Corporate Restructuring, Valuation and Insolvency · Role, Functions and Duties of IP, IRP and RP

Standard of Conduct and Code of Conduct for Insolvency Professionals

Updated 11 October 2026 · Fact-checked

Sections 93 and 120 of the IBC require the resolution professional in individual and firm insolvency processes, and section 143 the bankruptcy trustee, to comply with the code of conduct under section 208. For a corporate process, rely on section 208 and the IBBI regulations. A breach can lead to disciplinary action by the IPA or IBBI, including suspension or cancellation.

Understand Standard of Conduct and Code of Conduct for IPs

An insolvency professional (IP) handles other people's money and rights. Creditors, the debtor and the Adjudicating Authority all rely on the IP to act fairly. The Code therefore sets a standard of conduct, so that every IP is judged against one benchmark.

The Code does not list the conduct rules inside these sections. Each section simply points to the code of conduct provided under section 208. The wording is the same each time: the professional "shall perform his functions and duties in compliance with the code of conduct provided under section 208".

The three sections cover two roles:

Section 93: the resolution professional must comply with the code of conduct under section 208. It sits in Part III of the Code, so it applies to the RP in the individual and firm insolvency processes.
Section 120: the resolution professional must comply with the code of conduct under section 208. It also sits in Part III, so it applies to the RP in the individual and firm insolvency processes.
Section 143: the bankruptcy trustee must comply with the code of conduct under section 208.

For a resolution professional in a corporate insolvency resolution process (CIRP), or for an IP in any other role, rely on the code of conduct under section 208 and the IBBI regulations, and do not cite sections 93 and 120. In your answer, say that the Code of Conduct is the working benchmark and that it is contained in the IBBI regulations. Do not quote a clause number of the Code of Conduct unless you are sure of it.

Who enforces it? The IBBI (the Board) registers IPs and can specify standards for their functioning, inspect and investigate them, monitor their performance, call for records, and pass orders on complaints (section 196). The insolvency professional agency (IPA) grants membership, lays down standards of professional conduct, monitors members, and can suspend or cancel membership on the grounds in its bye-laws (section 204). It also redresses grievances against its members.

So the chain is simple: the Code sets the duty, the IPA and the IBBI watch compliance, and a breach leads to disciplinary action such as suspension or cancellation of membership or registration, as provided in the bye-laws and regulations.

Key rules to remember

Standard of conduct for RP (individual and firm processes): Sections 93 and 120: the RP in the individual and firm insolvency processes must perform functions and duties in compliance with the code of conduct under section 208; Same wording in both sections. Quote the phrase "code of conduct provided under section 208". For a CIRP, cite section 208 and the IBBI regulations instead.
Standard of conduct for bankruptcy trustee: Section 143: bankruptcy trustee must comply with the code of conduct under section 208; Do not forget the trustee; the heading covers more than the RP.
Board's powers over IPs: Section 196: register, inspect, investigate, monitor, call for records, pass orders on complaints; The Board also has civil court powers under section 196(3), such as summoning persons and examining them on oath.
IPA's functions: Section 204: grant membership, lay down conduct standards, monitor, suspend or cancel membership, redress grievances; Suspension or cancellation is on the grounds set out in the IPA's bye-laws.
Principles for registering an IPA: Section 200: promote competent IPs, good professional and ethical conduct, protect interests of debtors and creditors; Useful to show the purpose behind conduct rules.

How to solve Standard of Conduct and Code of Conduct for IPs questions

Use this method for any question on standard of conduct or disciplinary action against an IP.

1Identify the role in the facts: resolution professional (corporate, individual or firm process), liquidator, bankruptcy trustee or IP in general.
2State the provision: the code of conduct under section 208. Cite sections 93 or 120 only for an RP in the individual or firm insolvency processes, and section 143 for a bankruptcy trustee. For a CIRP, cite section 208 and the IBBI regulations.
3Pick out the conduct in the facts that may breach the Code, such as conflict of interest, lack of independence, concealing information, or acting without due care.
4Apply the principle: an IP must act with integrity, independence and impartiality, and must keep to the Code while performing duties.
5Identify who can act: the IPA under section 204 and the IBBI under section 196.
6Conclude with the likely consequence: inquiry, order on the complaint, and suspension or cancellation of membership or registration as per the bye-laws and regulations.
7Add a practical point: records, disclosures and written reasons the IP should keep.

Quickest way: Provision, breach, forum, consequence

When to use it: Short case questions where you have about ten minutes.

Write the section for the role and quote "code of conduct provided under section 208".
Name the one or two facts that breach the Code.
Name the forum: IPA (section 204) and IBBI (section 196).
State the consequence and close with advice to the IP.

Common mistakes in Standard of Conduct and Code of Conduct for IPs

Writing that Sections 93, 120 and 143 contain the detailed conduct rules.
Students assume a heading like "Standard of conduct" lists the rules.
Fix: State that these sections only require compliance with the code of conduct under section 208. The detailed rules sit in the Code of Conduct under the IBBI regulations.
Mentioning only the resolution professional.
Most study focuses on CIRP.
Fix: Mention that section 143 applies the same standard to the bankruptcy trustee, and that the same discipline applies across IP roles.
Saying only the IBBI can discipline an IP.
The IBBI is the better known body.
Fix: Show both: the IPA can suspend or cancel membership under section 204, and the IBBI can inspect, investigate and pass orders under section 196.
Quoting clause numbers of the Code of Conduct from memory.
Students try to look precise.
Fix: Use the principles in plain words unless you are sure of the clause number. A wrong number costs marks.
Stopping at the breach without a conclusion.
Students describe the facts and forget the consequence.
Fix: End with the forum and the possible action, and add a drafting or compliance point.

Worked examples

Example 1

An insolvency professional appointed as resolution professional of a company in Pune accepts a fee arrangement with one financial creditor outside the process and does not disclose it to the other creditors. Advise on the position under the Code.

Show the solution

Role: the person is a resolution professional in a corporate process.
Provision: the RP must act in line with the code of conduct provided under section 208 and the IBBI regulations. Do not cite sections 93 and 120 here. They sit in Part III and apply to the RP in the individual and firm insolvency processes.
Breach: a private arrangement with one creditor and non-disclosure to others affects independence, impartiality and transparency, which the Code of Conduct requires.
Forum: the IPA of which the RP is a member can monitor and act on the grievance and may suspend or cancel membership on the grounds in its bye-laws (section 204). The IBBI can investigate and pass orders on complaints (section 196).
Practical point: the RP should disclose all arrangements in writing and keep records of them.

Answer: The arrangement is likely to be a breach of the Code of Conduct. The RP can face an inquiry, orders on the complaint, and suspension or cancellation of membership or registration.

Example 2

Explain who monitors the conduct of insolvency professionals and what functions each body has for this purpose.

Show the solution

Start with the duty: IPs must comply with the code of conduct under section 208. Sections 93 and 120 apply this to the RP in the individual and firm insolvency processes, and section 143 to the bankruptcy trustee. For a CIRP, the duty comes from section 208 and the IBBI regulations.
IPA under section 204: grants membership, lays down standards of professional conduct, monitors performance of members, suspends or cancels membership on the grounds in its bye-laws, and redresses grievances against its members.
IBBI under section 196: registers IPs and can renew, withdraw, suspend or cancel registration, specifies standards for their functioning, carries out inspections and investigations, monitors performance, calls for information and records, and passes orders on complaints.
Powers: while exercising its powers, the Board has civil court powers for discovery of documents, summoning and examining persons on oath, inspection, and issuing commissions (section 196(3)).
Conclude: the IPA is the first line of discipline for members; the IBBI is the regulator with wider powers over IPs, IPAs and information utilities.

Answer: The IPA monitors its members and can suspend or cancel membership (section 204). The IBBI inspects, investigates, passes orders on complaints and can suspend or cancel registration (section 196).

Exam tips

Always quote the phrase "code of conduct provided under section 208" and link it to the role in the question.
When the question is about sections 93, 120 and 143, cover both roles they name: the resolution professional and the bankruptcy trustee. Do not cite them for a liquidator.
Name both the IPA (section 204) and the IBBI (section 196) when asked about discipline.
Use the structure: provision, facts, breach, forum, consequence.
Do not invent clause numbers of the Code of Conduct. Describe the principle instead.

Practice questions from Role, Functions and Duties of IP, IRP and RP

Standard of Conduct and Code of Conduct for IPs in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Standard of Conduct and Code of Conduct for IPs: frequently asked questions

What do Sections 93, 120 and 143 of the IBC say?

Sections 93 and 120 say the resolution professional must perform functions and duties in compliance with the code of conduct under section 208. They sit in Part III, so they apply to the RP in the individual and firm insolvency processes. Section 143 says the same for the bankruptcy trustee. For a CIRP, cite section 208 and the IBBI regulations.

Where is the actual Code of Conduct for IPs found?

The sections refer to the code of conduct under section 208. The detailed rules are in the IBBI regulations. In the exam, explain the principles in plain words unless you are sure of a clause number.

Who can take disciplinary action against an insolvency professional?

The insolvency professional agency can suspend or cancel membership on the grounds in its bye-laws (section 204). The IBBI can inspect, investigate, pass orders on complaints and suspend or cancel registration (section 196).

Do Sections 93, 120 and 143 apply to a liquidator?

No. These sections name only the resolution professional and the bankruptcy trustee, so do not cite them for a liquidator. For other roles, rely on the code of conduct under section 208 and the IBBI regulations, and use the provisions on that role from your study material.