Insolvency Professional Can Continue Existing Assignments After Attaining Age 70: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Chennai has held that an insolvency professional can continue handling assignments already entrusted to him even after turning 70 years of age, the upper age limit for insolvency professionals, if the Authorisation for Assignment (AFA) expires during the course of those assignments.

A bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain observed:

“...where the authorisation of assignment, (AFA) expires during the pendency of the assignments already granted to the Insolvency Professionals, such assignments shall not cease and continuing in the same vein, if AFA expires in an event of the Insolvency Resolution Professional attaining the age of 70 years, which is the upper age limit for an Insolvency Professional, he will still be permitted to continue and complete those assignments.”

The ruling came while dismissing two appeals filed by Chavva Naga Sampathi Tayaru, the erstwhile director and personal guarantor of Sri Ananda Lakshmi Narasimha Industries India Pvt. Ltd.

The Central Bank of India had extended credit facilities of more than ₹33 crore to the company. Following a default in repayment, the bank initiated insolvency proceedings. The process began in 2023. As no plans were submitted during the process, the company was eventually ordered to be liquidated. The liquidation process was required to be completed within one year, by December 2025.

When the liquidation could not be concluded within that period, the liquidator sought additional time. A four-month extension was granted up to April 2026. Thereafter, the liquidator sought a further extension of 150 days. The NCLT allowed only one month, from April 18, 2026 to May 17, 2026.

Tayaru challenged the extension order before the appellate tribunal, contending that the adjudicating authority lacked the power to extend the liquidation period a second time. She also questioned the continuation of the Bankruptcy Trustee after he had attained 70 years of age.

The NCLAT noted that the one-month extension had already expired by the time the appeals were argued before it. Since the liquidator had already availed the benefit of the extension, interference with the order was not warranted, the tribunal held.

The appellate tribunal then examined the challenge to the Bankruptcy Trustee's continuation. It noted that Regulation 7A of the Insolvency Professionals Regulations bars an insolvency professional from accepting or undertaking an assignment without a valid AFA, but contains an exception for assignments already being undertaken when the authorisation expires.

“The implication of the proviso to Regulation 7A of IBBI (Insolvency Professionals) Regulations, 2016, is very clear; it specifically carves out an exception that under those circumstances where the authorisation of assignment, (AFA) expires during the pendency of the assignments already granted to the Insolvency Professionals, such assignments shall not cease,” the bench observed.

The tribunal further observed that there cannot be an abrupt closure of assignments that have already been entrusted to an insolvency professional merely because he attains the age of 70 years during their pendency.

“In fact, the interpretation, which has been given by the Ld. Tribunal vide its order of 25.03.2026, to the implications of the proviso to Regulation 7A of the Regulations, 2016, is that there cannot be an abrupt closure to the assignments already assigned to an Insolvency Professional i.e., the Bankruptcy Trustee herein, even if he attains 70 years of age and he has to continue with the assignments.”, the bench observed.

Finding no legal or factual error in the orders under challenge, the NCLAT dismissed both appeals.