Inclusion of Resolution Professionals as Public Servants

Source: Madras High Court 

Why in News? 

The Madras High Court  in the case of Anil Kumar Ojha v. The State and Ors. (2025) ruled that Resolution Professionals appointed under the Insolvency and Bankruptcy Code, 2016(IBC) are public servants under the Prevention of Corruption Act, 1988, disagreeing with the Delhi High Court's view and directing the IBBI to consider sanction for prosecution. 

What was the Background of Anil Kumar Ojha v. The State and Ors. (2025) Case? 

• The petitioner Anil Kumar Ojha was the former Managing Director of M/s. S.L.O. Industries Limited. 
• In 2019, NCLT appointed an Interim Resolution Professional under the IBC, and the company later went into liquidation in 2022. 
• The liquidator discovered massive inventory discrepancies - Rs. 840 crores of closing stock was unaccounted for, with NCLT confirming a difference of Rs. 625.25 crores. 
• CBI registered a case but the final report was pending due to uncertainty over whether Resolution Professionals are public servants requiring prosecution sanction. 
• IBBI withheld sanction pending Supreme Court's decision on conflicting High Court judgments on this issue. 

What were the Court's Observations? 

Conflicting High Court Views: 

• Delhi High Court (2023): Resolution Professionals are not public servants under the Prevention of Corruption Act. 
• Jharkhand High Court (2025): Resolution Professionals are public servants. 
• Both judgments are pending before the Supreme Court. 

Court's Key Reasoning: 

The Court analyzed Section 2(c) of the Prevention of Corruption Act, focusing on: 

• Sub-section (v): "any person authorized by a court of justice to perform any duty, in connection with the administration of justice" 
• Sub-section (vi): "any person to whom any matter has been referred for report by a court of justice" 
• Sub-section (viii): "any person authorized to perform any public duty" 

Disagreement with Delhi High Court: 

• The Madras HC rejected Delhi HC's narrow interpretation that limited the definition to persons with property-selling powers. 
• The Court held that "any duty in connection with the administration of justice" should have broad meaning. 

Supreme Court Authority: 

Relied on Dilip B. Jiwrajka v. Union of India (2024) which detailed Resolution Professionals' comprehensive duties including asset management, creditor coordination, and reporting to NCLT. 

Final Conclusion: 

Resolution Professionals qualify as public servants under all three sub-sections because they: 

• Are authorized by NCLT to perform justice-related duties. 
• Submit reports sought by NCLT for decision-making. 
• Perform public duties affecting society at large. 

Court's Direction: 

• IBBI must consider CBI's sanction request within 4 weeks, and CBI must file final report within 4 weeks thereafter. 

Who are Resolution Professionals? 

About: 

• Resolution Professionals are licensed professionals appointed by NCLT to manage corporate insolvency resolution process. 
• They are enrolled with IBBI and must meet specific qualifications and experience requirements. 

Key Duties under IBC: 

• As Interim Resolution Professional: Collect company information, verify creditor claims, constitute Committee of Creditors, take control of assets and operations. 
• During Resolution Process: Invite resolution plans, present to creditors, implement approved plans, maintain process transparency. 

Powers and Significance: 

• Resolution Professionals have significant powers including taking control of company management and making decisions affecting multiple stakeholders. 
• While they work under Committee of Creditors' supervision, they exercise independent judgment in many critical areas.