IBC Section 91: Revocation of order admitting application

Section 91 of Insolvency and Bankruptcy Code, 2016: Revocation of order admitting application

Official Bare Act Text

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

(1) The resolution professional may submit an application to the Adjudicating Authority seeking revocation of its order made under section 84 on the following grounds, namely :-

(a) if due to any change in the financial circumstances of the debtor, the debtor is ineligible for a fresh start process; or

(b) non-compliance by the debtor of the restrictions imposed under sub-section (3) of section 85; or

(c) if the debtor has acted in a mala fide manner and has wilfully failed to comply with the provisions of this Chapter.

(2) The Adjudicating Authority shall, within fourteen days of the receipt of the application under subsection (1), may by order admit or reject the application.

(3) On passing of the order admitting the application referred to in sub-section (1), the moratorium and the fresh start process shall cease to have effect.

(4) A copy of the order passed by the Adjudicating Authority under this section shall be provided to the Board for the purpose of recording an entry in the register referred to in section 196.

Legal Commentary & Landmark Judgments: Section 91

Section 91 provides for the replacement of the Resolution Professional during the Fresh Start Process by the Adjudicating Authority on application by the debtor, creditor, or the RP himself.

Grounds for Replacement: Where the RP is unable to act, desires to be discharged, or is guilty of bias, neglect, or misconduct.
Reference to IBBI: The Adjudicating Authority shall direct the IBBI to nominate another resolution professional within seven days.
Appointment of Successor RP: Upon receiving nomination from the Board, the court appoints the successor RP who assumes all pending duties.

Key Landmark Precedents:

Dilip B. Jiwrajka v. Union of India (2024) 5 SCC 436: The Supreme Court noted that Section 91 provides institutional flexibility to replace resolution professionals where conflicts of interest or professional incapacity arise.
Lalit Kumar Jain v. Union of India (2021) 9 SCC 321: Affirmed that replacement procedures under Section 91 maintain the integrity and credibility of the insolvency resolution framework.

Courtroom Practice & Strategic Litigation Guidance:

If an RP shows patent bias, fails to submit reports within statutory deadlines, or demands unauthorized fees from an indigent debtor, move an application under Section 91 before the DRT for immediate replacement.