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TMI Blog2021 (1) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... he Indian Institute of Insolvency Professionals of ICAI (IPA) and an IP registered with the Insolvency and Bankruptcy Board of India (IBBI) with Registration No. IBBI/IPA-001/IP-P00300/2017-2018/10544. Background 1.1 The IBBI had issued on 27th August, 2020, the SCN to Mr. Kishan Gopal Somani for accepting the assignment as the Liquidator in Liquidation process of Advance Surfactants India Limited (CD) after 31st December 2019 without holding a valid Authorisation for Assignment (AFA) from his IPA. The Order of Liquidation was passed by the National Company Law Tribunal (NCLT), Principal Bench on 14th January 2020 due to the failure of the Corporate Insolvency Resolution Process (CIRP) of CD. 1.2 Mr. Somani submitted reply to the SCN, da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly mentioned that provisions of the regulation shall not apply to an assignment which an insolvency professional is undertaking as on 31st December 2019. (ii) in terms of express provisions contained in Section 34 of the Code, the Resolution Professional of the CD shall be appointed as Liquidator, unless replaced and as such in the present case, the application seeking liquidation of CD along with IP's written consent was filed before Hon'ble NCLT before the cut-off date. Hence, it is not a new assignment and the bar under Regulation 7A of IP Regulations would not be applicable in this case. (iii) He was appointed as an IP by Hon'ble NCLT Kolkata Bench in the matter of Phoenix ARC Pvt. Ltd. v. Limtex Agri Udyog Ltd. CP (IB) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is and Findings 4. The DC after taking into consideration the SCN, the reply to SCN, the oral and written submission of Mr. Somani and also the provisions of the Code, rules and the regulations made thereunder finds as follows. 4.1 The DC notes that the Regulation 7A of IP regulations requires every IP to have AFA before undertaking any assignment after 31st December 2019. Regulation 7A reads as follows: "7A. An insolvency professional shall not accept or undertake an assignment after 31st December, 2019 unless he holds a valid authorisation for assignment on the date of such acceptance or commencement of such assignment, as the case may be: Provided that provisions of this regulation shall not apply to an assignment which an insolvency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to- (i) payment of fee to the Agency and the Board; (ii) filings and disclosures to the Agency and the Board; (iii) continuous professional education; and (iv) other requirements, as stipulated under the Code, regulations, circulars, directions or guidelines issued by the Agency and the Board, from time to time." 4.4 The bye-laws of Indian Institute of Insolvency Professionals of ICAI defines in para 4(1)(aa) the expression "authorisation for assignment" as an authorisation to undertake an assignment, issued by an insolvency professional agency to an insolvency professional, who is its professional member, in accordance with its bye-laws regulation. An application for grant of AFA can be made by the IPs to the IPA under para 12A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imes abide by the Code, rules, regulations, and guidelines thereunder and the bye-laws of the insolvency professional agency with which he is enrolled; (h) abide by the Code of Conduct specified in the First Schedule to these Regulations;" 4.7 Section 208(2) of the Code provides that every IP shall take reasonable care and diligence while performing his duties and to perform his functions in such manner and subject to such conditions as may be specified. Further, the Code of Conduct specified in the First Schedule of the IP regulations enumerates a list of code of conduct for insolvency professionals including maintaining of integrity and professional competence for rendering professional service, representation of correct facts and corr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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