CHAPTER II CORPORATE INSOLVENCY RESOLUTION PROCESSCentral

Section 27 of The Insolvency and Bankruptcy Code, 2016.

Replacement of resolution professional by committee of creditors.

(1)Where, at any time during the corporate insolvency resolution process, the committee of creditors is of the opinion that a resolution professional appointed under section 22 is required to be replaced, it may replace him with another resolution professional in the manner provided under this section. 1 [(2) The committee of creditors may, at a meeting, by a vote of sixty-six per cent. of voting shares, resolve to replace the resolution professional appointed under section 22 with another resolution professional, subject to a written consent from the proposed resolution professional in the specified form.] .
(3)The committee of creditors shall forward the name of the insolvency professional proposed by them to the Adjudicating Authority.
(4)The Adjudicating Authority shall forward the name of the proposed resolution professional to the Board for its confirmation and a resolution professional shall be appointed in the same manner as laid down in section 16.
(5)where any discriplinary proceeding are pending against the proposed resolution professional under sub-section (3), the resolution professional appointed under section 22 shall continue till the appointment of another professional under the section.

Summary

The committee of creditors (the group of financial lenders) has the power to replace the resolution professional (the licensed professional running the insolvency process) at any time during the corporate insolvency resolution process (the formal process to rescue a failing company).
To replace the professional, the committee of creditors must pass a resolution at a meeting by a vote of at least sixty-six percent of the voting shares (the voting power assigned to each lender based on what they are owed).
The proposed new professional must provide written consent in a specified form before they can be appointed.
The committee of creditors must send the proposed professional's name to the Adjudicating Authority (the National Company Law Tribunal, which is the specialized company court).
The Adjudicating Authority sends the name to the Board (the Insolvency and Bankruptcy Board of India, which is the main regulator) for confirmation, following the appointment process under Section 16 of the Code.
If there is an active disciplinary case against the proposed new professional, the existing professional will stay in office until a clean replacement is appointed.

Practical examples

1Apex Steel Limited is going through insolvency. The lenders on the committee of creditors are unhappy with the current resolution professional, Mr. Ajay Sharma, who was appointed under Section 22. On November 12, 2026, the lenders hold a meeting and vote. Lenders holding seventy percent of the total voting shares agree to replace him with Ms. Priya Patel, who has given her written consent. The committee then forwards her name to the court to make the swap under Section 27.

2In the insolvency case of Beta Textiles Private Limited, the committee of creditors wants to replace their resolution professional, Mr. Rajesh Gupta. They hold a meeting on January 15, 2026, but only fifty-five percent of the voting shares vote in favour of the change. Because this is less than the required sixty-six percent, the motion fails, and Mr. Gupta remains in his role.

3The creditors of Gamma Food Products hold a meeting on March 5, 2026, and vote by an eighty percent majority to replace their resolution professional with Ms. Sunita Rao. They submit her name to the Adjudicating Authority under Section 27. However, the Insolvency and Bankruptcy Board of India reports that a disciplinary proceeding is currently pending against Ms. Rao. As a result, the old resolution professional must continue to run the process until another person is chosen.

FAQ

1. What is the percentage of votes needed to replace a resolution professional under Section 27 of the Insolvency and Bankruptcy Code, 2016?

Under Section 27 of the Insolvency and Bankruptcy Code, 2016, the committee of creditors must pass a resolution by a vote of not less than sixty-six percent of the voting shares to replace the resolution professional.

2. Can a resolution professional appointed under Section 22 be replaced at any time under the Insolvency and Bankruptcy Code, 2016?

Yes, under Section 27 of the Insolvency and Bankruptcy Code, 2016, the committee of creditors can resolve to replace the resolution professional at any time during the corporate insolvency resolution process.

3. Who confirms the name of a proposed new resolution professional under Section 27 of the Insolvency and Bankruptcy Code, 2016?

Under Section 27 of the Insolvency and Bankruptcy Code, 2016, the committee of creditors forwards the name of the proposed professional to the Adjudicating Authority, which then forwards it to the Insolvency and Bankruptcy Board of India for confirmation.

4. What happens if a proposed new resolution professional has a pending disciplinary proceeding under Section 27 of the Insolvency and Bankruptcy Code, 2016?

Under Section 27 of the Insolvency and Bankruptcy Code, 2016, if disciplinary proceedings are pending against the proposed resolution professional, the existing resolution professional will continue to function until another professional is appointed.

Test yourself

1.Under Section 27 of the Insolvency and Bankruptcy Code, 2016, what is the minimum voting share required by the committee of creditors to replace a resolution professional?

2.Under Section 27 of the Insolvency and Bankruptcy Code, 2016, what is required from the proposed new resolution professional before the committee of creditors can vote to appoint them?

3.Under Section 27 of the Insolvency and Bankruptcy Code, 2016, how is a cross-reference to Section 22 applied if the committee of creditors wants to replace a professional who was appointed at their very first meeting?

4.Under Section 27 of the Insolvency and Bankruptcy Code, 2016, what is the consequence of having a pending disciplinary proceeding against the proposed new resolution professional?

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