IBBI suggests ground rules for Insolvency Professionals, Committee of Creditors

The Insolvency and Bankruptcy Board of India (IBBI) has come up with a charter of responsibilities for Insolvency Resolution Professionals (IRPs) and Committee of Creditors (CoC) so that stakeholders have a complete and clear understanding of their roles and responsibilities in a Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC).

This charter, which is not mandatory, has been prepared in consultation with the three insolvency professional agencies that have been set up by the CA Institute, the Institute of Company Secretaries and the Cost Accountants Institute.

“This charter is only indicative and meant for the sole purpose of educating the stakeholders,” said an IBBI official.

While specifying their roles, the IBC does not envisage one assuming the role of the other.

It may be recalled that the Supreme Court had, in a recent decision, observed that the commercial wisdom of the CoC has been given paramount status without any judicial intervention for ensuring completion of the stated processes within the timeline prescribed by the IBC.

The legislature consciously has not provided any ground to challenge the “commercial wisdom” of the individual financial creditors or their collective decision before the adjudicating authority, the National Company Law Tribunal (NCLT), the apex court had ruled. “That is made non-justiciable,” it said. #casansaar (Source - IBBI, The Hindu)