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TMI Blog2019 (3) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... the IBBI (Insolvency Professionals) Regulations, 2016 and clauses 1, 2, 3, 5, 9, 10, 11, 12, 14, 22, 25, and 27 of the Code of Conduct specified thereunder. The DC finds that, by her deliberate and collusive conduct, Ms. Ruia has rendered herself a person not a fit and proper person to continue as an IP. In view of the above, 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 IBBI (Insolvency Professionals) Regulations, 2016, hereby cancels registration of Ms. Bhavna Sanjay Ruia, Insolvency Professional [Registration No. IBBI/IPA-002/IP-N00371/2017-2018/11065] and debars her from seeking fresh registration as an insolvency professional or providing any service under the Insolvency and Bankruptcy Code, 2016 for ten years. This Order shall come into force on expiry of 30 days from the date of its issue. - No. IBBI/DC/15/2019 - - - Dated:- 21-2-2019 - Dr. M. S. Sahoo, Chairperson, IBBI And Dr. Mukulita Vijayawargiya, Whole Time Member, IBBI ORDER This order disposes of the show cause notice dated 22nd September, 2018 (SCN) issued to Ms. Bhavna Sanjay Ruia, V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otels and Resorts 65,00,000 9 Steiner India Ltd. 65,00,000 10 Lavasa Corporation Ltd. 65,00,000 11 IL FS Engineering and Construction Company Ltd. 47,50,000 12 Entire Estate Private Ltd. NA 13 D B Realty Ltd. NA 14 Peninsula Land NA 2.3 The Hon ble Adjudicating Authority observed in three matters as under: 2.3.1 While considering the application for initiation of CIRP of Lavasa Corporation Ltd. (one of the 14 listed in Para 2.2), the Hon ble Adjudicating Authority, in its order dated 15th March, 2018, noted that Mr. Ruia has proposed appointment of Ms. Ruia as IRP. It observed: In this regard a clarification is required from the respected IBBI that whether to facilitate the Insolvency Proceeding in the connected Insolvency Petitions a Relative s name can be proposed and such an act do not contravene the Code of Conduct as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIRPs for which applications were filed by a professional, who is her husband. In the process, she compromised her independence, integrity and impartiality; 3.2 Ms. Ruia consented to act as IRPs of 15 CIRPs simultaneously, even though she has absolutely no experience whatsoever and no capacity; 3.3 Ms. Ruia contracted to act as IRPs for exorbitant of fees. She contracted a fee of ₹5.15 crore as IRP for one month and a fee of ₹3 crore as resolution professional (RP) per month, over and above all out of pocket expenses in the CIRP of Gammon India Ltd., which had defaulted a sum of ₹42.74 lakh. She contracted a fee of ₹4.75 crore as professional fee in CIRPs of each of the first five CDs listed in table under Para 2.2 above. Thus, Ms. Ruia and Mr. Ruia engaged in a conspiracy to exploit the ailing CDs, in the pretext of rendering professional services. Further, she entered into contracts to act as RPs of 15 CIRPs with the parties who are not competent to engage her as RP and thereby pre-empted the committee of creditors (CoC) of their legitimate rights to appoint an IP of their choice as RP and fix the fees of the RP. Response to Allegations 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial, but also appear to be impartial. Does a professional appear impartial if she receives professional assignments for about ₹50 crore at one go from a CD which is under the custody of her husband. Neither Mr. Ruia found any other professional suitable for any of the 15 CIRPs nor Ms. Ruia could get a single CIRP in her career from any source other than her husband. Any conduct, whether explicitly prohibited in the law or not, is unfair if it impinges on independence, integrity and impartiality of an IP or inconsistent with the reputation of the profession. 5.2 CIRP is a serious responsibility of an IP. Section 20 of the Code obliges the IRP to make every endeavour to protect and preserve the value of the property of the CD and manage the operations of the CD as a going concern. Section 23 of the Code mandates the RP to conduct the entire CIRP and manage the operations of the CD during the CIRP period. It is inconceivable that an individual (Ms. Ruia) who is a novice in the profession and has not handled a single CIRP till date, would act as IRP / RP in 15 CIRPs simultaneously and exercise the powers of Boards of Directors of 15 CDs. While the Code aims to rescue the aili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rule of law, she would have immediately withdrawn or modified her consent / terms in respect of Gammon India Ltd. and 14 others, when the Hon ble Adjudicating Authority raised concern about her conduct vide its order dated 22nd November, 2017 in the matter of Shri Shrikrishna Rail Engineers Private Limited vs. Madhucon Projects Limited and referred the matter to IBBI for appropriate action. It observed: In view of the above, the Adjudicating Authority is of the considered view that remuneration quoted by the IRP is quite exorbitant and the same needs to be referred to IBBI. Though there are no prescribed set of Rules and Regulations/Guidelines at present with regard to the fee payable to the IRP/RP, the Adjudicating Authority is of the considered view that the fee quoted by the professionals should be reasonable, commensurate with work to be handled. In view of the above we recommend the matter to IBBI for taking appropriate action/remedial measure against the proposed IRP including disciplinary action if any, as deemed fit. 5.3.3 Instead of mending her ways, she continued to indulge in similar conduct even after 22nd November, 2017 for several CIRPs, as if there i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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