Section 97: Appointment of Resolution Professional

Section 97 of the Insolvency and Bankruptcy Code, 2016 sets out the procedure for appointment of a resolution professional after an insolvency resolution application is filed under Section 94 or Section 95.

Current framework: The notified Part III insolvency resolution provisions operate for personal guarantors to corporate debtors. Section 97 provides the statutory mechanism for confirmation or nomination of the resolution professional in those proceedings.

Section 97 - Statutory Provision

(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.

Application Filed Through a Resolution Professional

If the Section 94 or Section 95 application is filed through a resolution professional, the Adjudicating Authority must seek confirmation from the Insolvency and Bankruptcy Board of India regarding the proposed professional. The statutory process includes the seven-day periods stated in subsections (1) and (2).

Application Filed Directly by Debtor or Creditor

Where the debtor or creditor files without using a resolution professional, Section 97(3) requires the Adjudicating Authority to direct the Board within seven days to nominate a resolution professional. Under Section 97(4), the Board is to nominate the professional within ten days after receiving that direction.

Appointment by the Adjudicating Authority

The final appointment is made by order of the Adjudicating Authority under Section 97(5), based on the professional confirmed or recommended under subsection (2), or nominated by the Board under subsection (4). The appointed resolution professional is then provided a copy of the insolvency resolution application.

Role of the Resolution Professional after Appointment

After appointment, the resolution professional performs the statutory examination required by Section 99 and submits the report recommending acceptance or rejection of the application in accordance with the Code.

Meaning of Important Terms

Resolution professional: Section 79 defines the resolution professional for Part III as an insolvency professional appointed under that Part for conducting the fresh start process or insolvency resolution process.

Board: The Board means the Insolvency and Bankruptcy Board of India established under Section 188 of the Code.

Insolvency professional: Under the Code, an insolvency professional is a person enrolled with an insolvency professional agency as its member and registered with the Board as an insolvency professional.

Adjudicating Authority: In proceedings concerning personal guarantors to corporate debtors, jurisdiction is governed by Section 60 together with the notified Part III framework.

Related Provisions

For a particular proceeding, check the official Code, commencement notifications, applicable rules, current IBBI regulations and orders of the competent Adjudicating Authority.