Duties of Resolution Professional [Section 25] - Insolvency Resolution And Liquidation For Corporate Persons - IBC

Duties of Resolution Professional Protection of the assets of the Corporate Debtor [ Section 25(1) ] I t shall be the duty of the resolution professional to preserve and protect the assets of the corporate debtor , including the continued business operations of the corporate debtor. Duties of Interim Resolution Professional (IRP) [ Section 25(2) ] T h e resolution professional shall undertake the following actions to protect the assets of the corporate debtor, namely: ( a ) take immediate custody and control of all the assets of the corporate debtor, including the business records of the corporate debtor; (b ) represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial or arbitration proceedings; ( c ) raise interim finances subject to the approval of the committee of creditors; ( d ) appoint accountants, legal or other professionals in the manner as specified by Board; ( e ) maintain an updated list of claims ; ( f ) convene and attend all meetings of the committee of creditors; ( g ) prepare the information memorandum ; h ) in v i t e prospective resolution applicants , w h o fulfil such criteria as may be laid down by him with the approval of committee of creditors, having regard to the complexity and scale of operations of the business of the corporate debtor and such other conditions as may be specified by the Board, to submit a resolution plan or plans; ( i ) present all resolution plans at the meetings of the committee of creditors; ( j ) file application for avoidance of transactions in accordance with Chapter III, if any; and ( k ) such other actions as may be specified by the Board. Relevant Case Law I n the case of Swiss Ribbons Pvt. Ltd. Anr. Vs. Union of India Ors . - SC, Dated 25.01.2019 The Supreme Court opined that- ( i ) The RP has administrative powers as opposed to quasi-judicial powers. ( i i ) The RP is really a facilitator of the resolution process , whose administrative functions are overseen by the CoC and by the AA. (i i i ) Under the CIRP Regulations, the RP has to vet and verify claims made, and ultimately, determine the amount of each claim. Kotak Investment Advisors Ltd. Vs. Krishna Chamadia Ors. - NCLAT Dated 05.08.2020 The act of RP to accept the resolution plan after opening of other bid cannot be justified by any means and is a blatant misuse of the authority invested in the RP to conduct CIRP. It was further observed that the material irregularity in exercise of powers by the RP, even with the approval of the CoC in the conduct of CIRP, cannot be treated as an exercise of commercial wisdom. Amit Gupta Vs. Yogesh Gupta - NCLAT Dated 20.12.2019 The RP cannot go into investigations and enquiries whether or not a CD is an MSME, and the AA is also not expected to make such investigations, enquiries on such evidence or give findings on such issues. S. Rajendran Vs. Jonathan Mouralidarane - NCLAT Dated 01.10.2019 RP has no jurisdiction to determine a claim. He can only collate it, based on evidence and the record of the CD, or as filed by the FC. Asset Reconstruction Company (I) Ltd. (ARCIL) Vs. Koteswara Rao Karuchola Ors. - NCLAT Dated 18.11.2019 After the constitution of the CoC, without its permission, the RP was not competent to entertain more applications after three months to include one or other person as FC. Panna Pragati Infrastructure Pvt. Ltd. Anr. Vs. Amit Pareek Ors. NCLAT order dt. 19.10.2020 RP had acted against the mandate of provisions contained in sections 25(2) and section 30(3) of the Code by not placing the revised resolution plan before the CoC for consideration. This was also contrary to the objective of maximisation of value of assets of CD. Jaypee Kensington Boulevard Apartments Welfare Association Ors. Vs. NBCC (India) Ltd. Ors. - SC Dated 02.03.2021 The SC was appalled with the developments leading to arrest of the IRP, who was working pursuant to the order passed by the Court and entrusted with the functioning of the CD. It observed that the police official dealing with the case is not familiar with the provision of privilege of IRP appointed by the Court in terms of section 233 of the Code. While directing immediate release of the IRP, the SC directed the investigation officer not to take any coercive action against the IRP.