The Insolvency and Bankruptcy Board of India (IBBI) and Insolvency Professional Agencies (IPAs) have come across, some mistakes being committed by some of the Insolvency Professionals (IPs) in conduct of Corporate Insolv

Mistakes committed by IPs: Appointment of Professionals It is the duty of the Resolution professional (RP) to preserve and protect the assets of the Corporate Debtor (CD), including continuing its business operations. Section 25(2) of the Code empowers an RP to appoint accountants, legal or other professionals for this purpose. Clause 23B of the Code of Conduct under the IBBI (Insolvency Professionals) Regulations, 2016 prohibits an IP from engaging or appointing any of his relatives or related parties for or in connection with any work relating to any of his assignment. An IP is, therefore, required to satisfy himself that there is a need for services of a professional; such services are not available within the CD; the person is qualified to render professional service; the professional to be appointed is suitable for the purpose; the professional is not a relative or related party of the IP; the fee to be paid to the professional is reasonable; etc. RP needs to apply his mind to these and other related aspects while appointing a professional. RP must not appoint any person who is not a professional, or who is his relative or a related party, or who is choice of a stakeholder. RP must not appoint a professional to provide services to a stakeholder, or a professional because a stakeholder wants that professional to be appointed. There are instances where the RP appointed a professional who is the choice of a stakeholder or a person who is not a professional for professional services. This compromises the independence of the IP as well as that of the professionals and imposes avoidable cost on the CD and other stakeholders.