Section 98: Replacement of Resolution Professional
Section 98 of the Insolvency and Bankruptcy Code, 2016 (IBC) sets out how a resolution professional appointed under Section 97 may be replaced in an insolvency resolution process involving an individual or partnership firm, subject to the applicable commencement and jurisdictional framework. It provides a route for applications by a debtor or creditor, a separate route following a creditors' meeting, scrutiny by the Insolvency and Bankruptcy Board of India (IBBI), and an orderly transfer of records.
What does Section 98 cover?
The resolution professional is the insolvency professional appointed by the Adjudicating Authority to carry out statutory functions in the process. The Adjudicating Authority is the tribunal or authority with jurisdiction under the Code; for personal guarantors to corporate debtors, Section 60 generally places proceedings before the National Company Law Tribunal (NCLT), subject to its terms. The Board means the Insolvency and Bankruptcy Board of India.
Section 98 concerns replacement of a professional already appointed under Section 97. It is distinct from the initial appointment procedure and from the examination of the insolvency application under Section 99.
Commencement note: Part III has been brought into force in stages. The provisions relating to personal guarantors to corporate debtors became operative from 1 December 2019. Do not assume that the same procedural regime is operational for every other individual or partnership firm without checking the relevant commencement notifications.
Section 98 explained: all eight subsections
Section 98(1): Application by debtor or creditor
If the debtor or creditor considers that the resolution professional appointed under Section 97 should be replaced, that person may apply to the Adjudicating Authority. The section provides a mechanism to request replacement; filing an application does not itself remove the existing professional.
Section 98(2): Reference to IBBI within seven days
The Adjudicating Authority must make a reference to the Board for replacement within seven days of receiving an application under subsection (1).
Section 98(3): Recommendation within ten days
Within ten days of receiving the reference, the Board must recommend a resolution professional against whom no disciplinary proceedings are pending.
Section 98(4): Replacement for implementation of repayment plan
Creditors may also apply for replacement when a meeting of creditors has decided to replace the resolution professional with a new professional for implementation of the repayment plan. This is an additional route and must be read with the provisions governing creditors' meetings and repayment plans.
Section 98(5): Verification of proposed professional
Where the Adjudicating Authority admits an application under subsection (1) or (4), it directs the Board to confirm that no disciplinary proceedings are pending against the proposed professional.
Section 98(6): Board's response within ten days
Within ten days of the direction under subsection (5), the Board communicates either confirmation of the nominated professional or rejection of that nomination with a recommendation for another professional.
Section 98(7): Appointment order
Based on the Board's communication under subsection (3) or (6), the Adjudicating Authority passes an order appointing the new resolution professional. The appointment is made by order of the Adjudicating Authority, not solely by the applicant or the Board.
Section 98(8): Records and cooperation
The Adjudicating Authority may direct the outgoing professional to share all information relating to the insolvency resolution process and cooperate with the incoming professional as required. This supports continuity of the proceeding.
Statutory timeline at a glance
| Step | Provision | Time limit |
|---|---|---|
| Adjudicating Authority refers debtor/creditor replacement request to IBBI | 98(2) | Within 7 days of receipt |
| IBBI recommends an eligible professional | 98(3) | Within 10 days of reference |
| IBBI confirms or rejects a proposed nominee | 98(6) | Within 10 days of direction |
| Adjudicating Authority appoints replacement | 98(7) | No separate numerical period specified in this subsection |
The two ten-day requirements relate to different procedural directions. They should not be treated as one universal deadline for completion of every replacement.
Practical considerations when requesting replacement
An applicant should identify the pending insolvency proceeding, the order appointing the current resolution professional, the reason replacement is sought, and the relief requested. Where the creditors' meeting route applies, the relevant decision and meeting record should be supplied. Applicable tribunal rules, prescribed forms, professional eligibility requirements and procedural directions should be checked before filing.
The Code does not state in Section 98(1) an exhaustive list of substantive grounds for seeking replacement. A party should therefore distinguish factual reasons advanced in an application from grounds expressly enumerated by statute.
Relationship with other IBC provisions
Sections 94 and 95 concern applications initiated by debtors and creditors. Section 96 governs interim moratorium on filing, subject to its conditions. Section 97 provides for appointment of a resolution professional. Section 99 requires examination of the application and a report, while Section 100 concerns admission or rejection by the Adjudicating Authority. Section 208 sets out functions and obligations of insolvency professionals, alongside applicable regulations and the code of conduct.
Official legislation and regulatory resources
- India Code: Insolvency and Bankruptcy Code, 2016
- IBBI: Text of the Insolvency and Bankruptcy Code, 2016
- IBBI legal framework: current regulations, notifications and amendments
- IBBI: prescribed forms and downloads
For a live matter, consult the latest consolidated statutory text, commencement notifications, applicable personal guarantor regulations and tribunal orders. This article explains the statutory framework and is not a substitute for case-specific legal advice.