Ancy Jacob & Rishla Jabbar
8th Semester Students, B.Com, LL.B (Hons.),
School of Legal Studies, CUSAT
The Insolvency and Bankruptcy code which was notified by the government on may 28 2016, came as a transformational piece of legislation at a very crucial time when Indian financial institutions and other business entities were struggling to cope up with a welter of bad loans. Due to the complexity of multiple laws the entire resolution procedure was fragmented, tedious and expensive with a very low recovery rate. The code revamped the existing legal framework and aims to have an overriding effect over the various laws pertaining to insolvency and bankruptcy such as Limited Liability Act 2008, Companies Act 1956, provincial insolvency Act 1920, SARFAESI, SICA etc. IBC aims at the promotion of entrepreneurship, availability of credit and balancing of stakeholder interests, by facilitating time bound restructuring and bankruptcy of debtors. It is a consolidated and comprehensive piece of legislation for the resolution of insolvency in respect of companies, Limited Liability Partnerships (LLPs), Partnership firms and individuals and most importantly offers an exit plan to all categories of persons. One of the significant features of the code is that it provides for creation of a very new class of professionals i.e. insolvency professionals. Section 3(19) of I&B code 2016,defines IPs as persons enrolled under sec.206 with an insolvency resolution agency as its members and registered with the Board as an insolvency professional under sec.207. Chapter IV of the code read with I&B code provides for regulations to IPs with respect to qualifications, experience and thus exercise authoritarian control over them. IP is a professional endowed with specialized knowledge and training appointed to undertake the insolvency resolution process for all categories of persons in accordance with the provisions laid down in the IBC, 2016. IPs under the code, have been embellished with different names and carry out different roles such as a resolution professional, bankruptcy trustee and liquidator. This paper aims at presenting a judicious study on the role of insolvency professional through discussing their position in the case of insolvency procedure of individuals, partnership firms and companies, their functions, duties and responsibilities and challenges faced by them while assuming this position. It is indispensable to have a study on the role of professionals, as they are pillars of strength who cater to the needs of this institutional infrastructure. The efficiency of the specialized cadre of insolvency professionals will usher in a new era of corporate insolvency in India.
Keywords: Limited Liability Act 2008, Companies Act 1956, IBC, Provincial insolvency Act 1920, SARFAESI, SICA