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TMI Blog2021 (3) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... dence. Therefore, it becomes imperative for an IP to perform his duties with utmost care and diligence. Section 208(2) of the Code provides that every IP shall abide by the Code of conduct. It is the duty of the IP to ensure that his conduct would not undermine the credibility of the process. Therefore, while granting certificate of registration to an IP they are subjected to follow the Code of Conduct specified in the First Schedule to the IP Regulations to ascertain that the IP is a fit and proper individual. The FIR against Mr. Mohan is yet to culminate into a chargesheet, however, the submission of Mr. Mohan that before issuing of the SCN, statutory requirements of sections 217, 218, 219 and 220 of the Code were not complied with by the IBBI since no independent investigation was conducted and thus, the SCN is illegal, unlawful and void ab initio is untenable. Regulation 11 of the IP Regulations gives power to IBBI to issue SCN based on findings of an inspection, investigation or on material otherwise available on record, if the facts prima facie disclose any contravention of the Code, Rules or the Regulations thereof - The DC also notes that a criminal writ petition has also b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14th January, 2020 whereby the Court remanded Mr. Mohan to judicial custody until 28th January, 2020; and the SCN issued to Mr. Mohan on 15th January, 2020 by his IPA. 1.2 The IBBI on 16th January, 2020 had issued the SCN to Mr. Arun Mohan, based on examination of available documentary evidence in respect of his role as interim resolution professional (IRP)/resolution professional (RP) in the corporate insolvency resolution process (CIRP) of FR Tech Innovations (P.) Ltd. (CD). The SCN alleged contraventions of provisions of section 208(2)(a) of the Insolvency and Bankruptcy Code, 2016 (Code), Regulation 7(2)(a), (b), (f), (h) and (i) of the IBBI (Insolvency Professionals) Regulations, 2016 (IP Regulations) and clauses 1,2,3,5,9,12,14,17,24 and 28 of the Code of Conduct under regulation 7(2) thereof. Mr. Arun Mohan replied to the SCN vide letter dated 6th February 2020 and also submitted additional reply vide letter dated 15th July 2020 and 13th August, 2020. 1.3 The IBBI referred the SCN, response of Mr. Arun Mohan to the SCN, additional reply vide letter dated 15th July 2020 and 13th August 2020 and other material available on record to the Disciplinary Committee (DC) for dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Mr. Mohan being "fit and proper' to continue as IP. 2.7 It appears that Mr. Mohan has contravened multiple provisions of the Code including section 208(2)(a) of the Code, Regulation 7(2)(a), (b), (f), (h) and (i) of IP Regulations and clauses 1,2,3,5,9,12,14,17,24 and 28 of the Code of Conduct specified thereunder. These contraventions are of serious nature and make one liable for being discontinuance as an IP and taking any assignment under the Code. The IBBI, therefore, issued SCN on 16th January, 2020. Submissions by Mr. Arun Mohan 3. Mr. Mohan replied to the SCN vide letter dated 6th February, 2020 and also submitted additional responses vide letter dated 15th July, 2020 and 13th August, 2020 which are summarized as follows: 3.1 It has been submitted that he was confirmed as Resolution Professional (RP) in the said CIRP of CD in the 1st meeting of Committee of Creditors (CoC) held on 28-12-2019. In the same meeting the claim of wife of the complainant, i.e., Mrs. Namrata Bugalia (who filed a claim of ₹ 2,80,000/-) was perused and examined. To obtain additional document in support of the claim, an email was sent to Mrs. Namrata Bugalia on 14-12-2019 followed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... induce Mr. Mohan to give up the contemplated legal/criminal action against complainant's wife. He further submits that the complainant falsely alleged that he visited the office of Mr. Paresh Kumar on 4-1-2020 and Mr. Mohan was also present. In fact, the complainant called Mr. Mohan on 3-1-2020 and pleaded for a meeting on 4-1-2020 to which Mr. Mohan refused. The same can be substantiated from Mr. Mohan's call records. 3.5 Mr. Mohan also submitted that the complainant again called him on 10-1-2020 for a meeting but he again refused which is also corroborated with verification report of CBI dated 10-1-2020. Further, the complainant concealed about receipt of the demand notice dated 7-1-2020 in his complaint dated 10-1-2020 and when he failed to lure the RP till 10-1-2020 to give up the legal actions, he lodged the complaint with CBI on false allegations. 3.6 Further, Mr. Mohan submitted that the CBI arrested him on the basis of a fake and fictitious complaint and CBI themselves admitted in their verification report dated 10-1-2020 that they have failed to verify the allegations against him. In the verification report dated 11-1-2020 also, CBI failed to establish false and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l writ petition has been filed by Mr. Mohan before Hon'ble High Court with a prayer to quash the FIR and to set aside the order dated 14-1-2020 passed by Ld. Special Judge, (PC Act) CBI 13 which has been admitted, however, CBI has failed to file their reply. 3.14 Mr. Mohan appeared, for personal hearing (e-mode), before the DC along with his counsel on 17th August, 2020 wherein his counsel reiterated the submissions made in his written reply. Mr. Mohan submitted that the FIR was falsely lodged and it was nothing but a strategy to not to refund an amount of ₹ 15,20,000/- (together with interest @ 12% p.a.) as per the demand notice served to Mrs. Namrata Bugalia after approval by CoC. He further submitted that during judicial remand, no investigation was conducted as there was no basis for the complaint. He also submitted that Mrs. Bugalia was not an employee of the CD and nor she visited the office of CD at any point of time. Analysis and Findings 4. The DC after taking into consideration the SCN, the reply to SCN, the oral and written submission of Mr. Mohan and also the provisions of the Code, rules and the regulations made thereunder finds as follows: 4.1 Under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and a further verification report on 11-1-2020. The bail application moved before Ld. Special Judge (PC Act) was allowed vide order dated 25-1-2020. 4.5 The DC also notes that the FIR against Mr. Mohan is yet to culminate into a chargesheet, however, the submission of Mr. Mohan that before issuing of the SCN, statutory requirements of sections 217, 218, 219 and 220 of the Code were not complied with by the IBBI since no independent investigation was conducted and thus, the SCN is illegal, unlawful and void ab initio is untenable. Regulation 11 of the IP Regulations gives power to IBBI to issue SCN based on findings of an inspection, investigation or on material otherwise available on record, if the facts prima facie disclose any contravention of the Code, Rules or the Regulations thereof. Regulation 11 of the IP Regulations states as follows: "(11) Disciplinary proceedings. (1) Based on the findings of an inspection or investigation, or on material otherwise available on record, if the Board is of the prima facie opinion that sufficient cause exists to take actions permissible under section 220, it shall issue a show-cause notice to the insolvency professional." 4.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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