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

Sharma Textiles Ltd is admitted into CIRP on an application by a financial creditor, Bank A. The application under section 7 proposed Mr. Rao as the resolution professional, and no disciplinary proceedings are pending against him. Whom should the Adjudicating Authority appoint as the interim resolution professional?

The Adjudicating Authority should appoint Mr. Rao. When a financial creditor's application proposes a resolution professional and no disciplinary proceedings are pending against that person, the proposed professional is appointed as interim resolution professional. No Board reference or creditor election is needed.

  1. AMr. Rao, the professional proposed in the applicationCorrect
  2. BA person chosen by the corporate debtor's board of directors
  3. CA professional recommended by the Board on a reference from the Adjudicating Authority
  4. DA person elected at the first meeting of the committee of creditors

Explanation

Where a financial creditor files the application, the resolution professional proposed in the section 7 application is appointed as IRP, provided no disciplinary proceedings are pending against him. A reference to the Board arises only for an operational creditor's application with no proposal. The CoC does not elect the IRP.

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