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CS Professional · Insolvency and Bankruptcy - Law and Practice · Corporate Insolvency Resolution Process

The CoC of Malabar Foods Ltd resolves to replace the RP with Mr. Iyer. However, disciplinary proceedings are pending against Mr. Iyer. What is the position under section 27?

The existing resolution professional appointed under section 22 continues in office until another professional is appointed under section 27. Pending disciplinary proceedings against the proposed replacement prevent the changeover, but they do not hand control back to management or end the CIRP.

  1. AMr. Iyer is appointed immediately with interim powers
  2. BThe corporate debtor's management resumes control of operations
  3. CThe RP appointed under section 22 continues until another professional is appointed under the sectionCorrect
  4. DThe CIRP stands terminated and liquidation begins

Explanation

Section 27(5) provides that where disciplinary proceedings are pending against the proposed professional, the RP appointed under section 22 continues till the appointment of another professional under the section. The Code does not provide for management resuming control or for termination of CIRP in this situation.

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