Chapter II - Corporate Insolvency Resolution Process
Section 17
Section 17: who manages the company after the interim professional is appointed?
From the appointment of the interim resolution professional, management of the corporate debtor vests in that professional, and the directors' or partners' powers are suspended. Officers, managers and banks must work with the new management authority.
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This article is for general information. Refer to the Insolvency and Bankruptcy Code, 2016 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) From the date of appointment of the interim resolution professional,—
(a) the management of the affairs of the corporate debtor shall vest in the interim resolution professional;
(b) the powers of the board of directors or the partners of the corporate debtor, as the case may be, shall stand suspended and be exercised by the interim resolution professional;
(c) the officers and managers of the corporate debtor shall report to the interim resolution professional and provide access to such documents and records of the corporate debtor as may be required by the interim resolution professional;
(d) the financial institutions maintaining accounts of the corporate debtor shall act on the instructions of the interim resolution professional in relation to such accounts and furnish all information relating to the corporate debtor available with them to the interim resolution professional.
(2) The interim resolution professional vested with the management of the corporate debtor shall—
(a) act and execute in the name and on behalf of the corporate debtor all deeds, receipts, and other documents, if any;
(b) take such actions, in the manner and subject to such restrictions, as may be specified by the Board;
(c) have the authority to access the electronic records of corporate debtor from information utility having financial information of the corporate debtor;
(d) have the authority to access the books of account, records and other relevant documents of corporate debtor available with government authorities, statutory auditors, accountants and such other persons as may be specified; and
(e) be responsible for complying with the requirements under any law for the time being in force on behalf of the corporate debtor.
Introduction
Section 17 describes the immediate management effect of the professional's appointment. It should be read with section 19's cooperation duty, section 20's going-concern powers and the current IBBI CIRP Regulations. The enacted 2026 Amendment Act did not amend section 17; it changed nearby sections 18 and 19.
Key takeaways
Management vests in the IRP
Appointment shifts the debtor's management to the interim resolution professional and suspends board or partner powers while the section applies.
Records and bank accounts
Officers and managers must report and provide records; financial institutions must act on the IRP's account instructions and furnish available information.
Legal compliance remains
Subsection (2)(e) makes the interim professional responsible for the debtor's requirements under applicable law during this management period.
Notify the relevant teams and banks
After appointment, communicate the IRP's authority to directors, officers, account signatories and banking institutions. Preserve the appointment order and a record of instructions given.
Secure operational records
Obtain the debtor's books, statutory records, contracts and electronic information needed to manage the business. Document access requests and any missing material for follow-up under the current cooperation rules.
Map ongoing compliance
List tax, employment, reporting and other requirements that fall due while the IRP manages the debtor. Section 17(2)(e) is a responsibility, while detailed processes depend on the relevant law and IBBI regulations.
Practical checklist
Do
- Keep the appointment order and management handover record.
- Notify bank account operators promptly and document instructions.
- Track records received and statutory compliance deadlines.
Avoid
- Do not let suspended board powers continue as if no appointment occurred.
- Do not assume CIRP suspends every ordinary legal compliance requirement.
Glossary
- IRP
- Interim resolution professional appointed at the opening stage of the corporate insolvency resolution process.
- Information utility
- A regulated repository of financial information under the Code.
Frequently asked questions
Can directors keep exercising board powers after the IRP's appointment?
Section 17(1)(b) suspends those powers and places their exercise with the IRP.
Who instructs the debtor's banks?
Under section 17(1)(d), financial institutions maintaining its accounts act on the IRP's instructions relating to those accounts.
Need help applying this provision to your situation?
Contact BizeneedLast updated 9 October 2026