The Insolvency and Bankruptcy Board of India (IBBI) vide notification dated June 12, 2023 has issued the “Insolvency Professionals to Act as Interim Resolution Professionals, Liquidators, Resolution Professionals, and Bankruptcy Trustees (Recommendation) Guidelines, 2023.”
These guidelines provide the procedure to establish a panel of eligible Insolvency Professionals (IPs) for appointment as Interim Resolution Professionals (IRPs), Liquidators, Resolution Professionals (RPs), and Bankruptcy Trustees (BTs) for a specified period.
The guidelines will be effective from 1st July 2023 to 31st December 2023.
Eligibility of IPs
To be included in the panel, IPs must meet certain eligibility criteria. Firstly, there should be no pending disciplinary proceedings against the IP, either initiated by the IBBI or the Insolvency Professional Agency (IPA). Additionally, the IP must not have been convicted by a court of competent jurisdiction within the last three years. Furthermore, IPs must submit an expression of interest and consent to act as IRPs, RPs, Liquidators, and BTs appointed by the National Company Law Tribunal (NCLT) and Debt Recovery Tribunal (DRT). Finally, the IP must hold a valid Authorization for Assignment (AFA) that remains valid for the duration of the panel.
Expression of Interest
The guidelines specify the process for submitting expressions of interest. The Board will invite IPs to submit their expressions of interest by sending an email to their registered email addresses. The submission of an expression of interest is considered an unconditional consent by the IP to act as an IRP, Liquidator, RP, or BT for any process related to a corporate or individual debtor. IPs have until June 25, 2023, to submit their expressions of interest, and the Board will share the panel with the Authorized Authorities (AA) by June 30, 2023. IPs are also required to indicate the sectors in which they have handled or are handling assignments under the Insolvency and Bankruptcy Code, selecting from a predefined list of sectors.
Panel of IPs
The IBBI will prepare a common panel of IPs eligible for appointment as IRPs, Liquidators, RPs, and BTs. The panel will have a validity of six months and will be shared with the NCLT and DRT in accordance with the guidelines. The panel will be categorized based on the registered office address of the IPs, divided into different zones. The AA has the authority to select IPs for appointment from the panel, depending on the specific requirements of the insolvency or bankruptcy process.
To ensure the objectives of the Insolvency and Bankruptcy Code are achieved, the guidelines outline a scoring criteria. IPs will be included in the panel based on the volume of completed assignments, prioritizing experience. In cases where multiple IPs have the same score, the order of registration with the Board will be considered, with the IP registered earlier being placed higher in the panel.
Conditions for IPs
The inclusion of an IP’s name in the panel will be deemed as acceptance to act as an IRP, Liquidator, RP, or BT when appointed by the NCLT or DRT. IPs are expected not to withdraw their consent or refuse appointments unless permitted by the relevant authorities. Any refusal without sufficient justification will result in the removal of the IP’s name from the panel for six months. IPs are encouraged to maintain their registration, membership, and Authorization for Assignment during the validity period of the panel.