framework, amendments and current CIRP Regulations
For the full Act and related provisions, see The Insolvency and Bankruptcy Code, 2016.