CHAPTER II - CORPORATE INSOLVENCY RESOLUTION PROCESS
Section 16 of the Insolvency and Bankruptcy Code 2016: Appointment and Tenure of Interim Resolution Professional
Section 16 governs appointment of the interim resolution professional, commonly called the IRP, at the commencement of the corporate insolvency resolution process. The appointment route depends on whether CIRP is initiated by a financial creditor under Section 7, an operational creditor under Section 9, or the corporate applicant under Section 10.
Section 16(1): Appointment on the Insolvency Commencement Date
The Adjudicating Authority must appoint an interim resolution professional on the insolvency commencement date.
The uploaded earlier text stated that the IRP was to be appointed within fourteen days from the insolvency commencement date. That wording was substituted by the Insolvency and Bankruptcy Code (Amendment) Act, 2020. The current provision requires appointment on the insolvency commencement date.
Section 16(2): CIRP Initiated by a Financial Creditor
Where CIRP is initiated by a financial creditor, the resolution professional proposed in the application under Section 7 is appointed as the interim resolution professional if no disciplinary proceedings are pending against that professional.
The 2026 amendment substituted Section 16(2) so that it now deals specifically with an application made by a financial creditor. The earlier reference in this sub-section to a corporate debtor and Section 10 was removed.
Section 16(3): CIRP Initiated by an Operational Creditor
Section 16(3A): CIRP Initiated Under Section 10
Section 16(3A), inserted by the 2026 Amendment Act and effective from 26 May 2026, provides that where a CIRP application is made under Section 10, the Adjudicating Authority must make a reference to the Board for recommendation of an insolvency professional who may act as interim resolution professional.
Section 16(4): Recommendation by IBBI
Where a reference is made under Section 16(3) or Section 16(3A), the Board must recommend the name of an insolvency professional to the Adjudicating Authority within ten days of receipt of the reference. The professional recommended under Section 16(4) must not have disciplinary proceedings pending against him.
The Insolvency and Bankruptcy Board of India issued the Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) Guidelines, 2026 on 18 May 2026. These guidelines support the Board's recommendation function under the Code.
Section 16(5): How Long Does the IRP Continue?
The term of the interim resolution professional continues until the date of appointment of the resolution professional under Section 22.
The old statutory limit of thirty days from appointment is no longer the current wording. It was substituted in 2018. Section 22 governs the Committee of Creditors' decision concerning appointment of the resolution professional after constitution of the committee.
Definitions Relevant to Section 16
| Provision | Term | Meaning |
|---|---|---|
| Section 5(1) | Adjudicating Authority | For Part II of the Code, the National Company Law Tribunal constituted under the Companies Act, 2013. |
| Section 5(7) | Financial creditor | A person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred. |
| Section 5(12) | Insolvency commencement date | The date of admission of an application for initiating CIRP by the Adjudicating Authority under the applicable provision. |
| Section 5(15) | Interim resolution professional | An insolvency professional appointed under Section 16. |
| Section 5(20) | Operational creditor | A person to whom an operational debt is owed and includes a person to whom such debt has been legally assigned or transferred. |
| Section 5(27) | Resolution professional | An insolvency professional appointed to conduct CIRP and includes an interim resolution professional. |
For other Part II definitions, see Section 5 of the IBC.
Appointment Route Under Current Section 16
| CIRP applicant | Provision | IRP appointment route |
|---|---|---|
| Financial creditor | Sections 7 and 16(2) | Professional proposed in the Section 7 application is appointed if no disciplinary proceedings are pending. |
| Operational creditor proposing an IRP | Sections 9(4) and 16(3)(b) | Proposed professional is appointed if no disciplinary proceedings are pending. |
| Operational creditor not proposing an IRP | Section 16(3)(a) | NCLT refers to IBBI for recommendation. |
| Corporate applicant | Sections 10 and 16(3A) | NCLT refers to IBBI for recommendation under the 2026 framework. |
Relationship With Sections 13, 17, 18 and 22
Section 13 requires appointment of the IRP following admission of CIRP. After appointment, Section 17 governs management of the corporate debtor by the IRP, while Section 18 prescribes the IRP's duties. Section 22 deals with appointment of the resolution professional by the Committee of Creditors.
Official Legal Resources
For the current Code, amendments, regulations and IBBI guidelines, refer to the India Code portal, IBBI Legal Framework, IBBI Acts, IBBI Notifications, IBBI Regulations and IBBI Guidelines.