Answer By law4u team
The Interim Resolution Professional (IRP) is a key figure appointed immediately after the admission of an insolvency application by the National Company Law Tribunal (NCLT). The IRP’s primary role is to manage the corporate debtor’s affairs, business, and assets during the initial phase of the Corporate Insolvency Resolution Process (CIRP) until a Resolution Professional (RP) is appointed by the Committee of Creditors (CoC).
Role and Responsibilities of the IRP
Taking Control of the Corporate Debtor
The IRP takes over the management and control of the corporate debtor from the existing management to ensure smooth operations during the CIRP.
Constituting the Committee of Creditors (CoC)
The IRP identifies, verifies, and calls a meeting of the financial creditors to form the CoC within 30 days of appointment.
Managing Assets and Business
The IRP safeguards the assets, manages operations, and ensures no unauthorized disposal or transfer of assets during the moratorium period.
Maintaining Books of Accounts
The IRP takes custody of all records and books of accounts and ensures proper accounting and reporting.
Communication with Creditors
Acts as the point of contact between the corporate debtor and creditors, providing necessary information and updates.
Filing Reports and Applications
The IRP submits periodic reports to the NCLT about the progress of CIRP and files necessary applications as required.
Implementation of Moratorium
The IRP ensures the moratorium declared by the NCLT is enforced, preventing creditors from initiating or continuing legal proceedings against the corporate debtor.
Appointment of Resolution Professional (RP)
Upon formation of the CoC, the IRP facilitates the process of selecting and appointing the Resolution Professional who will manage the rest of the insolvency process.
Significance of the IRP
Ensures a neutral and professional management of the debtor’s affairs post-insolvency admission.
Prevents asset dissipation or fraudulent transactions during the critical initial phase.
Lays the foundation for an orderly and transparent resolution process.
Example
A corporate debtor defaults on loan repayment, and the NCLT admits an application for CIRP. The tribunal appoints Mr. Sharma as the Interim Resolution Professional.
Actions taken by Mr. Sharma:
- Takes control of the company’s operations and assets immediately.
- Sends notices and calls the first CoC meeting with all financial creditors.
- Ensures no creditor files any suits or recovers dues during the moratorium.
- Keeps detailed records of the debtor’s financial status and reports to NCLT.
- After the CoC forms, assists in appointing a permanent Resolution Professional to continue the process.
