Madras HC Upholds Circular Allowing Creditor to Recommend Resolution Professional in Application u/s 95 of IBC

The Madras High Court has upheld the validity of a circular issued by the Insolvency and Bankruptcy Board of India (IBBI) that allows financial creditors to propose the names of resolution professionals in applications filed under Section 95 of the Insolvency and Bankruptcy Code (IBC). The court's decision affirms the IBBI's regulatory authority in this matter and strengthens the role of financial creditors in the insolvency resolution process, particularly at the initial stages. While validating the creditors' right to suggest resolution professionals, the court also clarified that the ultimate authority for appointing the RP remains with the adjudicating authority (NCLT).