The Insolvency and Bankruptcy Code, 2016 (IBC)
aims to revive debtor entities facing financial stress. Approval of
a resolution plan for a debtor by its financial creditors marks the
success of the IBC process, but the period leading up to it - the
180-day corporate insolvency resolution process
(CIRP) - is also critical.
Interim resolution professionals (IRPs) and
resolution professionals (RPs) run the management
and affairs of the debtor during this period and have the important
task of preserving the debtor's property and managing its
operations as a going concern. They have wide powers to achieve
these objectives. A key one is at Section 20(2)(b) of the IBC which
empowers IRPs to "enter into contracts on behalf of the
corporate debtor or to amend or modify the contracts or
transactions which were entered into before the commencement of
corporate insolvency resolution process". Reading this, a
question that arises is whether IRPs and RPs can unilaterally
