INSOLVENCY PROFESSIONALS TO ACT AS INTERIM RESOLUTION PROFESSIONALS,

LIQUIDATORS, RESOLUTION PROFESSIONALS AND BANKRUPTCY TRUSTEES

(RECOMMENDATION) GUIDELINES, 2021

By: Jyoti A Singh & Nishi Agrawal

AJA Legal and Associates

Recently, the Insolvency and Bankruptcy Board of

India (“IBBI”) issued Insolvency Professionals to
Act as Interim Resolution Professionals,
Liquidators, Resolution Professionals and
Bankruptcy Trustees (Recommendation)
Guidelines, 2021 dated June 1, 20211 (“2021
Guidelines”) thereby replacing its earlier
guidelines on Insolvency Professionals to act as
Interim Resolution Professionals, Liquidators,
Resolution Professionals and Bankruptcy Trustee
(Recommendation) (Second) Guidelines, 2020
dated November 23, 2020.2 The main intent behind
Picture credit: Pixabay.com issuing these 2021 Guidelines is to create a panel
of insolvency professionals (“IP”) which will enable
the National Company Law Tribunal and Debt
Recovery Tribunal (“Adjudicating Authority”/ “AA”) to appoint an IP without making any
reference to the IBBI. The aforesaid 2021 Guidelines will come into effect from July 1, 2021.

As per the provisions of the Insolvency and Bankruptcy Code, 2016 (“IBC”), on the direction
of AA, IBBI needs to recommend a name of an IP to be appointed as an interim insolvency
resolution professional (“IRP”), insolvency resolution professional (“RP”), liquidator or as
bankruptcy trustee (“BT”) as the case may be, which takes 2-3 weeks to complete. As per the
existing process first, AA needs to issue direction to IBBI for the appointment of IP, further
based on direction, IBBI identifies an IP and makes recommendation to AA. Other than that,
it is also vital to know that IBBI does not have sufficient information with respect to the nature
and complexity of the insolvency or the bankruptcy process, neither it has any source to know
the resources available with the IP to undertake the process.

The reason behind creating such a panel is to save time spend by AA in seeking
recommendations from AA. It is indisputable that AA is in a better position to analyse the
complexity of the resolution or bankruptcy process and this panel will allow it to choose any
name from the panel and issue an appointment order by itself without awaiting any
confirmation from IBBI. The panel will be prepared as per the appointment requirement
envisaged under sections 16(4), 34(6), 97(4), 98(3), 125(4), 146(3) and 147(3) of the IBC.

KEY FEATURES OF 2021 GUIDELINES-

• A common panel will be prepared for the appointment of IPR, RP, liquidator and BT as per
the provisions of IBC and the same shall be shared with the Adjudicating Authority;
• The panel shall have a zone wise list which will be prepared as per the registered office of
the IP;

1
Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy
Trustees (Recommendation) Guidelines, 2021, Insolvency and Bankruptcy Board of India, dated June 1, 2021, accessed by link
https://ibbi.gov.in/uploads/legalframwork/57df52b9084e184d7dd15a6f4c3e314b.pdf
2
Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy
Trustees (Recommendation) (Second) Guidelines, 2020, Insolvency and Bankruptcy Board of India, dated November 23, 2020,
accessed by link https://ibbi.gov.in/uploads/legalframwork/18c79bb7deb50c0ab7d0a195f155ff82.pdf

1
• The panel will reshuffle, every 6 (six) months;
• The panel shall have only those names of IPs which are eligible as per the IBBI (Insolvency
Professionals) Regulations, 2016;
• IBBI shall invite the expression of interest from the IP via Form A, which is required to be
submitted by the IPs as per the instructions of IBBI
• All the IP whose names are included in the panel will be put in the order of the volume of
ongoing processes they have in the hand and the IP with the lowest volume will be kept at
the top of the panel and will be scored 100 while the IP with the highest volume will be kept
at the bottom and will be scored 00, further, according to the difference in the highest and
lowest volume, other IP will be given a score and shall be paced in the panel;
• The panel will be prepared by the whole-time members of the IBBI;
• The IP included in the panel as per their expression of interest cannot be allowed to
withdraw their interest at any point in time, neither they can decline to act as an IP nor can
surrender their resignation during the validity of the panel.
WAY FORWARD-
2021 Guidelines, echos with the spirit of IBC which is the time bound resolutions of a corporate
debtor. The selection of IP from the panel by the Adjudicating Authority would save a lot of
time and cost involved in the resolution process. The aforesaid 2021 Guidelines not only
benefit the creditors but all the stakeholders involved in the tedious process.