Experts say a significant number of cancellations may point to either systemic shortcomings in how IPs have discharged their obligations | Photo Credit: lakshmiprasad S

The National Company Law Tribunal’s (NCLT) August 25 ruling, approving a repayment plan of ₹6.25 crore from media baron Subhash Chandra against an admitted claim of over ₹22,000 crore, has put India’s insolvency professionals (IPs) under an unusually sharp spotlight.

A businessline analysis of data from the IBBI shows that 207 IP registrations were cancelled in the June 2026 quarter, the highest since the regulator’s inception. All of them were due to the failure in meeting eligibility norms, rather than disciplinary proceedings or death.

“An IP is authorised to conduct insolvency and bankruptcy proceedings under the law. They take control of distressed companies, manage their affairs during the insolvency process, and help ensure that the interests of creditors and other stakeholders are protected,” explained Rajasekhar VK, lawyer and formal judicial member of the NCLT.

But “a significant number of cancellations may point to either systemic shortcomings in how IPs have discharged their obligations (raising questions about ongoing adherence to ‘fit and proper’ standards), or to gaps in the initial screening process at the time of registration that allowed insufficiently qualified professionals into the fold,” opined Anoop Rawat, Partner and National Practice Head-Insolvency and Restructuring at Shardul Amarchand Mangaldas.

Scrutiny also intensified through FY27. The IBBI’s disciplinary committee issued 31 show-cause notices to IPs in the current financial year till September 8. Most of those were sent out in June.

Interestingly, only eight new IP registrations were recorded during the quarter under review. “That’s because, one, there are too many RPs already. As a result, the pricing for the services of an RP has also gone down. So not a lot of people are jumping on the RP bandwagon,” said Siddharth Srivastava, Partner at Khaitan & Co. “Additionally, the insolvency market has also changed a bit where, since the NPA rate has gone down, the volumes have also gone down a little.”

The businessline analysis also shows that of the 7,019 corporate insolvency resolution process (CIRP) recorded till June 30 since the IBC came into effect, in which a resolution professional (RP) had been appointed, as many as 1,944 involved an RP different from the original, or roughly three in 10 cases. The replacement was the highest when proceedings were initiated by corporate debtors at 35 per cent, followed by operational creditors at 33 per cent.

The choice to replace the IRP, said Srivastava, depends on case to case. “It happens when an RP has either been appointed by an operational creditor or under such intent by the company itself. Therefore, when the financial creditors come in, they are not very comfortable with that RP.”

Published on September 15, 2026