Insolvency regulator IBBI has framed new guidelines for setting up a panel of insolvency professionals for appointment as interim resolution professionals, liquidators, resolution professionals and bankruptcy trustees by the Adjudicating Authority (say NCLT or DRTs) with effect from July 1.

Instead of two six monthly panels for 2020-21, it has now been decided to have two panels with varying dates. The first panel under the new guidelines will have validity of 4 months and 25 days and upon its expiry, a new panel having validity of 7 months and 5 days will replace it, official sources said.

For example, the first panel under the guidelines will be valid for consideration for appointment from July 1- November 25. The next panel will be valid for being considered for appointment from November 26, 2020 to June 30, 2021.

The concept of Insolvency and Bankruptcy Board of India ( IBBI) recommending a panel of IPs is seen as useful as it helps in meeting the timeline given in the IBC. It helps avoid the unnecessary time wastage in firstly asking the IBBI to recommend the name and then appointing such IRP by the Adjudicating Authority. The process of appointment may entail 2-3 weeks, which could be saved if the Adjudicating Authority has a ready panel of IPs recommended by IBBI and it can pick up any name from the panel for appointment while issuing the order itself.

From the IBBI-recommended panel, the National Company Law Tribunal (NCLT) may pick up any name from the panel for appointment of IRP, liquidator, Resolution Professional or bankruptcy trustees for a corporate Insolvency resolution process ( CIRP), liquidation process and insolvency resolution or bankruptcy process for personal guarantors to corporate debtors.

Also, the Debt Recovery Tribunal (DRT) may pick up any name from the Panel for appointment as Resolution Professional or bankruptcy trustee for an insolvency resolution or bankruptcy process for personal guarantors to corporate debtors, as the case may be.

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