IBC: Can IRPs And RPs Unilaterally Amend Existing Contracts Executed By Debtors?

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