The Insolvency and Bankruptcy Code (IBC) of India, enacted with the overarching objective of reorganization and insolvency resolution, fundamentally aims to revive financially distressed companies rather than immediately resorting to liquidation. In essence, when a company faces insolvency, the primary endeavor is to explore avenues for resolution rather than opting for outright liquidation. The Code delineates provisions for addressing corporate insolvency and corporate liquidation, which also encompasses voluntary liquidation processes.

Corporate Insolvency Resolution Process (CIRP):

At the heart of the IBC lies the Corporate Insolvency Resolution Process (CIRP), designed as a mechanism for rejuvenating insolvent companies, typically referred to as corporate debtors. It functions akin to a protective shield for the company, granting a window of opportunity for both the debtor and creditors to devise and execute a revival plan.

Initiating CIRP:

The initiation of CIRP can be triggered by filing an application with the National Company Law Tribunal (NCLT), serving as the Adjudicating Authority. This application may be submitted by various entities, including financial creditors (for defaulted financial debt), operational creditors (for unpaid operational debt), or even by the corporate debtor itself, its shareholders, or employees.

Procedure Post-Initiation:

Upon admission of the application by the Adjudicating Authority, a crucial phase termed the 'Moratorium period' ensues. This period marks a cessation of creditor actions against the corporate debtor and prohibits the debtor from disposing of its assets. Essentially, it serves as a 'quiet period,' wherein no recovery actions, asset sales, or contract terminations can be undertaken. Concurrently, the NCLT appoints an Insolvency Professional to serve as the Interim Resolution Professional (IRP). The IRP assumes control over the corporate debtor, with the board's powers suspended, and undertakes the management of the company's affairs under the supervision of the Committee of Creditors (CoC).

Role of Resolution Professional (RP):

As per Section 22 of the IBC, during the initial CoC meeting, members deliberate on whether to continue the IRP as the Resolution Professional (RP) or appoint a new RP. Following this decision, the RP takes on various pivotal responsibilities throughout the Corporate Insolvency Process, including:

1. Management of Corporate Debtor's Affairs: The RP is tasked with overseeing day-to-day operations and managing the business as a going concern.
2. Ensuring Continuity: It is incumbent upon the RP to ensure the corporate debtor's viability and ongoing operations.
3. Asset Custodianship: The RP assumes the role of safeguarding and managing the assets of the corporate debtor during the insolvency process.
4. Conducting CoC Meetings: The RP plays a pivotal role in organizing and convening meetings of the Committee of Creditors, facilitating discussions and decision-making.
5. Engagement with Creditors: The RP collaborates closely with creditors to assess the company's financial standing and explore potential resolution strategies.
6. Adherence to Timelines: Compliance with statutory timelines prescribed under the IBC for conducting the CIRP is crucial, and the RP ensures timely execution of the process.
7. Preparation of Information Memorandum (IM): The RP is responsible for compiling essential information about the corporate debtor, which is crucial for potential resolution applicants.
8. Facilitating Resolution Plans: Lastly, the RP plays a vital role in facilitating the formulation and evaluation of resolution plans submitted by interested parties.

Throughout the CIRP, the RP serves as a linchpin, orchestrating the process with transparency, diligence, and adherence to statutory regulations. Acting as a liaison between the corporate debtor, creditors, and other stakeholders, the RP endeavors to achieve the best possible outcome for all parties involved.