Insolvency and Bankruptcy - Law and Practice · Resolution Strategies (Elective 7.5)

Duties of Resolution Professional under Section 23 IBC

Updated 11 October 2026 · Fact-checked

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

Understand Duties of Resolution Professional (Section 23)

Once a CIRP starts, the board of the corporate debtor loses control. The insolvency professional takes charge. At first this is the interim resolution professional (IRP). After the committee of creditors (CoC) confirms or replaces the IRP, the person in charge is the resolution professional (RP). Section 23 sets out what the RP does.

Section 23(1) gives the RP two jobs, subject to Section 27. First, conduct the entire CIRP. Second, manage the operations of the corporate debtor during the CIRP period. The words "entire" and "operations" matter in an answer. The RP runs both the process and the business.

Section 23(2) says the RP exercises the powers and performs the duties vested in the IRP under the same Chapter. This links to Section 20. There the IRP must make every endeavour to protect and preserve the value of the debtor's property and manage its operations as a going concern. The RP carries this forward. Section 20(2) lists the authority: appoint accountants, legal or other professionals; enter into, amend or modify contracts; raise interim finance; issue instructions to personnel; and take all actions needed to keep the debtor a going concern.

There is a safeguard on interim finance. No security interest can be created over an encumbered property without the prior consent of the creditors whose debt is secured on it. No consent is needed if the property's value is at least twice the amount of that debt.

Two more points complete the section. Under the proviso to Section 23(1), the RP keeps managing the debtor even after the CIRP period expires, until the Adjudicating Authority passes an order approving a resolution plan under Section 31(1) or appoints a liquidator under Section 34. And under Section 23(3), where an RP is appointed under Section 22(4), the IRP must hand over all information, documents and records of the debtor in his possession and knowledge to the RP.

Costs and going concern decisions are controlled by the CoC. Under Regulation 31B of the CIRP Regulations, the RP places costs incurred so far before the CoC at its first meeting. The RP also prepares a Going Concern Assessment Report. Based on it, the CoC decides whether operations continue, and for what scope and duration. After the first meeting, costs are incurred only with the CoC's prior approval.

Key rules to remember

Core duty under Section 23(1): RP conducts the entire CIRP + manages the operations of the corporate debtor during the CIRP period (subject to Section 27); Quote both limbs: process and operations. Mention Section 27, which deals with the CoC replacing the RP.
Inherited powers, Section 23(2): RP powers and duties = powers and duties of the IRP under the Chapter; Use this to bring in Section 20 on going concern, contracts, professionals and interim finance.
Continuation after the CIRP period: RP continues to manage the debtor until an order under Section 31(1) (plan approved) or Section 34 (liquidator appointed); The CIRP period expiring does not end the RP's management role.
Handover, Section 23(3): Where an RP is appointed under Section 22(4), the IRP gives the RP all information, documents and records in his possession and knowledge; This is a duty of the IRP, not the RP.
Interim finance security rule, Section 20(2)(c): No security over encumbered property without prior consent of the secured creditors, unless property value ≥ 2 × the secured debt; The twice-the-debt test removes the consent requirement.
Cost approval, Regulation 31B: Costs till the first CoC meeting: placed for approval at that meeting. After it: only with prior CoC approval; Also a Going Concern Assessment Report is placed at the first meeting, and the CoC decides on continuing operations.

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

Section 23 questions are case-based. You are given an RP's action and asked whether it was proper. Use this method.

1Identify the stage. Is the person the IRP or the RP, and is the CIRP period still running or has it expired?
2State the rule in Section 23(1): the RP conducts the entire CIRP and manages the debtor's operations, subject to Section 27.
3Link to Section 23(2) and Section 20. Name the specific power used, such as hiring professionals, amending contracts, raising interim finance or instructing personnel.
4Check conditions on that power. For interim finance on encumbered property, check secured creditor consent and the twice-the-debt exception.
5Check the CoC angle under Regulation 31B. Were costs approved at the first meeting, or by prior approval afterwards?
6Apply the facts to the rule in two or three lines, using the names and figures in the question.
7Conclude clearly: proper or improper, and what the RP should do.

Quickest way: Four-point Section 23 check

When to use it: Use when time is short and the question asks you to list or explain the RP's role.

Write Section 23(1): conduct the entire CIRP and manage operations.
Add Section 23(2): IRP powers apply, then list Section 20(2) items in one line.
Add the proviso: management continues until a Section 31(1) or Section 34 order.
Close with Regulation 31B cost control by the CoC, and the going concern report.

Common mistakes in Duties of Resolution Professional (Section 23)

Saying the RP's role ends when the 180 or 330 day period ends.
Students link the RP's role only to the timeline.
Fix: Quote the proviso to Section 23(1). The RP manages the debtor until a Section 31(1) or Section 34 order is passed.
Saying the board of directors continues to manage the debtor in a regular CIRP.
Confusion with the pre-packaged process, where the board continues under Section 54H.
Fix: In CIRP, the RP manages the operations. In the pre-pack, management stays with the board and the RP monitors it under Section 54F.
Treating interim finance as freely securable on any asset.
Students skip the proviso in Section 20(2)(c).
Fix: State that secured creditors' prior consent is needed for encumbered property, unless its value is at least twice the debt.
Forgetting Regulation 31B and saying the RP can incur any cost.
The regulation is newer and less known than the Code.
Fix: Say costs till the first CoC meeting go for approval at it, and later costs need prior CoC approval.
Giving the handover duty to the RP in Section 23(3).
Students read it as an RP duty because the section is about the RP.
Fix: The IRP must give the information, documents and records to the RP, where the RP is appointed under Section 22(4).

Worked examples

Example 1

Meridian Steels Ltd is in CIRP. The CIRP period has expired, and the CoC's resolution plan has been submitted to the Adjudicating Authority but not yet approved. The directors say the RP's role has ended and they want to resume running the plant. Advise.

Show the solution

Rule: Section 23(1) makes the RP responsible for managing the debtor's operations during the CIRP period.
The proviso to Section 23(1) says the RP continues to manage the operations after the period expires, until an order approving the plan under Section 31(1) or appointing a liquidator under Section 34 is passed.
Facts: the plan is pending and no order has been passed.
Conclusion: the RP's role has not ended.

Answer: The directors are wrong. The RP continues to manage Meridian Steels Ltd until the Adjudicating Authority passes an order under Section 31(1) or Section 34.

Example 2

The RP of Kaveri Textiles Ltd needs working capital and proposes to raise interim finance by creating security over a warehouse worth ₹8,00,000 that is already mortgaged to Bank X for a debt of ₹5,00,000. Can the RP do this without Bank X's consent?

Show the solution

Rule: Section 20(2)(c), which the RP exercises through Section 23(2), allows raising interim finance.
Condition: security over encumbered property needs the prior consent of the creditors whose debt is secured on it.
Exception: no consent is needed if the property's value is not less than twice the debt.
Compute twice the debt: 2 × ₹5,00,000 = ₹10,00,000.
Compare: the warehouse value of ₹8,00,000 is less than ₹10,00,000, so the exception does not apply.

Answer: The RP cannot create the security without Bank X's prior consent, because the warehouse value of ₹8,00,000 is below twice the debt, which is ₹10,00,000.

Exam tips

Begin every answer with the Section 23(1) wording: conduct the entire CIRP and manage operations. Examiners look for it.
Always connect Section 23(2) to Section 20. Marks are usually for naming the specific power used.
Use the facts. If the question gives figures, such as asset value and debt, show the calculation.
Contrast with the pre-packaged process when the question hints at the board continuing in management.
Mention Regulation 31B whenever costs or continuing operations appear in the facts.

Practice questions from Resolution Strategies (Elective 7.5)

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

What does Section 23 of the IBC say?

It says the resolution professional conducts the entire CIRP and manages the corporate debtor's operations during the CIRP period, subject to Section 27. The RP has the IRP's powers and duties, and continues to manage the debtor until a Section 31(1) or Section 34 order.

Does the RP manage the company after 330 days?

Yes. The proviso to Section 23(1) says the RP continues to manage the debtor after the CIRP period expires, until the Adjudicating Authority approves a plan or appoints a liquidator.

What is the difference between IRP and RP duties?

The RP exercises the powers and performs the duties of the IRP under the same Chapter. The IRP's own duties include protecting the debtor's value, and the IRP must hand over records to the RP under Section 23(3).

Who decides whether operations of the debtor continue during CIRP?

The RP prepares a Going Concern Assessment Report and places it at the first CoC meeting. Under Regulation 31B, the CoC decides whether operations continue and the scope and duration.