Appointment as Liquidators: Preparing Panel of IPs, IPEs

The new guidelines unveiled by the Insolvency and Bankruptcy Board of India (IBBI) give an outline of the procedure to be followed in preparing a panel of insolvency professionals (IPs) for appointment as interim resolution professionals, liquidators, resolution professionals and bankruptcy trustees. This time, the guidelines refer to insolvency professional entities (IPEs) as well.

Upon receiving a reference from the Adjudicating Authority, the Board has to recommend the names of IPs for appointment to said roles under provisions of the Insolvency and Bankruptcy Code, 2016. The guidelines specify the procedure to be followed in preparing a panel in this regard so that it may be shared with the Adjudicating Authority. Accordingly, conditions have been laid down for an IP to be eligible to be included in the panel. Further, the provisions shed light on aspects including expression of interest, the inclusion of IPs in the order of their experience, and deemed acceptance by IPs.

Notably, the guidelines, issued on June 5, make reference to IPEs, unlike the previous guidelines. It is specified that the panel will have a zone-wise list based on the registered office of the individual IPs. However, when it comes to IPEs as IPs, the zone criteria do not apply and their panel will be valid across all NCLT benches. IPEs were allowed to get enrolled, registered and act as IPs for conducting the insolvency processes under the Code in September 2022, vide amendments to the IBBI (Insolvency Professionals) Regulations, 2016. This was done to enhance the efficiency of the insolvency resolution processes and to capitalise on their resources and experience. Prior to the 2022 amendment, IPEs were permitted to provide only support services to IPs.

The validity of the panel created under the previous guidelines will come to an end by the end of this month. The new panel will thereafter take effect and be valid for a period of six months i.e. till the end of this year.