By Sanjay Kumar Yadav, Syamantak Sen, and Vivek Badkur (National Law Institute University, Bhopal, India)
Under Indian Insolvency Law, any person may be designated as a resolution professional (“RP”), provided he is enrolled with an insolvency professional agency and registered with the Insolvency and Bankruptcy Board of India. The role of an RP, under Indian Insolvency Law, is similar to that of a private trustee under Chapter 11 of the US Bankruptcy Code.
Any person is eligible to be appointed as an RP, provided he is independent of the corporate debtor and no further eligibility criterions have been prescribed, under Indian Insolvency Law. However in a surprising turn of events, the National Company Law Appellate Tribunal in State Bank of India v. Metenere Ltd. (May 22, 2020), directed substitution of an Interim RP, based on him being a former employee of the financial creditor.
This raises concerns as it is prevalent in India for retired bankers to be appointed RPs and may therefore alter such practice, besides potentially disqualifying all former employees from acting as RPs, where the employer is involved. In this article, we discuss whether such substitution is founded in law and its consequent impact on the Indian insolvency jurisprudence, with respect to appointment of RPs.
The full article is available here.