RP Can’t Automatically Become Liquidator: NCLT Mumbai

NCLT Bars RP from Becoming Liquidator Post-CIRP

The NCLT, Mumbai (Bench-V), has ruled that a resolution professional (RP) cannot automatically assume the role of liquidator upon expiry of the corporate insolvency resolution process (CIRP), even under the amended Section 34 of the Insolvency and Bankruptcy Code (IBC).

The bench rejected the RP’s application, noting that continued involvement raises conflict of interest concerns, particularly in reviewing their own conduct during CIRP and managing residual assets. The decision follows the Ministry of Corporate Affairs’ 2023 amendment, which introduced stricter eligibility checks for liquidator appointment.

This clarifies the functional separation between resolution and liquidation roles. Practitioners must now expect independent appointments in liquidation, enhancing accountability and reducing institutional bias. RPs should maintain meticulous records, anticipating scrutiny by successor liquidators.