Interim Resolution Professional (IRP) Under IBC 2016 | Nainit Savla & Associates

Interim Resolution Professional (IRP)

Q: Who appoints the Interim Resolution Professional?

The IRP is appointed by the NCLT at CIRP admission. For Section 7 petitions, the financial creditor proposes the name. For Section 9, the operational creditor may propose a name or IBBI recommends one. The IRP must have no conflict of interest and must submit IP1 consent.

Q: What qualifications are required to act as an IRP?

The IRP must be an IBBI-registered Insolvency Professional — having passed the Limited Insolvency Examination and being a CA, CS, CMA, or Advocate with specified experience, or a graduate with 15 years of management experience. No conflict of interest with the corporate debtor is permitted.

Q: Can the IRP continue as the Resolution Professional?

Yes. At the first CoC meeting, the CoC votes whether to confirm the IRP or replace them (66% vote required to replace). If not replaced, the IRP automatically becomes the RP. In practice, the IRP is confirmed as RP in most cases.

Q: What is the public announcement and why is it important?

Section 15 public announcement — published within 3 days of IRP appointment in English and vernacular newspapers and on IBBI website — invites creditors to submit claims within 14 days. Creditors who miss the deadline risk non-recognition of their debt in the CIRP.

Q: What happens to pending legal proceedings against the corporate debtor once an IRP is appointed?

The Section 14 moratorium automatically stays all civil suits, execution proceedings, SARFAESI actions, arbitrations, and enforcement against the corporate debtor's assets. Criminal proceedings are not stayed. The IRP represents the corporate debtor in all stayed proceedings.

The Interim Resolution Professional (IRP) is the first insolvency professional appointed by the National Company Law Tribunal (NCLT) at the time of admitting a Corporate Insolvency Resolution Process (CIRP) petition. The IRP assumes control of the corporate debtor, displacing its board of directors, and manages its affairs during the critical first 30 days of the CIRP — making the public announcement, collecting creditor claims, constituting the Committee of Creditors (CoC), and preserving the value of the corporate debtor's assets until the CoC either confirms the IRP or appoints a new Resolution Professional. We provide advisory support and professional services related to the IRP role under the Insolvency and Bankruptcy Code, 2016.

IRP Appointment Support

Advisory on the process for nomination and appointment of the IRP — including the eligibility criteria under the IBBI (Insolvency Professionals) Regulations, the nomination process under Section 16 of the IBC, and the written communication of consent (IP1 form) required from the proposed IRP.

Public Announcement (Section 15)

Assistance in preparation and publication of the public announcement under Section 15 of the IBC — inviting creditors to submit their claims within 14 days of CIRP commencement, in the format prescribed by IBBI Regulations.

Claims Collection & Verification

Support for the IRP in collecting, verifying, and collating claims from financial creditors, operational creditors, employees, and workmen — using the prescribed forms (FA, FB, FC, FD) and maintaining the list of creditors.

Committee of Creditors Constitution

Advisory on the constitution of the Committee of Creditors — determining financial creditor eligibility, computing voting shares, constituting the CoC within 30 days of IRP appointment, and conducting the first CoC meeting.

Corporate Debtor Management

Advisory on the IRP's powers and duties in managing the corporate debtor's operations during the first 30 days — cash management, employee retention, supplier relationship management, and preservation of asset values.

IRP to RP Transition

Advisory on the transition from IRP to Resolution Professional — the CoC's first meeting at which it confirms the IRP or appoints a new RP, and the handover of all records, claims, and information to the incoming RP.

Role and Powers of the Interim Resolution Professional

Upon appointment, the IRP takes over all the powers of the board of directors and the management of the corporate debtor. The directors, officers, and managers of the company are required to extend all cooperation to the IRP — providing all books, records, financial statements, and asset information on demand. The IRP has the power to access the corporate debtor's books of accounts, raise interim finance (with the protection of the moratorium), and take all decisions necessary to preserve the value of the corporate debtor's assets during the CIRP.

The IRP role is strictly time-limited — it ends when the CoC meets for the first time and either confirms the IRP as the Resolution Professional or appoints a different IBBI-registered insolvency professional as the RP. The IRP's role must be completed within 30 days of their appointment.

Key Duties of the IRP Under the IBC

Make a public announcement within 3 days of appointment inviting creditor claims
Collect and verify all creditor claims within 14 days of the public announcement
Constitute the Committee of Creditors and convene its first meeting within 30 days of appointment
Take custody and control of all assets of the corporate debtor including business records
Represent and act on behalf of the corporate debtor in all legal proceedings
Raise interim finance as may be required to continue the operations of the corporate debtor
Prepare the list of assets and liabilities of the corporate debtor as on the insolvency commencement date
File the preliminary report with the NCLT within 75 days of the insolvency commencement date

Frequently Asked Questions

Who appoints the Interim Resolution Professional?

The IRP is appointed by the NCLT at the time of admitting the CIRP petition under Section 16 of the IBC. For a Section 7 petition (filed by a financial creditor), the applicant financial creditor proposes a name in the petition and the NCLT appoints that person if they are a registered insolvency professional and are not disqualified. For a Section 9 petition (filed by an operational creditor), the operational creditor may also propose a name; if no name is proposed, the NCLT directs the IBBI to recommend a name. The proposed IRP must not have a conflict of interest with the corporate debtor and must submit a written consent (IP1 form) to act as IRP before their appointment.

What qualifications are required to act as an IRP?

The IRP must be a registered Insolvency Professional (IP) — registered with an Insolvency Professional Agency (IPA) recognised by the IBBI and holding a valid Certificate of Registration as an Insolvency Professional. The person must have passed the IBBI Limited Insolvency Examination and either be a Chartered Accountant, Company Secretary, Cost Accountant, or Advocate with specified years of experience, or hold a graduate degree with 15 years of management experience. The IP must not have any conflict of interest with the corporate debtor — including not being an employee, director, partner, or relative of the corporate debtor or the petitioning creditor, and not being in default with any creditor.

Can the IRP continue as the Resolution Professional?

Yes. At the first meeting of the Committee of Creditors — which must be convened within 7 days of the CoC's constitution — the CoC decides whether to confirm the IRP as the Resolution Professional or to replace them with a different registered insolvency professional. The CoC requires a majority vote of 66% in value to replace the IRP. If the CoC does not resolve to replace the IRP, the IRP automatically becomes the Resolution Professional and continues in that role for the duration of the CIRP. In practice, the IRP is confirmed as the RP in a large majority of cases, particularly when they have been nominated by the major financial creditor.

What is the public announcement and why is it important?

The public announcement under Section 15 of the IBC is a formal notice that the IRP must make within 3 days of appointment — published in one English-language national newspaper, one vernacular newspaper in the state of the corporate debtor's registered office, and on the IBBI website. The announcement invites all creditors to submit their claims within 14 days. It is critical because it initiates the claims collection process — any creditor who does not submit their claim within the specified period risks not having their debt recognised in the CIRP. The announcement must contain specified details including the insolvency commencement date, the IRP's name and contact details, the last date for claims submission, and the procedure for submitting claims.

What happens to pending legal proceedings against the corporate debtor once an IRP is appointed?

Once the NCLT admits the CIRP petition and appoints the IRP, the Section 14 moratorium comes into immediate effect — automatically staying all pending and future legal proceedings, execution proceedings, arbitration proceedings, and enforcement actions against the corporate debtor's assets. Pending suits before civil courts are stayed; execution proceedings under decrees are stayed; recovery proceedings by banks and NBFCs under the SARFAESI Act are stayed; and NCLT applications against the corporate debtor are stayed. The moratorium does not stay criminal proceedings. The IRP takes over the conduct of all pending civil and regulatory proceedings in which the corporate debtor is a party — as the representative of the corporate debtor.

IRP Advisory — Protecting the CIRP from Day One

Advisory support for Interim Resolution Professionals and creditors navigating the critical first 30 days of a CIRP under the IBC 2016.

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