Insolvency Resolution Professional (IRP) is appointed to conduct the insolvency resolution process in accordance with the procedure laid down in the Code. He is a professional with specialized knowledge, training and recognized by Insolvency Professional Agency and Insolvency and Bankruptcy Board of India for undertaking insolvency proceedings. The IRP is registered and regulated by the Board. They have a critical role in transactions under the Code. Insolvency Process under the Code starts with a Financial Creditor, an operational creditor or corporate applicant as the case may be who makes an application to the Adjudicating Authority about the debt default by the Corporate together with the name of IP who has consented to act as an interim IP. If no reference is made to the Board about the name of IP, the Adjudicating Authority makes reference to the Board. A financial creditor is a person to whom a financial debt is owed and the loan is disbursed against the consideration for the value of money borrowed etc. Operational debtor refers to an operational debt in respect of the provision of goods and services including employment, repayment of dues to the Govt. authorities or any local authority.
Duties and functions of Insolvency Professionals:
The Make My Filing Insolvency process under the code should be completed in 180 days from the date of application by the applicant with a one-time extension of 90 days. The duties of an Insolvency professional are quite onerous having regard to role and responsibility cast on the IP. The duties of IP are:
- To do a public announcement of the insolvency process in English language newspaper and regional language newspaper circulating at the location of corporate registered office and the principal office etc.
- To manage the affairs of the debtor as a going concern;
- To collect information relating to the assets, finances, and operations of the corporate debtor for determining the financial position;
- To collect all claims received from creditors;
- To constitute a committee of creditors.
The code also specifies functions and obligations to be observed by the Insolvency Professionals. Where any insolvency resolution, fresh start, liquidation or bankruptcy process has been initiated, it shall be the function of Insolvency Professionals to take such actions as may be necessary for the manner provided in the Code.
The Insolvency services professional occupies a strategic position and acts as an intermediary between the debtor/creditors on the one hand and the Adjudicating Authority on the other hand and functions under the watchful eyes of the Agency and the Board. The major benefit is that the process is strictly in time bound manner and there are no intervene by other legal authority so the bank can recover their money timely and on the other side operational creditor who’s money is due but not paid by debtors can be recovered through this legal process.