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The Insolvency Code vests the management of the affairs of a corporate debtor in the interim resolution professional(IRP) on the insolvency commencement date. This implies the imposition of corresponding duties on the IRP. The Insolvency and Bankruptcy Board of India directed that, while acting as an IRP for a corporate person under the Code, reasonable care and diligence shall be exercised to ensure corporate debtor’s compliance with the applicable laws, failing which liability would be imposed on the IRP. This is unlike what would have been the case under the Companies Act where consequences would be borne by the directors. Additionally, the Code suspends the powers of the board of directors. Their functions are limited to providing assistance to IRP.A significant verdict of the Court held that the general duties of directors continue independent of, and run parallel to, the duties owed by an IRP. It was noted that the law expects, in an insolvency situation, for more than one actor to play their part, and that the fiduciary duties of the directors are an important part of the protection afforded to the company and its creditors.In other judgment the Court observed that various duties of IRP enumerated under the Code manifest that one individual cannot undertake all. In light of the Code, which mandates personnel of the debtor to extend all assistance to the IRP, the argument that the IRP cannot delegate some of his duties and functions to such personnel has to be rejected. The landmark judgment of the Supreme Court laid down that the resolution professional is really a facilitator of the resolution process, whose administrative functions are overseen by the committee of creditors and the adjudicating authority. In another judgment, the Court held that it is the directors of the company who are directly affected by any declaration regarding the insolvency and thus, even though the Code suspends the board of directors, yet the authorization by the same to the managing director to represent the company is valid. There is a lot more to the functions of the directors during insolvency proceedings than providing cooperation to the IRP. One of the foremost duty of a director is to cater to the interest of the creditor during the insolvency phase. With the survival of directors following insolvency, it also becomes necessary to note that there is an active survival of their functions and duties as well, rather than merely carrying out a supporting role. To achieve this, recognition of general duties of the directors under the Companies Act is certainly a minimum requirement, independent of the Code.Q. During the insolvency, what among the following happens to be the priority duty of the director of the debtor company? a)The director has no duty, as the Code shifts the management of the debtor to the Insolvency Resolution Professional.b)The director is expected to run the debtor company.c)The director shall only assist the IRP in managing the debtor company.d)The director should take care of the interests of the creditors in the insolvency phase of Debtor Company.Correct answer is option 'D'. Can you explain this answer? for CLAT 2025 is part of CLAT preparation. The Question and answers have been prepared according to the CLAT exam syllabus. Information about The Insolvency Code vests the management of the affairs of a corporate debtor in the interim resolution professional(IRP) on the insolvency commencement date. This implies the imposition of corresponding duties on the IRP. The Insolvency and Bankruptcy Board of India directed that, while acting as an IRP for a corporate person under the Code, reasonable care and diligence shall be exercised to ensure corporate debtor’s compliance with the applicable laws, failing which liability would be imposed on the IRP. This is unlike what would have been the case under the Companies Act where consequences would be borne by the directors. Additionally, the Code suspends the powers of the board of directors. Their functions are limited to providing assistance to IRP.A significant verdict of the Court held that the general duties of directors continue independent of, and run parallel to, the duties owed by an IRP. It was noted that the law expects, in an insolvency situation, for more than one actor to play their part, and that the fiduciary duties of the directors are an important part of the protection afforded to the company and its creditors.In other judgment the Court observed that various duties of IRP enumerated under the Code manifest that one individual cannot undertake all. In light of the Code, which mandates personnel of the debtor to extend all assistance to the IRP, the argument that the IRP cannot delegate some of his duties and functions to such personnel has to be rejected. The landmark judgment of the Supreme Court laid down that the resolution professional is really a facilitator of the resolution process, whose administrative functions are overseen by the committee of creditors and the adjudicating authority. In another judgment, the Court held that it is the directors of the company who are directly affected by any declaration regarding the insolvency and thus, even though the Code suspends the board of directors, yet the authorization by the same to the managing director to represent the company is valid. There is a lot more to the functions of the directors during insolvency proceedings than providing cooperation to the IRP. One of the foremost duty of a director is to cater to the interest of the creditor during the insolvency phase. With the survival of directors following insolvency, it also becomes necessary to note that there is an active survival of their functions and duties as well, rather than merely carrying out a supporting role. To achieve this, recognition of general duties of the directors under the Companies Act is certainly a minimum requirement, independent of the Code.Q. During the insolvency, what among the following happens to be the priority duty of the director of the debtor company? a)The director has no duty, as the Code shifts the management of the debtor to the Insolvency Resolution Professional.b)The director is expected to run the debtor company.c)The director shall only assist the IRP in managing the debtor company.d)The director should take care of the interests of the creditors in the insolvency phase of Debtor Company.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CLAT 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The Insolvency Code vests the management of the affairs of a corporate debtor in the interim resolution professional(IRP) on the insolvency commencement date. This implies the imposition of corresponding duties on the IRP. The Insolvency and Bankruptcy Board of India directed that, while acting as an IRP for a corporate person under the Code, reasonable care and diligence shall be exercised to ensure corporate debtor’s compliance with the applicable laws, failing which liability would be imposed on the IRP. This is unlike what would have been the case under the Companies Act where consequences would be borne by the directors. Additionally, the Code suspends the powers of the board of directors. Their functions are limited to providing assistance to IRP.A significant verdict of the Court held that the general duties of directors continue independent of, and run parallel to, the duties owed by an IRP. It was noted that the law expects, in an insolvency situation, for more than one actor to play their part, and that the fiduciary duties of the directors are an important part of the protection afforded to the company and its creditors.In other judgment the Court observed that various duties of IRP enumerated under the Code manifest that one individual cannot undertake all. In light of the Code, which mandates personnel of the debtor to extend all assistance to the IRP, the argument that the IRP cannot delegate some of his duties and functions to such personnel has to be rejected. The landmark judgment of the Supreme Court laid down that the resolution professional is really a facilitator of the resolution process, whose administrative functions are overseen by the committee of creditors and the adjudicating authority. In another judgment, the Court held that it is the directors of the company who are directly affected by any declaration regarding the insolvency and thus, even though the Code suspends the board of directors, yet the authorization by the same to the managing director to represent the company is valid. There is a lot more to the functions of the directors during insolvency proceedings than providing cooperation to the IRP. One of the foremost duty of a director is to cater to the interest of the creditor during the insolvency phase. With the survival of directors following insolvency, it also becomes necessary to note that there is an active survival of their functions and duties as well, rather than merely carrying out a supporting role. To achieve this, recognition of general duties of the directors under the Companies Act is certainly a minimum requirement, independent of the Code.Q. During the insolvency, what among the following happens to be the priority duty of the director of the debtor company? a)The director has no duty, as the Code shifts the management of the debtor to the Insolvency Resolution Professional.b)The director is expected to run the debtor company.c)The director shall only assist the IRP in managing the debtor company.d)The director should take care of the interests of the creditors in the insolvency phase of Debtor Company.Correct answer is option 'D'. Can you explain this answer?.

Solutions for The Insolvency Code vests the management of the affairs of a corporate debtor in the interim resolution professional(IRP) on the insolvency commencement date. This implies the imposition of corresponding duties on the IRP. The Insolvency and Bankruptcy Board of India directed that, while acting as an IRP for a corporate person under the Code, reasonable care and diligence shall be exercised to ensure corporate debtor’s compliance with the applicable laws, failing which liability would be imposed on the IRP. This is unlike what would have been the case under the Companies Act where consequences would be borne by the directors. Additionally, the Code suspends the powers of the board of directors. Their functions are limited to providing assistance to IRP.A significant verdict of the Court held that the general duties of directors continue independent of, and run parallel to, the duties owed by an IRP. It was noted that the law expects, in an insolvency situation, for more than one actor to play their part, and that the fiduciary duties of the directors are an important part of the protection afforded to the company and its creditors.In other judgment the Court observed that various duties of IRP enumerated under the Code manifest that one individual cannot undertake all. In light of the Code, which mandates personnel of the debtor to extend all assistance to the IRP, the argument that the IRP cannot delegate some of his duties and functions to such personnel has to be rejected. The landmark judgment of the Supreme Court laid down that the resolution professional is really a facilitator of the resolution process, whose administrative functions are overseen by the committee of creditors and the adjudicating authority. In another judgment, the Court held that it is the directors of the company who are directly affected by any declaration regarding the insolvency and thus, even though the Code suspends the board of directors, yet the authorization by the same to the managing director to represent the company is valid. There is a lot more to the functions of the directors during insolvency proceedings than providing cooperation to the IRP. One of the foremost duty of a director is to cater to the interest of the creditor during the insolvency phase. With the survival of directors following insolvency, it also becomes necessary to note that there is an active survival of their functions and duties as well, rather than merely carrying out a supporting role. To achieve this, recognition of general duties of the directors under the Companies Act is certainly a minimum requirement, independent of the Code.Q. During the insolvency, what among the following happens to be the priority duty of the director of the debtor company? a)The director has no duty, as the Code shifts the management of the debtor to the Insolvency Resolution Professional.b)The director is expected to run the debtor company.c)The director shall only assist the IRP in managing the debtor company.d)The director should take care of the interests of the creditors in the insolvency phase of Debtor Company.Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CLAT. Download more important topics, notes, lectures and mock test series for CLAT Exam by signing up for free.

Here you can find the meaning of The Insolvency Code vests the management of the affairs of a corporate debtor in the interim resolution professional(IRP) on the insolvency commencement date. This implies the imposition of corresponding duties on the IRP. The Insolvency and Bankruptcy Board of India directed that, while acting as an IRP for a corporate person under the Code, reasonable care and diligence shall be exercised to ensure corporate debtor’s compliance with the applicable laws, failing which liability would be imposed on the IRP. This is unlike what would have been the case under the Companies Act where consequences would be borne by the directors. Additionally, the Code suspends the powers of the board of directors. Their functions are limited to providing assistance to IRP.A significant verdict of the Court held that the general duties of directors continue independent of, and run parallel to, the duties owed by an IRP. It was noted that the law expects, in an insolvency situation, for more than one actor to play their part, and that the fiduciary duties of the directors are an important part of the protection afforded to the company and its creditors.In other judgment the Court observed that various duties of IRP enumerated under the Code manifest that one individual cannot undertake all. In light of the Code, which mandates personnel of the debtor to extend all assistance to the IRP, the argument that the IRP cannot delegate some of his duties and functions to such personnel has to be rejected. The landmark judgment of the Supreme Court laid down that the resolution professional is really a facilitator of the resolution process, whose administrative functions are overseen by the committee of creditors and the adjudicating authority. In another judgment, the Court held that it is the directors of the company who are directly affected by any declaration regarding the insolvency and thus, even though the Code suspends the board of directors, yet the authorization by the same to the managing director to represent the company is valid. There is a lot more to the functions of the directors during insolvency proceedings than providing cooperation to the IRP. One of the foremost duty of a director is to cater to the interest of the creditor during the insolvency phase. With the survival of directors following insolvency, it also becomes necessary to note that there is an active survival of their functions and duties as well, rather than merely carrying out a supporting role. To achieve this, recognition of general duties of the directors under the Companies Act is certainly a minimum requirement, independent of the Code.Q. During the insolvency, what among the following happens to be the priority duty of the director of the debtor company? a)The director has no duty, as the Code shifts the management of the debtor to the Insolvency Resolution Professional.b)The director is expected to run the debtor company.c)The director shall only assist the IRP in managing the debtor company.d)The director should take care of the interests of the creditors in the insolvency phase of Debtor Company.Correct answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of The Insolvency Code vests the management of the affairs of a corporate debtor in the interim resolution professional(IRP) on the insolvency commencement date. This implies the imposition of corresponding duties on the IRP. The Insolvency and Bankruptcy Board of India directed that, while acting as an IRP for a corporate person under the Code, reasonable care and diligence shall be exercised to ensure corporate debtor’s compliance with the applicable laws, failing which liability would be imposed on the IRP. This is unlike what would have been the case under the Companies Act where consequences would be borne by the directors. Additionally, the Code suspends the powers of the board of directors. Their functions are limited to providing assistance to IRP.A significant verdict of the Court held that the general duties of directors continue independent of, and run parallel to, the duties owed by an IRP. It was noted that the law expects, in an insolvency situation, for more than one actor to play their part, and that the fiduciary duties of the directors are an important part of the protection afforded to the company and its creditors.In other judgment the Court observed that various duties of IRP enumerated under the Code manifest that one individual cannot undertake all. In light of the Code, which mandates personnel of the debtor to extend all assistance to the IRP, the argument that the IRP cannot delegate some of his duties and functions to such personnel has to be rejected. The landmark judgment of the Supreme Court laid down that the resolution professional is really a facilitator of the resolution process, whose administrative functions are overseen by the committee of creditors and the adjudicating authority. In another judgment, the Court held that it is the directors of the company who are directly affected by any declaration regarding the insolvency and thus, even though the Code suspends the board of directors, yet the authorization by the same to the managing director to represent the company is valid. There is a lot more to the functions of the directors during insolvency proceedings than providing cooperation to the IRP. One of the foremost duty of a director is to cater to the interest of the creditor during the insolvency phase. With the survival of directors following insolvency, it also becomes necessary to note that there is an active survival of their functions and duties as well, rather than merely carrying out a supporting role. To achieve this, recognition of general duties of the directors under the Companies Act is certainly a minimum requirement, independent of the Code.Q. During the insolvency, what among the following happens to be the priority duty of the director of the debtor company? a)The director has no duty, as the Code shifts the management of the debtor to the Insolvency Resolution Professional.b)The director is expected to run the debtor company.c)The director shall only assist the IRP in managing the debtor company.d)The director should take care of the interests of the creditors in the insolvency phase of Debtor Company.Correct answer is option 'D'. Can you explain this answer?, a detailed solution for The Insolvency Code vests the management of the affairs of a corporate debtor in the interim resolution professional(IRP) on the insolvency commencement date. This implies the imposition of corresponding duties on the IRP. The Insolvency and Bankruptcy Board of India directed that, while acting as an IRP for a corporate person under the Code, reasonable care and diligence shall be exercised to ensure corporate debtor’s compliance with the applicable laws, failing which liability would be imposed on the IRP. This is unlike what would have been the case under the Companies Act where consequences would be borne by the directors. Additionally, the Code suspends the powers of the board of directors. Their functions are limited to providing assistance to IRP.A significant verdict of the Court held that the general duties of directors continue independent of, and run parallel to, the duties owed by an IRP. It was noted that the law expects, in an insolvency situation, for more than one actor to play their part, and that the fiduciary duties of the directors are an important part of the protection afforded to the company and its creditors.In other judgment the Court observed that various duties of IRP enumerated under the Code manifest that one individual cannot undertake all. In light of the Code, which mandates personnel of the debtor to extend all assistance to the IRP, the argument that the IRP cannot delegate some of his duties and functions to such personnel has to be rejected. The landmark judgment of the Supreme Court laid down that the resolution professional is really a facilitator of the resolution process, whose administrative functions are overseen by the committee of creditors and the adjudicating authority. In another judgment, the Court held that it is the directors of the company who are directly affected by any declaration regarding the insolvency and thus, even though the Code suspends the board of directors, yet the authorization by the same to the managing director to represent the company is valid. There is a lot more to the functions of the directors during insolvency proceedings than providing cooperation to the IRP. One of the foremost duty of a director is to cater to the interest of the creditor during the insolvency phase. With the survival of directors following insolvency, it also becomes necessary to note that there is an active survival of their functions and duties as well, rather than merely carrying out a supporting role. To achieve this, recognition of general duties of the directors under the Companies Act is certainly a minimum requirement, independent of the Code.Q. During the insolvency, what among the following happens to be the priority duty of the director of the debtor company? a)The director has no duty, as the Code shifts the management of the debtor to the Insolvency Resolution Professional.b)The director is expected to run the debtor company.c)The director shall only assist the IRP in managing the debtor company.d)The director should take care of the interests of the creditors in the insolvency phase of Debtor Company.Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of The Insolvency Code vests the management of the affairs of a corporate debtor in the interim resolution professional(IRP) on the insolvency commencement date. This implies the imposition of corresponding duties on the IRP. The Insolvency and Bankruptcy Board of India directed that, while acting as an IRP for a corporate person under the Code, reasonable care and diligence shall be exercised to ensure corporate debtor’s compliance with the applicable laws, failing which liability would be imposed on the IRP. This is unlike what would have been the case under the Companies Act where consequences would be borne by the directors. Additionally, the Code suspends the powers of the board of directors. Their functions are limited to providing assistance to IRP.A significant verdict of the Court held that the general duties of directors continue independent of, and run parallel to, the duties owed by an IRP. It was noted that the law expects, in an insolvency situation, for more than one actor to play their part, and that the fiduciary duties of the directors are an important part of the protection afforded to the company and its creditors.In other judgment the Court observed that various duties of IRP enumerated under the Code manifest that one individual cannot undertake all. In light of the Code, which mandates personnel of the debtor to extend all assistance to the IRP, the argument that the IRP cannot delegate some of his duties and functions to such personnel has to be rejected. The landmark judgment of the Supreme Court laid down that the resolution professional is really a facilitator of the resolution process, whose administrative functions are overseen by the committee of creditors and the adjudicating authority. In another judgment, the Court held that it is the directors of the company who are directly affected by any declaration regarding the insolvency and thus, even though the Code suspends the board of directors, yet the authorization by the same to the managing director to represent the company is valid. There is a lot more to the functions of the directors during insolvency proceedings than providing cooperation to the IRP. One of the foremost duty of a director is to cater to the interest of the creditor during the insolvency phase. With the survival of directors following insolvency, it also becomes necessary to note that there is an active survival of their functions and duties as well, rather than merely carrying out a supporting role. To achieve this, recognition of general duties of the directors under the Companies Act is certainly a minimum requirement, independent of the Code.Q. During the insolvency, what among the following happens to be the priority duty of the director of the debtor company? a)The director has no duty, as the Code shifts the management of the debtor to the Insolvency Resolution Professional.b)The director is expected to run the debtor company.c)The director shall only assist the IRP in managing the debtor company.d)The director should take care of the interests of the creditors in the insolvency phase of Debtor Company.Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice The Insolvency Code vests the management of the affairs of a corporate debtor in the interim resolution professional(IRP) on the insolvency commencement date. This implies the imposition of corresponding duties on the IRP. The Insolvency and Bankruptcy Board of India directed that, while acting as an IRP for a corporate person under the Code, reasonable care and diligence shall be exercised to ensure corporate debtor’s compliance with the applicable laws, failing which liability would be imposed on the IRP. This is unlike what would have been the case under the Companies Act where consequences would be borne by the directors. Additionally, the Code suspends the powers of the board of directors. Their functions are limited to providing assistance to IRP.A significant verdict of the Court held that the general duties of directors continue independent of, and run parallel to, the duties owed by an IRP. It was noted that the law expects, in an insolvency situation, for more than one actor to play their part, and that the fiduciary duties of the directors are an important part of the protection afforded to the company and its creditors.In other judgment the Court observed that various duties of IRP enumerated under the Code manifest that one individual cannot undertake all. In light of the Code, which mandates personnel of the debtor to extend all assistance to the IRP, the argument that the IRP cannot delegate some of his duties and functions to such personnel has to be rejected. The landmark judgment of the Supreme Court laid down that the resolution professional is really a facilitator of the resolution process, whose administrative functions are overseen by the committee of creditors and the adjudicating authority. In another judgment, the Court held that it is the directors of the company who are directly affected by any declaration regarding the insolvency and thus, even though the Code suspends the board of directors, yet the authorization by the same to the managing director to represent the company is valid. There is a lot more to the functions of the directors during insolvency proceedings than providing cooperation to the IRP. One of the foremost duty of a director is to cater to the interest of the creditor during the insolvency phase. With the survival of directors following insolvency, it also becomes necessary to note that there is an active survival of their functions and duties as well, rather than merely carrying out a supporting role. To achieve this, recognition of general duties of the directors under the Companies Act is certainly a minimum requirement, independent of the Code.Q. During the insolvency, what among the following happens to be the priority duty of the director of the debtor company? a)The director has no duty, as the Code shifts the management of the debtor to the Insolvency Resolution Professional.b)The director is expected to run the debtor company.c)The director shall only assist the IRP in managing the debtor company.d)The director should take care of the interests of the creditors in the insolvency phase of Debtor Company.Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice CLAT tests.