ABSTRACT
Corporate insolvency resolution in India has undergone a fundamental transformation following the enactment of The Insolvency and Bankruptcy Code, 2016 (IBC). Central to this framework is the Resolution Professional (RP), whose responsibilities extend from administering the Corporate Insolvency Resolution Process (CIRP) to preserving the debtor’s value, facilitating creditor decision-making, ensuring regulatory compliance, and addressing potential misconduct. However, increasing delays, conflicts of interest, information asymmetry, valuation concerns, procedural irregularities, and questions surrounding professional independence have exposed significant accountability challenges. This research examines the legal and ethical dimensions of RP accountability, with particular emphasis on Indian insolvency jurisprudence, regulatory developments, empirical outcomes, and institutional weaknesses. It further evaluates international approaches to insolvency administration, particularly those reflected in the United States (US), United Kingdom (UK), UNCITRAL, and World Bank frameworks. This research delineates that stronger conflict-of-interest safeguards, transparent appointments, specialized investigation mechanisms, measurable professional standards, and faster disciplinary processes to strengthen the credibility and effectiveness of India’s insolvency regime.
Keywords – Insolvency, Resolution Professional, Insolvency and Bankruptcy Code, 2016, Corporate Governance, Accountability, Institutional Reform.
INTRODUCTION
The IBC, 2016 represents a significant departure from the previous legal and institutional framework in India, which involved a multitude of overlapping laws, agencies and procedures in managing corporate distress. The IBC, 2016 seeks to establish a creditor-driven resolution process, which is time-bound and professionally administered. At the core of this resolution process is the figure of the RP, who occupies a supervisory position in relation to the corporate debtor, but who is not an employee of either the Committee of Creditors (CoC) or any other party.[1]
This creates a precarious position for the RP, who is entrusted with a number of responsibilities and powers, but who lacks a corresponding degree of decision-making autonomy. The IBC, 2016, as to sec. 17, 20, and 25, IBBI regulations, and professional standards apply to the RP, and RP is required to manage the affairs of the corporate debtor, safeguard its assets, investigate claims, constitute and facilitate the CoC, conduct the resolution process, and evaluate potential resolution plans.[2]
Thus, if the CIRP fails due to mismanagement, information withholding, conflicts of interest, valuation errors, or procedural missteps, it becomes difficult to attribute responsibility to the RP, the CoC, valuers, legal advisers, or the NCLT/ NCLAT, which oversee the process and its legal challenges. In the meantime, the IBBI has initiated a study on RPs, and IBBI’s recent focus on due diligence, revised CIRP forms and CIRP-related professional conduct suggest that the profession has reached a level of institutional complexity that requires enhanced accountability beyond mere procedural norms.[3] The IBBI’s publication list reveals a report on resolution process accountability and Parliamentary Standing Committee report on IBC, 2016 review and developments.[4]
[1] Dhruv Garg, “Navigating Corporate Insolvency: The Critical Role of Resolution Professionals in Protecting Credit”, 3 The Journal of Unique Laws and Students, 3 (2023).
[2] Abhijeet Parker, “Corporate Insolvency Resolution Process Under IBC 2016”, SSRN Electronic Journal (2020).
[3] Insolvency & Bankruptcy Board of India, Quarterly Newsletter: April–June 2025, IBBI, at 14–17 (2025).
[4] Insolvency & Bankruptcy Board of India, Research Study on Resolution Professionals, conducted by Management Development Institute, Gurgaon (2026).