General

(1) An insolvency professional shall be eligible to be appointed as a resolution professional for a corporate insolvency resolution process of a corporate debtor if he, and all partners and directors of the insolvency professional entity of which he is a partner or director, are independent of the corporate debtor.
Explanation– A person shall be considered independent of the corporate debtor, if he:
                        (a) is eligible to be appointed as an independent director on the board of the corporate debtor under section 149 of the Companies Act, 2013 (18 of 2013), where the corporate debtor is a company;
                        (b) is not a related party of the corporate debtor; or
                        (c) is not an employee or proprietor or a partner:

                        (i) of a firm of auditors or 6[secretarial auditors] in practice or cost auditors of the corporate debtor; or

                        (ii) of a legal or a consulting firm, that has or had any transaction with the corporate debtor amounting to 7[five per cent] or more of the gross turnover of such firm,
                        in the last three financial years.

                        (1A) Where the committee decides to appoint the interim resolution professional as resolution professional or replace the interim resolution professional under section 22 or replace the resolution professional under section 27, it shall obtain the written consent of the proposed resolution professional in Form AA of the Schedule.

                        (2) A resolution professional shall make disclosures at the time of his appointment and thereafter in accordance with the Code of Conduct.

                        (3) A resolution professional, who is a director or a partner of an insolvency professional entity, shall not continue as a resolution professional in a corporate insolvency resolution process if the insolvency professional entity or any other partner or director of such insolvency professional entity represents any of the other stakeholders in the same corporate insolvency resolution process.
VL Note : –

(1) Without prejudice to section 17(2)(d), the interim resolution professional may access the books of account, records and other relevant documents and information, to the extent relevant for discharging his duties under the Code, of the corporate debtor held with-

                        (a) depositories of securities;

                        (b) professional advisors of the corporate debtor;

                        (c) information utilities;

                        (d) other registries that records the ownership of assets;

                        (e) members, promoters, partners, board of directors and joint venture partners of the corporate debtor; and

                        (f) contractual counterparties of the corporate debtor.

VL Note : –

(1) On an examination of books of account and other relevant records of the corporate debtor, the interim resolution professional shall ascertain class(s) of creditors, if any.

(2) For representation of creditors in a class ascertained under sub-regulation (1) in the committee, the interim resolution professional shall identify three insolvency professionals who are-
(a) not his relatives or related parties;
(b) eligible to be insolvency professionals under regulation 3; and
(c) willing to act as authorised representative of creditors in the class.

(3) The interim resolution professional shall obtain the consent of each insolvency professional identified under sub-regulation (2) to act as the authorised representative of creditors in the class in Form AB of the Schedule.
VL Note : –

A transaction shall be considered extortionate under section 50(2) where the terms:

(1) require the corporate debtor to make exorbitant payments in respect of the credit provided; or

(2) are unconscionable under the principles of law relating to contracts.
VL Note : –