IBC Section 97: Appointment of resolution professional

Section 97 of Insolvency and Bankruptcy Code, 2016: Appointment of resolution professional

Official Bare Act Text

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

(1) If the application under section 94 or 95 is filed through a resolution professional, the Adjudicating Authority shall direct the Board within seven days of the date of the application to confirm that there are no disciplinary proceedings pending against resolution professional.

(2) The Board shall within seven days of receipt of directions under sub-section (1) communicate to the Adjudicating Authority in writing either-

(a) confirming the appointment of the resolution professional; or

(b) rejecting the appointment of the resolution professional and nominating another resolution professional for the insolvency resolution process.

(3) Where an application under section 94 or 95 is filed by the debtor or the creditor himself, as the case may be, and not through the resolution professional, the Adjudicating Authority shall direct the Board, within seven days of the filing of such application, to nominate a resolution professional for the insolvency resolution process.

(4) The Board shall nominate a resolution professional within ten days of receiving the direction issued by the Adjudicating Authority under sub-section (3).

(5) The Adjudicating Authority shall by order appoint the resolution professional recommended under sub-section (2) or as nominated by the Board under sub-section (4).

(6) A resolution professional appointed by the Adjudicating Authority under sub-section (5) shall be provided a copy of the application for insolvency resolution process.

Legal Commentary & Landmark Judgments: Section 97

Section 97 regulates the appointment of the Resolution Professional for individual and personal guarantor insolvency resolution processes under Chapter III of Part III.

Appointment Upon Application: If the insolvency application is filed by the debtor or creditor through an RP, the Adjudicating Authority directs IBBI to confirm clean disciplinary record.
Direct Filing Nomination: If filed directly without an RP, the Adjudicating Authority directs the IBBI to nominate an RP within seven days.
Tenure of RP in Chapter III: The RP examines the application under Section 99, oversees public notices under Section 102, and facilitates the repayment plan under Section 105.

Key Landmark Precedents:

Dilip B. Jiwrajka v. Union of India (2024) 5 SCC 436: A 3-Judge Bench held that Section 97 is a purely facilitative step appointing an officer of the court; the appointment of an RP does not operate as an adjudication on the merits of the insolvency application.
Lalit Kumar Jain v. Union of India (2021) 9 SCC 321: Affirmed that the nomination of RPs through the IBBI under Section 97 ensures professional neutrality in personal guarantor proceedings.

Courtroom Practice & Strategic Litigation Guidance:

In Section 94/95 personal guarantor applications, always attach the written consent (Form A) of the proposed RP with a valid Authorization for Assignment (AFA) to secure an immediate appointment order under Section 97.