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TMI Blog2021 (3) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... the IP Regulations for accepting the assignment of IRP in CIRP of CD after 31st December, 2019 - HELD THAT:- It is clear from the said Regulation that one of the essential conditions for undertaking any assignment by an IP is that he should have a valid AFA which is issued by the IPA with which he is enrolled as a professional member. In other words, without AFA, an IP is not eligible to undertake assignments or conduct various processes thereof. Regulation 7A was inserted in the IP Regulations vide notification dated 23rd July, 2019, much before 31st December, 2019. Adequate time was given to the professionals to obtain AFA from respective IPAs. The bye-laws of Indian Institute of Insolvency Professional of ICAI defines in para 4(1)(aa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Order disposes of the Show-Cause Notice (SCN) No. IBBI/IP/MON/2020/9, dated 27th August, 2020 issued to Mr. Satya Narayana Guddeti, Plot No. 23, First Floor, Durganagar Colony, Punjagutta, West Marredpally - 500082, who is a Professional Member of the Indian Institute of Insolvency Professional of ICAI (IPA) and an Insolvency Professional (IP) registered with the Insolvency and Bankruptcy Board of India (IBBI) with Registration No. IBBI/IPA-001/IP-P00632/2017-2018/11086. Background 1.1 The IBBI had issued the SCN dated 27th August, 2020, to Mr. Satya Narayana Guddeti for accepting the assignment as Interim Resolution Professional (IRP) in corporate insolvency resolution process (CIRP) of Ajanta Offset and Packaging Limited (CD) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e IP Regulations came into force. Accordingly, he was under bona fide belief that AFA was not required as it was a continuing process and provisions of Regulation 7A of the said IP Regulations 2016 was not applicable at the time when consent was given for appointment as liquidator for CD. (ii) The error has occurred inadvertently and unintentionally resulting from oversight/misunderstanding of the newly incorporated provisions. (iii) The application for AFA was made on 7th February, 2020 which was rejected due to non-filing of half yearly return which was duly complied. Analysis and Findings 4. The DC after taking into consideration the SCN, the reply to SCN, the oral and written submission of Mr. Satya Narayana Guddeti and al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 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 to the IPA under para 12A of said bye laws. 4.4 Further, Section 208 of the Code also casts an obligation to abide by the code of conduct and comply with all requirements and terms and conditions specified in the bye-laws of the insolvency professional agency of which he is a member. Section 208(2) provides as follows: 208. Functions and obligations of insolvency professionals.- (2) Every insolvency professional shall abide by the following code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 correcting misapprehension, not to conceal material information and not to act with mala fide or with negligence. 4.7 In the present matter, Mr. Guddeti was appointed as IRP by National Company Law Tribunal, Delhi Bench, Court - IV (AA) vide order dated 4th February 2020 initiating CIRP of CD on application under section 7 of the Code by M/s Amritvani Exim Private Limited claiming to be financial creditor and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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