Resolution Professionals Are Not Adjudicators: Supreme Court Reaffirms Institutional Boundaries Under the IBC

Posted On - 26 June, 2026 • By - Amiy Kumar

Introduction

The Insolvency and Bankruptcy Code, 2016 (“IBC”) is built upon a carefully designed institutional framework in which different stakeholders perform distinct functions. Resolution Professionals (“RPs”) administer the insolvency process, the Committee of Creditors (“CoC”) exercises commercial decision-making powers, and the National Company Law Tribunal (“NCLT”) performs adjudicatory functions. This separation of responsibilities is central to the speed, efficiency, and effectiveness of the corporate insolvency resolution process (“CIRP”).

In a recent judgment involving claims originally advanced by Dewan Housing Finance Corporation Limited (“DHFL”) and subsequently assigned to Omkara Asset Reconstruction Private Limited, the Supreme Court has reaffirmed this institutional architecture by clarifying an important principle: admission of a claim by a Resolution Professional does not amount to a determination of liability or an acknowledgment of debt by the corporate debtor.

While the case arose in the context of limitation law, its broader significance lies in the Court’s reaffirmation of the limited and non-adjudicatory role of Resolution Professionals. The ruling provides important guidance on the nature of claim verification during CIRP and reinforces the distinction between administrative functions and judicial determinations under the IBC.

The Institutional Design of the IBC

One of the defining features of the IBC is the clear allocation of responsibilities among different participants in the insolvency process. The Resolution Professional is responsible for:

  • Receiving and collating claims;
  • Managing the affairs of the corporate debtor during CIRP;
  • Preserving and protecting the value of assets;
  • Conducting the resolution process in accordance with the Code;
  • Facilitating the functioning of the Committee of Creditors.

The Committee of Creditors is entrusted with commercial decisions, including the evaluation and approval of resolution plans. The NCLT and NCLAT, on the other hand, exercise judicial and appellate functions by adjudicating disputes arising under the insolvency framework.

This institutional separation is deliberate. It ensures that insolvency proceedings remain commercially driven while preventing administrative actors from exercising powers that properly belong to adjudicatory authorities.

Why the Role of the Resolution Professional Matters

The Resolution Professional occupies a unique position under the IBC. Although the RP manages the resolution process and interacts extensively with creditors, the RP is neither a representative of any particular stakeholder nor a judicial authority.

The Supreme Court has repeatedly observed that the RP functions as an independent facilitator whose primary duty is to ensure the smooth conduct of CIRP. This distinction becomes particularly important during the claim verification process.

In practice, creditors often attach significant importance to the admission of their claims by an RP. Admission may influence voting shares within the CoC, determine participation in the resolution process, and affect distributions under a resolution plan. However, admission of a claim for insolvency purposes does not necessarily establish the legal validity of the underlying debt in all circumstances. The recent judgment highlights this important distinction.

Claim Verification Is Not Claim Determination

The Supreme Court’s ruling clarifies that claim verification and claim adjudication are fundamentally different exercises. When a creditor submits a claim during CIRP, the RP is required to examine the supporting documentation and determine whether the claim should be included for the purposes of the insolvency process. This exercise enables the RP to:

  • Identify stakeholders;
  • Constitute the Committee of Creditors where applicable;
  • Determine voting shares;
  • Facilitate the resolution process.

However, this verification process does not involve adjudication of disputes regarding liability.

The RP does not possess statutory authority to conclusively determine:

  • Whether a debt is legally recoverable;
  • Whether contractual obligations have been breached;
  • Whether claims are barred by limitation;
  • Whether competing legal interpretations should prevail.

Those issues remain within the jurisdiction of adjudicatory forums. By drawing this distinction, the Supreme Court has reinforced that admission of a claim should not be confused with a judicial determination of rights.

Preserving the Speed and Efficiency of CIRP

The Court’s reasoning also reflects a practical concern regarding the functioning of insolvency proceedings. If admission of claims were treated as a conclusive determination of liability, Resolution Professionals would effectively be required to undertake extensive legal analysis and adjudication before admitting claims. Such an approach would fundamentally alter the role envisaged under the IBC.

CIRP is intended to operate within strict timelines. Requiring RPs to resolve complex legal disputes at the claim verification stage would significantly delay the process and undermine one of the core objectives of the Code. The Supreme Court’s approach preserves the efficiency of the insolvency framework by ensuring that claim verification remains an administrative exercise rather than a litigation-driven process.

The Judgment and the Broader Jurisprudence on RP Powers

The ruling aligns with a broader judicial trend emphasising the limited role of Resolution Professionals. In decisions such as Swiss Ribbons Pvt. Ltd. v. Union of India[1], K. Sashidhar v. Indian Overseas Bank[2], and Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta[3], the Supreme Court has repeatedly highlighted the importance of respecting the distinct functions assigned to various stakeholders under the IBC. These decisions collectively recognise that:

  • Resolution Professionals facilitate the process;
  • Creditors make commercial decisions;
  • Courts resolve legal disputes.

The latest judgment strengthens this framework by confirming that claim admission does not transform an RP into an adjudicator of rights and liabilities.

Implications for Creditors and Insolvency Professionals

The decision carries important implications for insolvency practice. For creditors, the ruling serves as a reminder that admission of a claim during CIRP should not be interpreted as a final determination of legal rights. Creditors may still need to establish:

  • The enforceability of their claims;
  • Compliance with statutory requirements;
  • Their entitlement in separate proceedings where disputes arise.

For Resolution Professionals, the judgment provides welcome clarity regarding the scope of their responsibilities. The ruling confirms that RPs are not expected to adjudicate complex legal disputes and should remain focused on the administrative functions assigned under the Code.

For resolution applicants and members of the Committee of Creditors, the judgment reinforces the importance of understanding the distinction between claim verification for CIRP purposes and final determination of liability.

Strengthening Institutional Discipline Under the IBC

Beyond the immediate dispute, the judgment contributes to a broader objective of strengthening institutional discipline within India’s insolvency framework.

The success of the IBC depends on maintaining clear boundaries between administrative, commercial, and judicial functions. Blurring these lines risks creating uncertainty, increasing litigation, and slowing down resolution processes.

By reaffirming the limited role of Resolution Professionals, the Supreme Court has reinforced one of the foundational principles of the insolvency regime: each participant must operate within the scope of authority assigned by the Code. This clarity is essential for preserving confidence in the insolvency ecosystem and ensuring that CIRP remains focused on value maximisation and timely resolution.

Conclusion

The Supreme Court’s recent decision is significant not merely because of its outcome, but because of what it says about the structure of the insolvency process itself. By clarifying that admission of a claim by a Resolution Professional does not amount to a determination of liability, the Court has reinforced the carefully calibrated institutional framework established under the IBC.

The ruling confirms that Resolution Professionals are administrators of the insolvency process rather than adjudicators of legal rights. In doing so, it preserves the distinction between claim verification and claim determination, safeguards the efficiency of CIRP, and strengthens the institutional discipline that underpins India’s insolvency regime.

As insolvency jurisprudence continues to evolve, the judgment serves as an important reminder that the effectiveness of the IBC depends not only on substantive outcomes but also on maintaining the integrity of the roles assigned to each participant in the resolution process.

  1. https://indiankanoon.org/doc/17372683/ ↑

  2. https://ibbi.gov.in/webadmin/pdf/whatsnew/2019/Feb/K%20Sashidhar%20Vs%20Indian%20Overseas%20Bank%20&%20Ors%20Civil%20Appeal%20No.%2010673-2018%20with%20CA%20No.%2010719%20-2018%20CA%20No.%2010971%20-2018%20and%20SLP%20(C)%20No.%2029181_2019-02-06%2010_31_11_2019-02-06%2023:00:50.pdf ↑

  3. https://indiankanoon.org/doc/7427609/ ↑

Last Updated on 26 June, 2026