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2019 (1) TMI 385 - Board - Insolvency and BankruptcyInability on the part of Liquidator to take up the assignment - corporate insolvency resolution process (CIRP) - Interim Resolution Professional (IRP) - Mr. Agarwal filed an application dated 5th March, 2018 requesting the NCLT not to appoint him as liquidator for personal reasons - Held that - The Disciplinary Committee, in exercise of the powers conferred under section 220 (2) of the Code read with sub-regulations (7) and (8) of regulation 11 of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016, hereby imposes on Mr. Agarwal a monetary penalty equal to one hundred percent of the total fee payable to him as IRP and as RP in the CIRP of Upadan Commodities Private Ltd. and directs him to deposit the penalty amount by a crossed demand draft payable in favour of the Insolvency and Bankruptcy Board of India within 30 days of the issue of this order - The Board in turn shall deposit the penalty amount in the Consolidated Fund of India - SCN disposed off.
Issues involved:
1. Alleged contraventions by Mr. Agarwal in his role as an Insolvency Professional (IP) in the corporate insolvency resolution process (CIRP) of Upadan Commodities Private Ltd. Detailed Analysis: 1. Contravention: Delay in convening CoC meeting - Submission: Mr. Agarwal argued that the CoC member requested a delayed meeting, justifying the timeline. - Finding: The Disciplinary Committee (DC) acknowledged the importance of urgency but did not find a specific regulation contravened. Fast-tracking was expected but not a violation. 2. Contravention: Failure to take over CD operations - Submission: Mr. Agarwal informed AA about non-cooperation in a progress report. - Finding: RP has a duty to manage CD operations and seek AA direction if needed. Mr. Agarwal's failure to act on non-cooperation was deemed a clear violation. 3. Contravention: Failure to conduct CIRP activities - Submission: Mr. Agarwal denied allegations and cited difficulties. - Finding: RP's role is vital in conducting CIRP. Lack of effort in task completion was seen as a violation of Code and Regulations. 4. Contravention: Recusal from Liquidator role - Submission: Mr. Agarwal continued duties until discharged by AA. - Finding: Seeking recusal without cogent reasons was noted, but continuing duties mitigated the fault. 5.1. DC's Observations on Mr. Agarwal's Conduct - Findings: DC criticized Mr. Agarwal's laid-back approach, lack of effort, and abandonment of CIRP tasks, leading to contraventions. 5.2. DC's Consideration of Circumstances - Findings: Acknowledged challenges faced by Mr. Agarwal due to late appointment but emphasized the need for satisfactory outcomes. 5.3. DC's Decision and Penalty Imposition - Findings: Despite leniency due to circumstances, a monetary penalty of 100% of total fee payable as IRP and RP was imposed on Mr. Agarwal. 6. Conclusion and Penalty Imposition - Decision: The DC imposed a monetary penalty on Mr. Agarwal, directing him to deposit the amount within 30 days. - Implementation: The penalty amount is to be deposited in favor of the Insolvency and Bankruptcy Board of India, with notifications sent to relevant authorities. This detailed analysis encapsulates the key issues, submissions, findings, and the final decision of the Disciplinary Committee regarding the alleged contraventions by Mr. Agarwal in the CIRP process, culminating in the imposition of a monetary penalty.
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