IBC Resolution Professional Support

No. PNPC is not appointed as the Resolution Professional — that role requires the individual to be a Registered Insolvency Professional with the IBBI, a distinct regulatory qualification. PNPC provides the financial advisory, accounting, forensic, and reporting support that the RP relies on to discharge statutory duties: claims verification, Information Memorandum financial sections, forensic transaction review, and resolution plan evaluation. We work as the RP's (or the CoC's) financial advisory team, not as the statutory office-holder.

Both, in different capacities. Most commonly, the RP engages PNPC directly as part of the professional team, with the fee and scope approved by the Committee of Creditors under Regulation 34/34B of the IBBI (CIRP) Regulations. Separately, an individual financial creditor sitting on the CoC sometimes engages PNPC independently — to interrogate the RP's numbers, evaluate resolution plans from that creditor's own perspective, or substantiate its claim during the claims process.

The CoC comprises all financial creditors of the corporate debtor, with voting share proportionate to the financial debt owed to each. It is constituted by the RP based on the claims admitted from financial creditors after the claims verification exercise. The CoC exercises key decision-making powers during CIRP — approving the RP's fee, approving resolution plans by the requisite voting threshold (66% for most key decisions, 51% for certain routine matters), and deciding whether to extend the CIRP timeline or move to liquidation.

The Information Memorandum (IM) is the document the RP prepares under Regulation 36 of the IBBI (CIRP) Regulations, giving prospective resolution applicants a complete picture of the corporate debtor — assets, liabilities, business operations, litigation, and financial history — so they can prepare informed resolution plans. The financial sections are what applicants price their offers against. If the numbers in the IM later prove inaccurate during an applicant's own due diligence, it can derail negotiations, invite renegotiation of an accepted plan, or expose the process to later challenge.

The Code allows 180 days from the date of NCLT admission for the CIRP to conclude, extendable once by up to 90 days on the CoC's application to the Adjudicating Authority, with an overall outer limit of 330 days (including time excluded for litigation) as clarified by the Supreme Court in the Essar Steel judgment. In practice, many CIRPs run beyond 330 days due to litigation, but the statutory framework treats that as the exception, not the norm. Every financial advisory workstream — claims processing, IM drafting, forensic review, plan evaluation — has to be sequenced to fit inside this compressed and often litigated timeline.

A preferential transaction is a transfer of property or an interest by the corporate debtor, for the benefit of a creditor, surety, or guarantor, in respect of an existing financial or operational debt, that puts that creditor in a beneficial position compared to the distribution they would have received under Section 53 in a liquidation — made within the look-back period preceding the insolvency commencement date. The look-back period is one year for transactions with unrelated parties and two years for transactions with related parties, under Section 46. Identifying preferential transactions requires reconstructing the corporate debtor's transaction history for that period and testing each significant payment or transfer against this framework.

These are four distinct avoidance categories under the Code, each with its own test. Preferential transactions (Section 43) favour one creditor over others in the look-back period. Undervalued transactions (Section 45) involve the corporate debtor transferring an asset for significantly less than its value, without a legitimate business justification. Extortionate credit transactions (Section 50) involve credit terms that are exorbitant relative to the risk, within two years of the insolvency commencement date. Fraudulent or wrongful trading (Section 66) involves business conducted with intent to defraud creditors, or continued trading despite the directors knowing there was no reasonable prospect of avoiding insolvency. Each requires a different forensic and legal test, and the RP's application to the Adjudicating Authority must be framed under the correct section.

After the public announcement of CIRP commencement, creditors submit claims in the prescribed form — Form B for financial creditors, Form C for operational creditors other than workmen and employees, Form D for workmen, Form E for employees, and Form F for other creditors — within the timeline stated in the public announcement (typically 14 days, though this can be relaxed by the Adjudicating Authority in specific circumstances). Each claim must be supported by documentary evidence — invoices, loan agreements, statutory dues notices, or employment records as applicable. The RP (or the RP's financial team) then verifies each claim against the corporate debtor's own books and either admits, rejects, or provisionally admits it, with reasons recorded.

A creditor aggrieved by the RP's decision on its claim can approach the National Company Law Tribunal (Adjudicating Authority) under Section 60(5), which has jurisdiction over such disputes arising during CIRP. This is a legal remedy, and it consumes time within the already compressed CIRP clock — which is precisely why getting the claim right, with full documentary support, at the point of submission matters more than planning to litigate a rejection later.

On admission of the CIRP application, the Adjudicating Authority declares a moratorium under Section 14, which prohibits the institution or continuation of suits against the corporate debtor, prevents transferring, encumbering, or disposing of the corporate debtor's assets, and suspends the enforcement of security interests, among other restrictions, for the CIRP period. From a financial reporting perspective, this means the corporate debtor's financial position is effectively frozen from a legal-enforcement standpoint even as operations may continue as a going concern under the RP's management — the RP's financial reporting has to reflect both the frozen legal status and the operating reality if the business continues to trade.

Yes, and the Code's stated objective is resolution — maximising the value of the corporate debtor as a going concern — rather than immediate liquidation. Under Section 20, the RP is required to manage the operations of the corporate debtor as a going concern during CIRP, subject to the CoC's directions in certain matters. Where operations continue, the RP needs ongoing cash-flow management, vendor payment prioritisation (within moratorium constraints), and management reporting — a materially different financial support requirement than a corporate debtor that has effectively stopped trading.

Section 29A of the Code specifies categories of persons who are ineligible to submit a resolution plan — including undischarged insolvents, wilful defaulters, persons whose accounts have been classified as non-performing assets for a specified period and have not made good the default (subject to certain cure provisions), persons convicted of specified offences, and persons connected to any of the above, among other categories. The provision was introduced specifically to prevent defaulting promoters from regaining control of the corporate debtor through the resolution process at a discount, colloquially referred to as the 'back-door entry' problem the amendment was designed to close.

Resolution plans received in response to the RP's invitation are evaluated first for compliance with Section 30(2) — mandatory contents including payment of insolvency resolution process costs, payment to operational creditors (not less than what they would receive in liquidation, or the amount they would receive if distribution followed the Section 53 waterfall, whichever is higher), and a demonstrated implementation and management capability. Compliant plans are then placed before the CoC, which evaluates them on commercial parameters — value maximisation, funding certainty, timeline — and approves a plan by a vote of not less than 66% of voting share under Section 30(4). The RP then submits the CoC-approved plan to the Adjudicating Authority for final approval under Section 31.

Section 53 sets out the statutory order of priority for distributing proceeds in a liquidation: insolvency resolution process costs and liquidation costs first, then secured creditors and workmen's dues for the preceding 24 months (ranking pari passu), then employee dues for the preceding 12 months, then unsecured financial creditors, then government dues and remaining secured creditor claims (where security was relinquished), then any remaining debts, and finally equity/preference shareholders. Even during CIRP, this waterfall is the reference point Section 30(2)(b) uses to test whether operational creditors are being paid at least what they would receive in a hypothetical liquidation — so it shapes resolution plan design long before actual liquidation occurs.

If the CIRP timeline (including any extension) expires without an approved resolution plan, or the CoC votes to liquidate the corporate debtor under Section 33 at any point (by a 66% majority), the Adjudicating Authority passes a liquidation order. The RP may (though is not automatically required to) be appointed as the Liquidator, and the process shifts from resolution to asset realisation and distribution under the IBBI (Liquidation Process) Regulations, 2016, targeting completion within approximately one year under Regulation 47A, though this can be extended for recorded reasons.

Yes. Where a CIRP transitions to liquidation, we typically continue supporting the same financial advisory workstreams under the Liquidator — the liquidation estate statement, coordination with the registered valuer on asset realisation, and computation of the Section 53 distribution waterfall as actual asset sale proceeds come in. Liquidators carry accountability to the IBBI similar to RPs, and the financial reporting standard we apply does not change with the transition.

PPIRP is a faster, promoter-in-possession insolvency resolution route introduced under the IBBI (Pre-Packaged Insolvency Resolution Process) Regulations, 2021, available currently to eligible Micro, Small, and Medium Enterprises (MSME) corporate debtors that meet specified default thresholds and other eligibility conditions. Unlike standard CIRP, the existing management typically continues to run operations during PPIRP under the RP's supervision, and the process is designed for a shorter overall timeline. PNPC supports the financial advisory workstreams within a PPIRP in a broadly similar way to standard CIRP support, adapted to the compressed timeline and the promoter-in-possession structure.

We start by explicitly documenting what exists, what is missing, and what reliability concerns apply to each major account head, rather than presenting a false sense of completeness. Where books are genuinely unreliable, we cross-verify using external sources — bank statements, GST returns, TDS filings, vendor and customer confirmations — to reconstruct a defensible financial position, and we flag clearly in every deliverable to the RP where a figure rests on reconstruction rather than the corporate debtor's own contemporaneous records.

Section 66(2) allows the Adjudicating Authority, on the RP's or Liquidator's application, to direct a director or partner to contribute to the corporate debtor's assets if that person knew or ought to have known there was no reasonable prospect of avoiding insolvency and did not exercise due diligence to minimise potential loss to creditors. This is distinct from ordinary business failure — a business can fail for entirely legitimate commercial reasons without any director liability under this section. The test turns on what the directors knew (or should have known) and what steps they took once insolvency became reasonably foreseeable, not on the fact of failure itself.

Fee structures vary with the engagement. For RP-direct engagements, our fee is typically structured against the scope approved by the CoC under the RP's cost proposal, and can be a fixed fee for defined workstreams (such as IM preparation or a specific forensic review) or a retainer for ongoing support across the CIRP. For creditor-side engagements — independent CoC-member advisory or claim substantiation support — the fee is agreed directly with that creditor. In every case, we provide a written scope and fee basis before work begins; we do not commence CIRP support work on an undocumented understanding given the CoC approval requirements involved.

Registered valuer appointments under Regulation 35 of the IBBI (CIRP) Regulations — for Land and Building, Plant and Machinery, and Securities or Financial Assets — require IBBI-recognised registered valuer status in the specific asset class, which is a distinct professional registration from a CA practice. PNPC coordinates with registered valuers as part of the overall financial advisory support (reviewing valuation methodology for reasonableness, incorporating valuation outputs into the IM and plan evaluation), but does not itself act as the appointed registered valuer for these statutory purposes unless a specific team member holds that separate registration for the relevant asset class.

The Interim Resolution Professional (IRP) is appointed by the Adjudicating Authority at the time of admitting the CIRP application — typically the insolvency professional proposed by the applicant (for a creditor-initiated filing) or nominated by the corporate debtor (for a Section 10 filing), subject to no disciplinary proceedings pending against them. The IRP manages the corporate debtor and conducts the initial claims and CoC-constitution process. At the first CoC meeting, the CoC may confirm the IRP as the Resolution Professional (RP) or resolve to replace them with a different insolvency professional by the requisite majority. Once confirmed or appointed, the RP continues for the remainder of the CIRP, subject to the CoC's power to replace the RP later in the process if it chooses.

Operational creditors (vendors, suppliers, employees for dues classification, tax authorities for statutory dues) submit claims but, unlike financial creditors, do not get voting rights on the CoC unless the aggregate value of all operational debts is more than 10% of the total debt, in which case an operational creditor representative may attend CoC meetings without voting rights, per the applicable Regulations. Their financial protection instead comes through Section 30(2)(b), which requires every resolution plan to pay operational creditors at least what they would have received in a liquidation under the Section 53 waterfall (or the value of their claim, subject to certain conditions, whichever is higher).

A statutory audit tests related-party transactions primarily for accounting disclosure compliance under Ind AS 24 and Section 188 of the Companies Act. A forensic IBC review goes further — testing whether related-party transactions in the look-back period constitute preferential transactions under the extended two-year window Section 46 applies to related parties (versus one year for unrelated parties), whether they were at fair value (undervalued transaction test under Section 45), and whether they form part of a broader pattern suggesting asset-stripping ahead of insolvency. The standard of scrutiny and the legal consequence of an adverse finding are both materially higher.

Insolvency Resolution Process Costs, as defined under the Code and Regulations, are a specific defined category that ranks first in the Section 53 waterfall and includes costs like the IRP/RP's fee, costs of running the corporate debtor as a going concern during CIRP, and other CoC-approved expenses incurred for the process. PNPC's financial advisory fee, where approved by the CoC as part of the RP's cost proposal, typically forms part of this CIRP cost category — meaning it ranks ahead of secured and unsecured creditor recoveries in the distribution priority, which is one reason the CoC scrutinises these costs closely before approval.

Yes, in limited circumstances. Section 12A allows withdrawal of an admitted CIRP application, with the approval of 90% of the voting share of the CoC, on an application made to the Adjudicating Authority — typically where the applicant creditor and the corporate debtor reach a settlement after admission. This is a high threshold precisely because withdrawal after admission affects all creditors, not just the applicant who initiated the process.

The IBC is a domestic Indian statute and does not have direct extraterritorial application to assets or proceedings outside India, though cross-border insolvency provisions (based on the UNCITRAL Model Law framework) are contemplated under Section 234/235 of the Code, pending fuller implementation. For corporate debtors with UAE operations, subsidiaries, or creditors, PNPC's Dubai office coordinates on the UAE-side financial picture — asset location, UAE creditor claims, and any parallel UAE insolvency proceedings under UAE Federal Bankruptcy Law — while the India team runs the CIRP-side financial advisory, so the RP gets a coherent cross-border financial picture rather than two disconnected work streams.

The RP has periodic reporting obligations under the Regulations, including progress reports to the CoC, the Information Memorandum, the compliance certificate (Form H) accompanying the resolution plan submitted for approval, and various event-based filings. The IBBI also prescribes its own reporting requirements for insolvency professionals, including disclosures on the process. PNPC's role is to ensure the underlying financial data behind these reports — claims status, financial position, resolution plan analysis — is accurate and delivered to the RP in time for these filing deadlines, not to make the statutory filings ourselves, which remain the RP's direct responsibility.

A monitoring committee is sometimes constituted under the terms of an approved resolution plan itself (it is a plan-design choice, not a mandatory statutory body under the Code for every case) to oversee the implementation of the plan — tracking fund infusion, operational handover, and compliance with the plan's payment schedule to creditors. Where such a committee is constituted and PNPC has been part of the CIRP-stage financial advisory, we frequently continue supporting the monitoring committee's financial oversight through implementation, since the historical context and financial model built during CIRP directly inform what 'on track' implementation looks like.

Yes. The corporate debtor's statutory compliance obligations — GST returns, TDS deduction and filing, income-tax obligations — generally continue during CIRP for the period the entity continues operating, though the moratorium under Section 14 protects the corporate debtor from proceedings to recover pre-CIRP dues during the moratorium period. Government dues, including tax dues, also have a specific ranking in the Section 53 waterfall and are relevant to resolution plan compliance testing under Section 30(2). Continuing compliance during CIRP itself needs active management — a lapse here creates fresh liabilities layered on top of the pre-CIRP claims already being resolved.

Our engagement and reporting line is to the RP (or the specific creditor engaging us, where that is the structure), and our financial findings — claims admissibility, forensic transaction conclusions, resolution plan comparisons — are based on the underlying documentary evidence, not on what outcome might be more convenient for any party's fee or recovery. Where a finding is unfavourable to a resolution applicant close to the CoC, or reveals a weakness in the RP's own earlier assumptions, we report it as found. Professional independence in this context is not optional — it is what makes the work usable before the Adjudicating Authority.

PNPC's Corporate Finance practice includes dedicated Special Situations & Insolvency capability alongside our M&A, valuation, and due diligence teams — meaning the same firm that prepares business valuations and financial due diligence reports for healthy M&A transactions also applies that skill set to the distressed and forensic context CIRP requires. We combine practising CA fundamentals — books reconstruction, statutory compliance knowledge, financial statement analysis — with the specific procedural discipline the IBC's compressed timelines and Adjudicating Authority scrutiny demand.

Beyond general CA competence, an RP should look for: familiarity with the specific reporting formats the Regulations require (not generic financial advisory formats); forensic accounting capability for the avoidance-transaction work, not just statutory audit experience; the capacity to turn around large claims-verification volumes within the Regulation-prescribed timelines; and a track record of work that has actually been tested before the NCLT or NCLAT, since that is the ultimate quality bar for any CIRP-stage deliverable.