The Insolvency and Bankruptcy Board of India (IBBI) has decided to continue its new approach of preparing a joint panel of Qualified Interim Resolution Professionals (IRPs), Resolution Professionals (RPs) or Liquidators from which the National Company Law Tribunal (NCLT) can easily select and book appointments under the Insolvency and Bankruptcy Code (IBC).
As the mandate of the previous panel ends on June 30, IBBI has paved the way for the establishment of the next joint panel and has developed new guidelines for this purpose.
The latest guidelines are broadly in line with the one issued in December 2021, say insolvency law experts.
They aim to provide a quick approach to the process of appointing a PR who plays a vital role in the resolution process under the IBC. The guidelines will help speed up the selection process, as the NCLT can choose any name from the panel and each of these Insolvency Professionals (IPs) would be deemed to have been recommended by the Board.
The panel will have a list of IP addresses per zone based on the registered office (address registered with the board of directors) of the IP address. This would mean that the NCLT or a debt collection tribunal (DRT) as the contracting authority (AA) could appoint a resolution professional without having to refer to the IBBI and wait for its recommendation.
The previous process of the AA referring to IBBI, the Board making a recommendation to the AA, and then appointing the PI was time consuming and took two to three weeks.
Sushmita Gandhi, Partner, IndusLaw, said the new guidelines reinforce the time-efficient approach introduced in December 2021 to provide a panel of qualified insolvency professionals to courts to make the appointment.
Under previous guidelines, the panel had to be valid for a period of six months, until which time a PI had to obtain permission to transfer. It seems that the previous guidelines have been replaced in view of the new groups formed. “These guidelines aim to save considerable time and ensure the efficiency of insolvency/bankruptcy proceedings,” Gandhi added.
Meanwhile, insolvency law experts felt it would be a good idea for IBBI to create panels with ratings like what they do for audit firms, forensic constitution with the Association of Indian Banks, the constitution of the CAG – now that there is a good five-year experience of the insolvency and bankruptcy code.
“It would ensure the right person for the right job,” sources said.
June 11, 2022