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Corporate Restructuring, Valuation and Insolvency · Resolution Strategies

Duties of Resolution Professional under Section 23 IBC

Updated 11 October 2026 · Fact-checked

Under Section 23 of the IBC, the resolution professional conducts the entire corporate insolvency resolution process and manages the corporate debtor's operations during it. The RP also exercises the interim resolution professional's powers and duties, and continues to manage the debtor until the Adjudicating Authority passes an approval or liquidation order.

Understand Duties of Resolution Professional (Section 23)

When a corporate insolvency resolution process (CIRP) starts, the board of the corporate debtor stops running the company. Someone neutral must take over, keep the business alive and run the process for creditors. That person is the resolution professional (RP). Section 23 is the main provision that gives the RP this job.

Section 23(1) says that, subject to section 27, the RP conducts the entire CIRP and manages the operations of the corporate debtor during the CIRP period. Section 27 deals with replacement of the RP by the committee of creditors, which is why section 23 is made subject to it.

Section 23(2) says the RP exercises the powers and performs the duties vested in the interim resolution professional (IRP) under the same Chapter. The IRP is the person who holds the fort at the start. So you read section 23 together with the IRP's duties. Section 20 is the key one: the IRP must make every endeavour to protect and preserve the value of the property of the corporate debtor and manage its operations as a going concern.

Section 20(2) lists the authority this involves. It covers appointing accountants, legal or other professionals; entering into, amending or modifying contracts; raising interim finance; issuing instructions to personnel; and taking all actions necessary to keep the debtor a going concern. On interim finance, no security interest can be created over an encumbered property without the prior consent of the secured creditors. That consent is not needed if the property's value is at least twice the amount of the debt.

Two more points matter. First, the proviso to section 23(1) says the RP continues to manage the debtor even after the CIRP period expires, until the Adjudicating Authority passes an order approving the resolution plan under section 31(1) or appointing a liquidator under section 34. So there is no gap in management. Second, under section 23(3), where an RP is appointed under section 22(4), the IRP must hand over all information, documents and records in his possession and knowledge to the RP.

Key rules to remember

Core duty (Section 23(1))
RP conducts entire CIRP + manages operations of corporate debtor during CIRP period
Subject to section 27. Say 'entire process' and 'operations' in your answer.
Continuity proviso (Section 23(1))
RP continues to manage after CIRP period ends, until order under section 31(1) (plan approval) or section 34 (liquidator appointed)
The trigger is the Adjudicating Authority's order, not the end of the time limit.
Powers of IRP (Section 23(2))
RP exercises powers and performs duties of IRP under this Chapter
Link to section 20 powers for going concern management.
Handover (Section 23(3))
If RP appointed under section 22(4), IRP gives all information, documents and records to RP
Applies only where a new RP is appointed under section 22(4).
Going concern powers (Section 20(2))
Appoint professionals; enter into or amend contracts; raise interim finance; instruct personnel; take all necessary actions
Five heads. Learn them as a list.
Interim finance security condition (Section 20(2)(c))
Security over encumbered property needs prior consent of secured creditors, unless property value ≥ 2 × debt
Exception applies only when value is not less than twice the debt.

How to solve Duties of Resolution Professional (Section 23) questions

Section 23 questions are case based. Use a provision, analysis, conclusion structure and tie each fact to a specific power or duty.

  1. 1Identify the stage. Is the CIRP running, has the CIRP period expired, or has the IRP just been replaced by an RP?
  2. 2State the rule: section 23(1) gives the RP the entire CIRP and management of operations, subject to section 27.
  3. 3Add the linked provision. For going concern issues, bring in section 20 and its five heads of authority.
  4. 4Match each fact in the question to a head: hiring a professional, amending a contract, raising interim finance, instructing staff, or another necessary action.
  5. 5Check conditions. For interim finance, test whether the secured creditors' consent is needed or the twice-the-debt exception applies.
  6. 6Check timing. If the CIRP period has expired, apply the proviso: the RP continues until a section 31(1) or section 34 order.
  7. 7Check handover or misconduct points: section 23(3) for IRP to RP handover, section 70 where officers withhold information or property.
  8. 8Conclude clearly: say whether the RP's action is within authority and what the RP should do next.

Quickest way: Four-line Section 23 answer

When to use it: Use when time is short or the question asks you to simply state the RP's role or powers.

  1. Line 1: RP conducts the entire CIRP and manages the debtor's operations (section 23(1), subject to section 27).
  2. Line 2: RP exercises the IRP's powers and duties (section 23(2)); core aim is going concern and value preservation (section 20).
  3. Line 3: Management continues after the CIRP period until a section 31(1) or section 34 order (proviso).
  4. Line 4: IRP hands over information and records where a new RP is appointed under section 22(4) (section 23(3)).

Common mistakes in Duties of Resolution Professional (Section 23)

  • Saying the RP's authority ends when the CIRP period expires.

    Students link authority to the time limit alone.

    Fix: Quote the proviso: the RP continues until an order under section 31(1) or section 34 is passed.

  • Treating section 23 as the only source of the RP's powers.

    The section is short, so students stop there.

    Fix: Section 23(2) imports the IRP's powers. Always cite section 20 for going concern management.

  • Saying the RP needs creditor consent for every interim finance security.

    Students remember the consent rule but forget the exception.

    Fix: Consent of secured creditors is needed for encumbered property, except where its value is not less than twice the debt.

  • Forgetting 'subject to section 27'.

    It looks like a minor opening phrase.

    Fix: Mention it. The CoC can replace the RP under section 27, so the RP's role is not unconditional.

  • Confusing the CIRP RP's role with the RP in a pre-packaged process under section 54F.

    Both use the term resolution professional.

    Fix: In a pre-pack, the board continues to manage affairs under section 54H and the RP monitors. In CIRP, the RP manages operations.

  • Giving general advice without applying the facts.

    Students recite the section from memory.

    Fix: Quote the rule briefly, then link each fact to a head of authority and conclude.

Worked examples

Example 1

Sunrise Textiles Ltd is under CIRP. The 180-day period has expired, but the Adjudicating Authority has not yet passed any order on the resolution plan placed before it. The directors say the RP's role has ended and they want to resume management. Advise.

Show the solution
  1. Provision: section 23(1) makes the RP responsible for the entire CIRP and the management of the debtor's operations.
  2. Proviso to section 23(1): the RP continues to manage operations after the CIRP period expires, until an order approving the plan under section 31(1) or appointing a liquidator under section 34 is passed.
  3. Analysis: the period has expired, but neither order has been passed. So the condition for the RP's continued management still holds.
  4. Conclusion: the directors cannot resume management. The RP continues until the Adjudicating Authority passes one of the two orders.

Answer: The directors are wrong. The RP continues to manage Sunrise Textiles after expiry of the CIRP period until an order under section 31(1) or section 34 is passed.

Example 2

During CIRP of Bharat Components Ltd, the RP wants to raise interim finance of ₹4,00,000 and create security over a machine worth ₹10,00,000 that is already mortgaged to Canara Bank for a debt of ₹6,00,000. Does the RP need the bank's prior consent?

Show the solution
  1. Provision: section 20(2)(c) lets the IRP, and through section 23(2) the RP, raise interim finance. No security can be created over encumbered property without prior consent of the creditors whose debt it secures.
  2. Exception: no consent is needed where the property's value is not less than twice the amount of the debt.
  3. Compute twice the debt: 2 × ₹6,00,000 = ₹12,00,000.
  4. Compare: the machine is worth ₹10,00,000, which is less than ₹12,00,000.
  5. Conclusion: the exception does not apply, so consent is required.

Answer: Yes. Since ₹10,00,000 is less than twice the secured debt of ₹6,00,000 (₹12,00,000), the RP needs Canara Bank's prior consent before creating security over the machine.

Exam tips

  • Start every answer with section 23(1) and its words 'entire corporate insolvency resolution process' and 'operations'.
  • Always pair section 23 with section 20 when the question mentions going concern, contracts, staff or interim finance.
  • If dates are given, test the proviso: has an order under section 31(1) or section 34 been passed?
  • Do the arithmetic on the twice-the-debt test and show it. Marks follow the working.
  • If an officer hides records or property, add section 70, which carries imprisonment of three to five years or a fine of ₹1,00,000 to ₹1,00,00,000 or both, unless the officer proves no intent.

Practice questions from Resolution Strategies

Duties of Resolution Professional (Section 23): frequently asked questions

What does Section 23 of the IBC say in simple words?

It makes the resolution professional responsible for the whole CIRP and for running the corporate debtor's operations during it. The RP also has the powers and duties of the interim resolution professional. Management continues until the Adjudicating Authority approves a plan or appoints a liquidator.

How does the RP run the corporate debtor as a going concern?

Through the authority in section 20(2), which the RP exercises under section 23(2). The RP can appoint professionals, enter into or amend contracts, raise interim finance, instruct personnel and take other necessary actions. The aim is to protect and preserve the value of the debtor's property.

Does the RP's role end when the CIRP period ends?

No. The proviso to section 23(1) says the RP continues to manage the debtor's operations until the Adjudicating Authority passes an order under section 31(1) approving a plan or under section 34 appointing a liquidator.

What is the difference between the IRP and the RP?

The IRP is appointed at the start of the process and manages the debtor until an RP is confirmed. The RP then conducts the process and exercises the IRP's powers under section 23(2). Where a new RP is appointed under section 22(4), the IRP must hand over all information, documents and records under section 23(3).