IBC Section 23: Resolution professional to conduct corporate insolvency resolution process

Section 23 of Insolvency and Bankruptcy Code, 2016: Resolution professional to conduct corporate insolvency resolution process

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

(1) Subject to section 27, the resolution professional shall conduct the entire corporate insolvency resolution process and manage the operations of the corporate debtor during the corporate insolvency resolution process period:

Provided that the resolution professional shall, if the resolution plan under sub-section (6) of section 30 has been submitted, continue to manage the operations of the corporate debtor after the expiry of the corporate insolvency resolution process period until an order is passed by the Adjudicating Authority under section 31.

(2) The resolution professional shall exercise powers and perform duties as are vested or conferred on the interim resolution professional under this Chapter.

(3) In case of any appointment of a resolution professional under sub-section (4) of section 22, the interim resolution professional shall provide all the information, documents and records pertaining to the corporate debtor in his possession and knowledge to the resolution professional.

Legal Commentary & Landmark Judgments: Section 23

Section 23 establishes the authority and continuity of the Resolution Professional to conduct the entire Corporate Insolvency Resolution Process and manage corporate operations until plan approval or liquidation.

Resolution Professional: The Resolution Professional is mandated to conduct the CIRP, manage the debtor's business as a going concern, exercise all powers of the board of directors, and supervise corporate operations.
Statutory Powers & Jurisdiction: By the 2019 amendment, the Resolution Professional is statutorily required to continue managing corporate operations even after the expiry of the CIRP period until the Adjudicating Authority passes an order approving the resolution plan or appointing a liquidator under Section 33.

Key Landmark Precedents:

Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta (2020) 8 SCC 531: Held that the Resolution Professional is the operational linchpin of CIRP, responsible for ensuring that the corporate debtor remains a going concern and verifying that resolution plans comply with all statutory requirements.

Legal Commentary:

Section 23 prevents institutional paralysis during corporate transitions. By mandating that the RP remain in control until final judicial disposition, the statute eliminates governance vacuums between the conclusion of CoC voting and final NCLT approval.