Powers and Duties of the Interim Resolution Professional (IRP)
The Insolvency and Bankruptcy Code, 2016 (IBC) introduced a streamlined process for resolving corporate insolvency. A crucial figure in this process is the Interim Resolution Professional (IRP), appointed at the very beginning to manage the affairs of the corporate debtor until a Resolution Professional (RP) is appointed. This section delves into the significant powers and responsibilities vested in the IRP.
Initiation of the Corporate Insolvency Resolution Process (CIRP)
The CIRP can be initiated by a financial creditor, an operational creditor, or the corporate debtor itself. Upon admission of the application by the Adjudicating Authority (AA), the IRP is appointed. This marks the commencement of the CIRP, and the IRP's role becomes paramount in safeguarding the assets and continuing the business of the corporate debtor.
Key Powers of the IRP
Key Duties of the IRP
The duties of an IRP are extensive and are primarily aimed at preserving the value of the corporate debtor and facilitating the resolution process. These duties are outlined in various sections of the IBC and its regulations.
The IRP's primary duty is to take control and custody of all assets, property, actionable claims, and books of accounts of the corporate debtor. This includes managing the day-to-day operations of the business to the extent necessary to preserve its value. The IRP must also protect the assets from any dissipation or encumbrance. This involves securing physical assets, managing bank accounts, and ensuring that no unauthorized transactions occur. The IRP acts as a fiduciary, with a duty to act in the best interests of all stakeholders.
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The IRP's role is time-bound and transitional. Their primary objective is to ensure a smooth handover to the Resolution Professional, if appointed, and to preserve the corporate debtor's value during the critical initial phase of the CIRP.
Limitations and Accountability
While the IRP is vested with significant powers, these are not absolute. The IRP acts under the supervision of the Adjudicating Authority and, once formed, the Committee of Creditors. Any actions taken by the IRP can be challenged and reviewed. The IRP is accountable for their actions and omissions and can be removed or penalized for any misconduct or failure to perform their duties diligently.
To preserve the value of the corporate debtor and facilitate the resolution process.
Section 18 of the IBC.
The Adjudicating Authority.
Learning Resources
The primary legal document governing corporate insolvency resolution in India. Essential for understanding the framework and specific provisions related to IRPs.
Detailed regulations that operationalize the IBC, providing specific guidelines on the conduct and duties of Resolution Professionals, including Interim Resolution Professionals.
A blog post that breaks down the powers and duties of the IRP in a clear and accessible manner, offering practical insights.
This article provides a concise overview of the key powers and duties of an IRP, focusing on the practical aspects of their role.
An academic perspective on the IRP's function, highlighting their importance in initiating and managing the CIRP effectively.
While a broader guide to CIRP, it clearly outlines the initial stages where the IRP is active and their responsibilities.
An overview of the IBC, including sections relevant to the appointment and powers of the IRP, with updates on amendments.
The official website of the National Company Law Tribunal, where applications for CIRP are filed and orders related to IRPs are issued.
Provides answers to common questions regarding the IBC and CIRP, often clarifying aspects of the IRP's role and responsibilities.
A comprehensive overview of the IBC by the Institute of Chartered Accountants of India, detailing the roles of various professionals, including the IRP.