Section 22 of IBC : Section 22: Appointment Of Resolution Professional

Explanation using Example

Imagine a company, XYZ Pvt Ltd, is undergoing insolvency proceedings. The creditors of XYZ Pvt Ltd have formed a committee as per the Insolvency and Bankruptcy Code, 2016. This committee is responsible for making key decisions during the insolvency process.

In accordance with Section 22(1), the committee is required to hold its first meeting within seven days of its formation. At this meeting, as per Section 22(2), the creditors must decide whether to retain the interim resolution professional (IRP) appointed at the start of the insolvency process or to replace them with a new resolution professional (RP).

Let's say, 70% of the financial creditors vote in favor of replacing the IRP with a new RP, which is above the 66% threshold required. Following Section 22(3)(b), the committee will then need to file an application to the Adjudicating Authority to appoint their proposed RP, including the written consent of the new RP.

As per Section 22(4), the Adjudicating Authority will send the proposed RP's name to the Insolvency and Bankruptcy Board for confirmation. If the Board does not confirm the new RP within ten days, as mentioned in Section 22(5), the IRP will continue their role until the Board confirms the new RP.