CHAPTER II - CORPORATE INSOLVENCY RESOLUTION PROCESS
Section 18 of the Insolvency and Bankruptcy Code 2016: Duties of Interim Resolution Professional
Section 18 sets out the core statutory duties of the interim resolution professional during the opening stage of a corporate insolvency resolution process. These duties include collecting financial and operational information, receiving and collating creditor claims, constituting the Committee of Creditors, monitoring assets and operations, filing information where necessary, and taking control and custody of qualifying assets.
Section 18(a): Collect Information About Assets, Finances and Operations
The IRP must collect all information relating to the assets, finances and operations of the corporate debtor for determining its financial position. The statutory information includes:
This information-gathering duty supports the IRP's responsibility to understand the corporate debtor's financial position and perform the other functions assigned under the Code.
Section 18(b): Receive, Verify and Collate Creditor Claims
The IRP receives and collates claims submitted by creditors pursuant to the public announcement under Section 13 and Section 15. The manner of submission, verification and collation is governed by the Code read with the CIRP Regulations.
The current statutory framework expressly clarifies the IRP's role in verification of claims and, where required, determination of the value of verified claims. The list of claims used in CIRP is therefore based on the statutory and regulatory verification process rather than mere receipt of a creditor's assertion.
Section 18(c): Constitute the Committee of Creditors
The IRP must constitute the Committee of Creditors. Section 21 governs the constitution and composition of the committee. This is a central transition in CIRP because the Committee of Creditors thereafter exercises the decision-making powers assigned to it by the Code.
Section 18(d): Monitor Assets and Manage Operations
The IRP must monitor the assets of the corporate debtor and manage its operations until a resolution professional is appointed by the Committee of Creditors. This duty should be read with Section 17, under which management vests in the IRP, and Section 20, which addresses preservation of value and management as a going concern.
Section 18(e): File Information With the Information Utility
The IRP must file information collected with the information utility, where necessary. An information utility is a person registered with the Insolvency and Bankruptcy Board of India under Section 210 to provide the information services contemplated by the Code.
Section 18(f): Take Control and Custody of Assets
The IRP must take control and custody of assets over which the corporate debtor has ownership rights as recorded in its balance sheet, with an information utility, with a securities depository, or in another registry that records ownership of assets. The provision includes:
The duty concerns control and custody for CIRP purposes. Whether a particular property is an asset of the corporate debtor depends on ownership rights and the statutory exclusions stated in the Explanation to Section 18.
Explanation to Section 18: Assets Excluded From IRP Control and Custody
For the purpose of Section 18, the term "assets" does not include the following categories:
| Excluded category | Scope |
|---|---|
| Third-party assets | Assets owned by a third party but in possession of the corporate debtor under trust or contractual arrangements, including bailment. |
| Subsidiary assets | Assets of an Indian or foreign subsidiary of the corporate debtor. |
| Notified assets | Other assets notified by the Central Government in consultation with a financial sector regulator. |
Section 18(g): Other Duties Specified by IBBI
The IRP must also perform other duties specified by the Insolvency and Bankruptcy Board of India. Accordingly, Section 18 should not be read in isolation from the current Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
Definitions Relevant to Section 18
| Provision | Term | Meaning |
|---|---|---|
| Section 3(8) | Corporate debtor | A corporate person who owes a debt to any person. |
| Section 3(10) | Creditor | A person to whom a debt is owed and includes financial, operational, secured and unsecured creditors and decree-holders. |
| Section 3(21) | Information utility | A person registered with the Board as an information utility under Section 210. |
| Section 5(12) | Insolvency commencement date | The date of admission of an application for initiating CIRP by the Adjudicating Authority under the applicable provision. |
| Section 5(15) | Interim resolution professional | An insolvency professional appointed under Section 16. |
| Section 5(27) | Resolution professional | An insolvency professional appointed to conduct CIRP and includes an interim resolution professional. |
For other Part II definitions, see Section 5 of the IBC.
Section 18 in the CIRP Framework
| Provision | Function |
|---|---|
| Section 16 | Appointment and tenure of the IRP. |
| Section 17 | Management of the corporate debtor vests in the IRP. |
| Section 18 | Prescribes the IRP's information, claims, committee, operations and asset-related duties. |
| Section 19 | Requires personnel and specified persons to assist and cooperate with the IRP. |
| Section 20 | Preservation of value and operation of the corporate debtor as a going concern. |
| Section 21 | Constitution and composition of the Committee of Creditors. |
Official Legal Resources
For the current Code, amendments and CIRP Regulations, refer to the India Code portal, IBBI Legal Framework, IBBI Acts, IBBI Regulations, IBBI Notifications and IBBI Orders.