Replacement of IRP/RP under IBC: Complete Practical Guide

Replacement of IRP/RP under IBC, 2016 – Complete Practical Guide for Professionals

The Insolvency and Bankruptcy Code, 2016 (IBC) provides a structured and time-bound framework for insolvency resolution. A key pillar of this process is the role of the Interim Resolution Professional and the Resolution Professional (RP).

However, there may arise situations requiring the replacement of IRP/RP due to inefficiency, conflict of interest, or stakeholder dissatisfaction. The Code provides clear mechanisms for such replacement, depending on the stage and nature of proceedings. This blog provides a comprehensive legal and practical guide to replacing an IRP or Resolution Professional under IBC.

Understanding the Role of IRP and RP

• IRP (Interim Resolution Professional): Appointed at the initiation of CIRP to take control of the Corporate Debtor and constitute the Committee of Creditors.
• RP (Resolution Professional): Either confirmed from the IRP or newly appointed by the Committee of Creditors to manage CIRP and conduct the resolution process.

Legal Framework for Replacement of IRP/Resolution Professional under IBC, 2016

The Insolvency and Bankruptcy Code, 2016 provides multiple provisions depending on the stage and applicant:

Section 22 – Appointment/Replacement after First CoC Meeting

Applies after the constitution of the Committee of Creditors. CoC may confirm the interim resolution professional as RP or replace the interim resolution professional with another RP. Requires a majority vote (previously 66%) and an application filed before the NCLT court.

Section 27 – Replacement of RP during CIRP

The Committee of Creditors can replace the Resolution Professional at any time during CIRP, which requires a 66% voting share of the Committee of Creditors.

Moreover, there is No need to assign detailed reasons (though practically advisable), and the proposed RP must give written consent.

Section 98 – Replacement in Individual Insolvency

Applies in personal guarantor/individual insolvency cases. Application can be made by debtor or creditor. Filed before Adjudicating Authority (NCLT)

Section 60(5) & Rule 11 of NCLT Rules

Residual powers of NCLT : Used for Filing Interlocutory Applications (IA) and raising specific grievances like bias, misconduct, lack of cooperation and procedural violations

What are the practical grounds for replacement of IRP or RP?

While The Insolvency and Bankruptcy Code, 2016, does not mandate strict justification, in practice, the following grounds are commonly cited: Conflict of interest, Lack of transparency, Non-cooperation with the committee of creditors, delay in CIRP timelines, and disciplinary proceedings by IBBI. Inefficiency in asset management and Poor communication/reporting

Step-by-Step Process for Replacement of IRP/RP under IBC, 2016

Step 1: Obtain CoC Approval : RP must conduct a Committee of Creditors meeting. Pass resolution with 66% voting share and record detailed minutes

Step 2: Identify New RP : Choose a qualified insolvency professional, ensure registration with IBBI, and have no disciplinary proceedings. No conflict of interest must be there.

Step 3: Obtain Consent: The proposed resolution professional must submit written consent (Form AA / Form 2 as applicable) and confirm eligibility under IBC and regulations.

Step 4: Draft Interlocutory Application (IA): The interlocutory applications should include details of the corporate debtor, existing interim resolution professional / RP, and legal provision invoked via Section 22 / 27 / 98 / 60(5) of the Insolvency and Bankruptcy Code, 2016.

Grounds for replacement must be a copy of the committee of creditors’ resolution, consent of the proposed resolution professional, and a prayer for the removal of the existing RP and appointment of a new RP.

Step 5: Filing with NCLT : File interlocutory applications through the NCLT e-filing portal, Pay the prescribed fees, attach authorization documents, an affidavit, and annexures.

Step 6: NCLT Hearing and Order : NCLT examines procedural compliance and consent and eligibility of the new resolution professional. On approval, the new resolution professional is formally appointed, and the existing RP hands over charge.

 

It must be noted that while replacing the resolution professional or IRP under the CIRP process, always document CoC dissatisfaction clearly.

The Committee of Creditors must ensure proper voting compliance and take charge of bank accounts and records immediately. Follow up on pending claims and verifications and maintain transparency during transition.

Key practical challenges under this process are delay in handover by the outgoing RP, disputes over fees of the previous RP, incomplete records/documents, and resistance from management with ongoing litigation.

Important Judicial Principles is Process for Replacement of IRP/RP under IBC, 2016

• CoC has commercial wisdom supremacy in replacing the resolution professional
• Reasons are not mandatory but strengthen the case
• A smooth transition is critical for CIRP timelines
• Resolution Professional acts as facilitator—not decision-maker

Conclusion

Replacement of Interim Resolution A professional/RP is a critical yet structured process under the Insolvency and Bankruptcy Code, 2016. While the law empowers stakeholders, especially the Committee of Creditors, to exercise control over insolvency professionals, the process must be handled with procedural discipline and strategic clarity.

A well-drafted application, proper documentation, and compliance with statutory provisions ensure that the transition does not disrupt the CIRP timeline and protects the interests of all stakeholders.

Draft Template Outline

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, [Insert Bench e.g., MUMBAI / NEW DELHI] BENCH
IA NO. ________ OF 2026
IN
COMPANY PETITION (IB) NO. ________ OF 202[X]

IN THE MATTER OF:
[Name of Applicant/Financial Creditor/Corporate Debtor] … Applicant
Versus
[Name of Corporate Debtor] … Corporate Debtor

APPLICATION FILED UNDER SECTION [Insert Section, e.g., 27/98] OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 READ WITH RULE 11 OF THE NCLT RULES, 2016 FOR REPLACEMENT OF RESOLUTION PROFESSIONAL [1]

THE APPLICANT HUMBLY SHOWETH:

1. Details of the Corporate Insolvency Resolution Process (CIRP): Briefly outline when the CIRP was initiated and when the current RP was appointed.
2. Grounds for Replacement: Clearly state the rationale. (e.g., “The Committee of Creditors in its [Insert No.] meeting held on [Date] resolved with [Insert] % voting share to replace the current RP, Mr./Ms. [Name], due to [Specify cogent reasons, e.g., delays in the process, pending disciplinary actions, conflict of interest].” )
3. Proposed Resolution Professional: State that the proposed RP, Mr./Ms. [New Name] (IBBI Registration No. ____________), is eligible to act as RP and has provided his written consent in Form AA.
4. Prayer:
   • Allow the present application and replace the outgoing RP, Mr./Ms. [Name];
   • Appoint Mr./Ms. [New Name] as the Resolution Professional for the Corporate Debtor;
   • Pass any such other orders as this Hon’ble Tribunal may deem fit.

DATED: [Date, e.g., 1.05.2026]
PLACE: [Location, e.g., kota, Rajasthan]

[SIGNATURE]
Counsel for the Applicant