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

Mr. Desai is the resolution professional of Bharat Polymers Ltd. A creditor argues that, since Section 23(1) is 'subject to section 27', Mr. Desai's authority to conduct the CIRP is absolute and cannot be affected by any other provision. Another view is that Section 23(1) gives him the conduct of the entire CIRP and management of operations, but this is subject to Section 27. Which reading is correct on the text of Section 23(1)?

Section 23(1) is expressly 'subject to section 27', so the resolution professional's authority to conduct the entire CIRP and manage the corporate debtor's operations is not absolute. It operates within Section 27, and the text covers both conducting the process and managing operations.

  1. ASection 23(1) is subject to Section 27, so his authority to conduct the CIRP and manage operations is not absoluteCorrect
  2. BSection 23(1) overrides Section 27 in all cases
  3. CSection 23(1) applies only after the CIRP period ends
  4. DSection 23(1) limits him to managing operations and excludes conducting the CIRP

Explanation

Section 23(1) opens with 'Subject to section 27', so the resolution professional's conduct of the entire CIRP and management of operations is subject to Section 27. It is therefore not an absolute authority. The text covers both conducting the CIRP and managing operations, and the proviso extends it beyond the CIRP period.

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